SAO PAULO, Nov 7 (Reuters) - Brazilian steelmaker Gerdau SA posted net income of 791 million reais ($210 million) in the third quarter, more than double analysts’ estimates of 385 million reais, helped by higher steel prices in the United States and Brazil.
Gerdau posted the highest EBITDA, a gauge of operational profit, in a decade. Earnings before interest, tax, depreciation and amortization in the third quarter were 2 billion reais, 30 percent higher than analysts estimate of 1.6 billion reais, according to IBES data from Refinitiv. EBITDA in the third quarter was 73 percent above the same period a year earlier.
In a conference call with analysts, Chief Executive Gustavo Werneck said Gerdau expects even higher prices in Brazil next year, as the country resumes growth and investment rates pick up.
Werneck said he is optimistic about a government under President-elect Jair Bolsonaro. “We hope Bolsonaro helps the country to be more competitive internationally and pushes for needed reforms,” he added.
Analysts at Itau BBA said in a client note that margins, which rose in the United States, where Gerdau obtains 40 percent of its revenue, and Brazil, were a positive surprise.
In a statement, the company said its asset sale program has ended and now Gerdau wants to focus on its operations in the countries with higher profitability. The company sold 7 billion reais in assets over the last four years.
$1 = 3.7623 reais Writing by Tatiana Bautzer Editing by Susan Thomas