EX-99.1 2 a05-2640_1ex99d1.htm EX-99.1

Exhibit 99.1

 

2004 Fourth Quarter Results

 

Gerdau S.A.
Consolidated

 

Data presented in this document is based on Brazilian Corporate Law.

 

Highlights

 

•      Net Profit – 2004 presented a consolidated net profit of R$ 3.2 billion, an increase of 157.9% over that of 2003 when it reached R$ 1.3 billion. The improved export margins, as a result of higher international prices, and the results from the operations abroad contributed significantly to this performance. The Brazilian operations presented a net profit of R$ 2.2 billion, 77.1% greater than in the previous year. Net profit in North America was R$ 896.3 million in 2004, compared to a loss of R$ 61.3 million in 2003. In South America, Brazil excluded, net profit reached R$ 174.2 million, 86.5% greater than in 2003. The consolidated net margin went from 9.4%, in 2003, to 16.5%, in 2004.

 

•      Revenues – Consolidated gross revenues reached R$ 23.4 billion in 2004, an increase of 48.3% over 2003 (R$ 15.8 billion). Of this total, 55.2% (R$ 12.9 billion) were produced by the Brazilian operations, 40.4% (R$ 9.5 billion) by the units in North America and 4.4% (R$ 1.0 billion) by the companies in Chile, Uruguay and Argentina. Operations abroad combined with exports from Brazil represented 60.8% of the consolidated gross revenues in 2004.

 

•      Exports – Shipments from Brazil to clients abroad totaled 2.7 million tons in 2004, 14.4% less than shipments made in 2003. Revenues generated by exports reached US$ 1.1 billion, 39.0% more than in the previous year, as a consequence of increases in international prices.

 

•      EBITDA - EBITDA for the fiscal year (earnings before financial expenses, taxes, depreciation and amortizations) reached R$ 5.6 billion compared to R$ 2.7 billion in 2003, an increase of 106.9% year over year. EBITDA margin was 28.3% in 2004 and 20.1% in 2003.

 

•      Output – The production of slabs, blooms and billets reached 13.4 million metric tons in 2004, 9.0% greater than in 2003. The output of rolled products reached 10.3 million metric tons and presented an increase of 13.6% compared to the tonnage produced in the preceding year.

 

Main Data

 

Fiscal Year
2004

 

Fiscal Year
2003

 

Variation

 

Output (1.000 t)

 

13,448

 

12,343

 

9.0

%

Slabs, blooms and billets

 

10,274

 

9,045

 

13.6

%

Rolled products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales (1,000 t)

 

12,561

 

12,144

 

3.4

%

 

 

 

 

 

 

 

 

Gross revenues (R$ million)

 

23,408

 

15,783

 

48.3

%

Net revenue (R$ million)

 

19,597

 

13,367

 

46.6

%

EBITDA (R$ million)

 

5,553

 

2,684

 

106.9

%

EBTDA (R$ million)

 

5,377

 

2,037

 

164.0

%

Net profit (R$ million)

 

3,235

 

1,254

 

157.9

%

 

 

 

 

 

 

 

 

Net worth (R$ million)

 

7,613

 

4,855

 

56.8

%

Total assets (R$ million)

 

18,664

 

14,247

 

31.0

%

 

 

 

 

 

 

 

 

Gross margin

 

31.9

%

24.6

%

 

 

EBITDA margin

 

28.3

%

20.1

%

 

 

Net margin

 

16.5

%

9.4

%

 

 

 

 

 

 

 

 

 

 

Net profit / Net worth (ROE)(1)

 

42.5

%

25.8

%

 

 

 

 

 

 

 

 

 

 

Net Debt / Net total capitalization

 

36.3

%

51.9

%

 

 

Net debt / EBITDA

 

0.8

x

2.0

x

 

 

 

(1) Fiscal year’s net profit over shareholders’ equity.

 

•      Dividends – Dividends pertaining to the fourth quarter of 2004 will be credited to shareholders of Metalúrgica Gerdau S.A. and Gerdau S.A. on February 22nd, 2005. The amount disbursed will be of R$ 158.4 million (R$ 1.92 per share) and R$ 280.4 million (R$ 0.95 per share), respectively. The payments made by Metalúrgica Gerdau S.A. to shareholders throughout the fiscal year of 2004 totaled R$ 433.9

 


 

 

million (with a dividend yield of 7.8% based on a share price of R$ 67.40 on December 30th, 2004) and R$ 858.8 million by Gerdau S.A. (with a dividend yield of 6.1% based on a share price of R$ 47.50 on December 30th, 2004).

 

•      Acquisition of assets from North Star Steel – On November 1st Gerdau Ameristeel concluded the acquisition of fixed assets and working capital of North Star Steel, in the United States (four long steel producing mills, three wire-rod processing facilities and a mining industry grinding balls production unit) as announced on September 9th. The price paid for these assets was US$ 266.0 million in addition to liabilities of about US$ 12.0 million. The company disbursed an additional US$ 30.0 million as an adjustment of the price of acquisition due to fluctuations in the working capital at the date of the conclusion of the transaction. The four mills have an installed capacity of approximately 2.0 million short tons per year in long rolled steel and the four downstream units can produce about 300 thousand short tons per year of reinforced concrete mesh, wire fences and industrial wires along with grinding balls.

