The watchword for Gerdau in 2026 is 'cost'. It was with this mantra, coupled with actions to increase competitiveness and diversify revenue streams, that the company ended the first quarter with an adjusted net profit of R$ 1 billion, 51% higher than that recorded in the previous quarter.

During the period, the leading steel producer in Brazil achieved an EBITDA of R$ 3 billion, a 23% increase over the result of the first quarter of 2025. The margin was 17.7%. Gerdau's operations in the United States accounted for 75% of the company's consolidated EBITDA in the quarter.

“We achieved these results by reducing costs. The expansion of our margins in the quarter is the result of hard work, seeking all alternatives to operate more efficiently and with investments to increase our competitiveness,” said Gustavo Werneck, CEO of Gerdau, in response to NeoFeed during the release of the earnings report.

In the quarter, the company's capex reached R$ 1.1 billion, 23% of the total projected for 2026, estimated at R$ 4.7 billion. Of the amount invested in the first three months of the year, R$ 500 million went to maintenance and R$ 600 million specifically to initiatives to increase competitiveness.

On the horizon, there is also an investment package for projects, which should be completed this year, and which should generate, in a scenario of one and a half to two years, approximately R$ 1.5 billion in EBITDA for the company.

In this context, the expansion of the Miguel Burnier mine in Minas Gerais, which received R$ 3.6 billion in investments and has a potential EBITDA of R$ 1.1 billion, is expected to enter the ramp-up phase in the second half of the year.

The scrap metal recycling center, currently under construction in the city of Pindamonhangaba, São Paulo state, will also become operational, representing an investment of R$ 400 million and contributing to the company's cost reduction plan.

“This recycling project will generate significant cost savings because we will have a more competitive raw material for our Pindamonhangaba plant [which produces special steels],” said Rafael Japur, CFO of Gerdau.

The third project is in the United States, which is the expansion of Gerdau's Midlothian unit, located in Texas. In this case, the capital expenditure was R$ 1.2 billion. The completion of the first phase will be between the third and fourth quarters of this year.

“We are concluding a large portfolio of projects, with a large volume of disbursements, and now they will begin to generate results. With this, we will have a double benefit, with more results generated and less investment volume compared to two or three years ago,” said Japur.

Despite the executive's efforts to reduce costs and show growth in the bottom line, the company's net revenue between January and March of this year was 4% lower than the same period last year. The company reached R$ 16.7 billion, compared to R$ 17.3 billion in 2025.

Leverage was 0.74 times in the net debt to EBITDA ratio, a result slightly lower than the fourth quarter (0.76 times) and slightly higher than that recorded in the first quarter of last year (0.69 times).

There and here

The issue is that there are two distinct scenarios in Gerdau's balance sheet. The American market shows growth across all lines, contrary to what is observed in the balance sheet of the Brazilian operation.

In the first quarter, the company recorded a 4.5% increase in sales in the United States compared to the previous quarter, and a 7.5% growth in net revenue, reaching R$ 9.3 billion. Local EBITDA, at R$ 2.2 billion, rose 22.9%.

On the other hand, in Brazil, sales fell 9.5% during the period, while net revenue dropped 12.7%, to R$ 6.27 billion. EBITDA, however, rose 13.3%, to R$ 578 million.

The decline in Brazil is related to a long-standing complaint from Werneck , which is the increasing penetration of imported steel, especially Chinese steel, in the national market. According to the company, imported steel now represents 22.7% of the national market, the highest level in history. In the case of flat steel, the percentage reaches 26.8%.

“The main problem in the country is this unfair penetration of imported steel, which continues to happen. And the outlook ahead is no less complex. That's why we're going to have to keep working hard to continue recovering our margins,” said Werneck.

According to the CEO, the expectation is that the federal government will begin to adopt more effective trade protection measures starting in the second half of the year, such as tariff increases and expansion of anti-dumping initiatives.

“We are making investments, but they need to pay off in the future. And the government needs to do its part. For that, it is essential that these trade defense measures are implemented,” the CEO explained.

And now, another concern arises that could, in a way, put pressure on Gerdau's results, which is the impact of the war between Iran and the United States, which resulted in the explosion of the price of a barrel of oil.

The initial impact is seen in land freight, due to the increase in diesel and natural gas prices, used in the company's plants for heating steel. In the case of coal, the impact should be observed in the second quarter.

“We managed to mitigate some of these costs in the first quarter, precisely by seeking greater competitiveness. But we have been trying to talk to our clients, precisely to absorb some of this, with a new level of commercial negotiation,” said Werneck.

The CEO states that, even with this cost pressure, the expectation is to continue improving profitability results in Brazil.

Also during the quarter, Gerdau made dividend payments totaling R$ 354 million on Gerdau SA shares and R$ 106 million on Metalúrgica Gerdau shares. The company also announced the start of a share buyback program, which is expected to reach R$ 100 million.

"Since we understand that Metalúrgica Gerdau has a certain amount of cash, resulting from credits from other periods, there is still room for share buybacks. And that makes a lot of sense now," says Japur.

Gerdau's shares were trading up 3.5% on the B3 stock exchange this Tuesday, April 28th, around 1:15 PM. Year-to-date, the increase is 9.3%. Gerdau's market capitalization is R$ 42.3 billion.