Gerdau SA (GGBN) Q3 2026 Earnings Report

The call was broadly positive, driven by record-high or multi-year-high margins, strong North American demand, substantial free cash flow, shareholder returns, low leverage, expanded liquidity, and positive credit-rating momentum. The main challenges were continued import and oversupply pressure in Brazil, weak South American performance, seasonal and project-ramp-up headwinds, and risks related to trade agreements and future North American demand. Management nevertheless emphasized ongoing operational improvements, selective investment, and a plan to improve Brazilian profitability.

Gerdau expects an important portion of the Miguel Burnier benefit to be captured throughout 2027, but not the full benefit, with the benefit in 2027 probably very close to “something around BRL 400 million”; the project is the “big lever” and “main driver” for the Brazil segment in 2027. Midlothian and its additions of productive capacity are expected to be “fully noticed throughout 2027,” “considering that we do not have any setbacks.” For 2026, CapEx disbursement is now “closer to BRL 4 billion rather than BRL 4.5 billion or BRL 4.7 billion,” while a “level close to $4.5 billion” was described as “a reasonable number for the coming years”; the company has not updated guidance and sees “an upside risk thinking about free cash flow generation.” In North America, steel products guidance is for “margin stability” in the fourth quarter, and the current level of margins and results “can be maintained.” South America’s results are expected to remain “very close to the results we have in the Peruvian operation,” which “oscillates mid-teens, low teens,” or “something close to 15% on a recurring basis.”