August 9, 2017 / 4:20 PM / a year ago

UPDATE 1-Steelmaker Gerdau CEO expects 2018 Brazil recovery to boost building

(Adds Gerdau CEO comments, 2018 outlook, share performance)

SAO PAULO, Aug 9 (Reuters) - Brazilian steelmaker Gerdau SA is maintaining its capital spending target this year and aims to invest about as much in 2018, when an economic recovery should spur more construction, the company's chief executive said on Wednesday.

Still, Chief Executive Officer Andre Gerdau Johannpeter said the prospects for the Brazilian economy this year remain challenging, after the company reported slipping second-quarter revenue and profit.

"We see positive signals in Brazil. They are small but tend to reflect an economic recovery closer to 2018," the CEO said on an earnings call with analysts.

"That does not affect our investment decisions," he added, reaffirming that capital expenditures this year will be in line with the 1.3 billion reais ($414 million) spent in 2016.

Earlier on Wednesday, Gerdau reported net profit of 76.5 million reais in the second quarter, down 3 percent from a year earlier, according to a securities filing.

Earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, slid 3.8 percent to 1.006 billion reais.

Cost-cutting efforts, including a 27 percent drop in selling, general and administrative expenses, helped to keep earnings relatively stable despite falling revenue.

Net sales dropped 10.6 percent from a year before because of currency effects from foreign subsidiaries and the sale of Spanish units.

$1 = 3.14 reais Reporting by Alexandra Alper and Alberto Alerigi Jr.; editing by Brad Haynes and Grant McCool

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below