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Brazilian steelmaker Gerdau SA, which owns electric arc furnace (EAF)-fired steel mills in several countries in the Americas, announced its first-quarter 2022 financial results, which show it produced 3.4 million metric tons of steel gross, which is 4% higher than in the last quarter of 2021 and 8% higher than in the first quarter of 2021. However, the company shipped 3 million metric tons in the first quarter of this year, which is 3% higher than in the first quarter of 2021. less than in the fourth quarter of 2021 and 1% less than in Q1 of 2021.

Gerdau’s net sales for the quarter totaled 20,330 million reais, or $3,988 million, 6% lower than the fourth quarter of 2021 and 24% higher than the first quarter of 2021. Its gross profit of 5,181 million reais, or $1,016 million, was 36% higher than the 3,797 million reais, or $744.9 million, it made in the first quarter of 2020. Adjusted earnings before interest, taxes, depreciation and amortization was 5,827 million reais, or $1,143 million, in the first quarter of 2022, compared to 4,317 million reais, or $846.9 million, in the first quarter of 2021.

Gerdau’s capacity utilization rate of 75% in the quarter reflects the seasonally weaker period, particularly in the domestic market of Brazil, according to the company. The volume sold in Gerdau’s main business activities decreased slightly compared to the last quarter of 2021 and was in line with the first quarter of 2021.

The decline in net sales in the first quarter of 2022 compared to the following quarter reflects the reduction in volume sold, lower prices in Brazil and the appreciation of the local currency, which reduced sales in foreign currencies converted into Brazilian real, indicates the society. Compared to the first quarter of 2021, net sales showed robust growth thanks to better prices, Gerdau said.

Cost of goods sold decreased in the first quarter of 2022 compared to the following quarter, reflecting lower shipments, despite the 57% increase in coal costs, the 150% increase in metallurgical coal, the 19 % iron ore and 12% increase in scrap metal.

Gerdau’s gross profit for the quarter was in line with its sequential results and increased year over year. Gross margin improved both sequentially and year-over-year primarily due to the performance of the North American construction industry and results from the company’s Special Steel business division . Year-over-year gross profit showed robust growth, the company said, driven primarily by the North America business division, reflecting the better metals allocation in the United States.

The Company’s Adjusted EBITDA and Adjusted EBITDA margin for the quarter reached all-time highs for a first quarter, with this performance reflecting the current demand and price scenario in the steel industry, in particular in North America, combined with the teams’ ability to seize market opportunities, according to Gerdau.