Gerdau Ameristeel posts USD 25 million loss for Q3

Tuesday, 10 Nov 2009

Tampa based Gerdau Ameristeel, a subsidiary of Brazilian metals group Gerdau, posted a net loss of USD 25.4 million in Q3 as compared to net income of USD 317 million in 3Q08

Quarterly highlights

Net sales totaled USD 1.1 billion in the quarter, down by 56% from USD 2.5 billion in Q3 of 2008.

EBOTDA in the quarter was USD 163 million as compared to USD 581 million for Q3 of 2008.

The average price per ton fell by 41% or USD 437 compared to Q3 of 2008.

Finished steel shipments were 1.5 million tonnes for the three months ended September 30, a 29% decrease.

The company stopped production at Perth Amboy, New Jersey and Sand Springs, Oklahoma facilities during Q3.

Nine months update

Gerdau Ameristeel incurred net losses of USD 116 million as compared to net income of USD 742 million during the same period in 2008.

EBITDA was USD 276 million as compared to USD 1.5 billion.

Net sales were USD 3.2 billion as compared to USD 7.1 billion

Average selling prices fell 26% or USD 233 per tone

Finished steel shipments dropped 43% to 4 million tonnes in the period from 7 million tones

Mr Mario Longhi CEO of Gerdau Ameristeel said that "We have continued to make progress in a number of areas during the past quarter which has resulted in the third successive quarterly growth in Ebitda”

Mr Longhi added that destocking of inventory by customers seems to have been completed and resulted in a 12% QoQ He said “We expect normal seasonal market softness during the fourth quarter of 2009 and production will be adjusted to meet demand”