November 7, 2018 / 11:31 AM / a year ago

UPDATE 1-Despite selling less, Brazil steelmaker Gerdau brings high profits amid higher prices

(Changes headline, recasts throughout with details from earnings release)

By Marcelo Rochabrun

SAO PAULO, Nov 7 (Reuters) - Brazil steelmaker Gerdau SA on Wednesday reported a third-quarter profit of 791 million reais, more than 5 times more than a year earlier, driven by higher steel prices despite selling less metal overall.

The results beat a Refinitiv IBES estimate that said Gerdau would have a net profit of 626 million reais this quarter.

Overall, Gerdau sold 5 percent less steel this quarter than in the same period last year, but managed to bring in 35 percent higher revenue for its metal, due to steel prices that have soared internationally as the United States and China have battled over trade tariffs, including tariffs for steel.

The company said it produced less steel because a furnace in Brazil was halted for planned maintenance.

While trade restrictions also exist against exporting Brazilian steel to the U.S., Gerdau is able to avoid these limits because it operates U.S.-based steel plants.

In fact, its revenues for steel sold in the U.S. were higher than for steel sold in Brazil. Its revenue in the U.S. grew to 5.7 billion reais, a 44 percent rise year-over-year.

$1 = 3.7617 reais Reporting by Marcelo Rochabrun Editing by Chizu Nomiyama

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