 

•      New downstream units – On December 11th, Gerdau Ameristeel concluded the acquisition of assets from Gate City Steel, Inc. and RJ Rebar, Inc., in the United States. These units are suppliers of fabricated rebars, with and without epoxy coating, to the Mid-West and Southern regions of the U.S.A. These units have a nominal installed capacity of 150 thousand short tons per year.

 

•      Strategic alliance in Colombia –Gerdau announced on December 23rd that it had signed an agreement with the Mayagüez Group and the Latin-American Enterprise Steel Holding, controlling shareholders of Diaco S.A., the largest steel and rebar manufacturer in Colombia, and Siderúrgica del Pacífico S.A. – Sidelpa, the only specialty steel producer in the country. This agreement defines the acquisition in installments of the stakes in Diaco and Sidelpa. Gerdau will initially invest US$ 68.5 million. The Mayagüez Group, which will remain a shareholder of Diaco for a period of up to eight years, has agreed upon a strategic alliance with the Gerdau Group for the development of business in the Colombian steel sector. The operations have an annual installed capacity of 460 thousand metric tons of crude steel and 605 thousand tons of rolled products.

 

•      Capacity expansion at the Ouro Branco mill – Investments at the Ouro Branco mill (MG) will reach approximately US$ 900 million and will increase its crude steel installed capacity from 3.0 million metric tons to 4.5 million metric tons per annum by the end of 2007. This investment will include a new blast furnace, an HPS (Hybrid Pelletized Sinter), a continuous bloom caster and a dephosphorization system among other improvements in its productive process.

 

•      New mill in Araçariguama - São Paulo – Gerdau announced on October 18th the resumption of the construction of the new steel mill in the state of São Paulo. Investments in this location are estimated at R$ 750 million. The investment will have two phases and the mill will have an installed capacity of 1.3 million metric tons of crude steel and 1.2 million metric tons of rebars for the civil construction sector. Investments for the first phase will total R$ 500 million and the installed capacity should be of 900 thousand metric tons of crude steel, and the rolling mill will have 600 thousand metric tons. The melt shop should be up and running in May 2005 and the rolling mill in April 2006.

 

•      Specialty steel mill in Rio de Janeiro –Gerdau, as announced last December, will invest R$ 930 million through 2007 to build a new specialty steel mill in the city of Rio de Janeiro. The new unit will provide steel to the auto industry and should have an installed capacity of 800 thousand metric tons per annum of crude steel and 500 thousand metric tons of rolled products.

 

•      Capacity enhancement in Gerdau Cosigua – Gerdau will invest R$ 480 million through 2007 in the expansion of its existing mill in the state of Rio de Janeiro. Gerdau Cosigua will increase its crude steel installed capacity from 1.2 million metric tons to 1.8 million metric tons and 1.3 million metric tons to 1.6 million metric tons of rolled products per year. With this expansion, the Rio de Janeiro Gerdau mill will improve its sales effort to the metal and mechanic industry, civil construction an agricultural sectors.

 

•      Capacity increase at Gerdau Aços Finos Piratini – US$ 41 million are being invested at the Charqueadas mill in order to increase the installed capacity of rolled products to 500 thousand metric

 

2


 

tons up from 350 thousand tons. This investment will be concluded at the end of the first quarter of 2005.

 

•      Improvements at Gerdau Riograndense and Gerdau Cearense units – At the Riograndense mill, improvements in the melt shop will allow an additional output of 60 thousand metric tons of crude steel per year by 2006. The start up of a new reheating furnace and the elimination of bottlenecks, scheduled for 2006, at the Cearense mill, will enhance the annual output of this site in 50%, from 100 thousand tons to 150 thousand tons.

 

•      Capitalization of Gerdau Ameristeel - Gerdau Ameristeel conducted a public offering of 70 million new ordinary shares at a price of US$ 4.70 per share, in the fourth quarter, and reaching a total of US$ 329.0 million. As negotiated in the subscription agreement with Gerdau Ameristeel, the underwriters and Gerdau S.A. purchased an additional lot (over allotment) of 4.381.000 ordinary shares each for a total of US$ 41.2 million. It is worth mentioning that the Gerdau Ameristeel shares, which were already traded at the Toronto Stock Exchange (Canada), are now also traded at the New York Stock Exchange, in the US under the ticker symbol GNA. After completing this offering Gerdau S.A. now holds a stake of 66.5% of the Company’s capital stock.

 

•      Corporate Restructuring of Gerdau Companies – On December 3rd, the Board of Directors of Gerdau S.A. authorized the implementation of measures to reorganize its companies in order to obtain strategic advantages as well as better efficiencies in management and operations as a result of a specialization and the geographical location of the different Gerdau Group businesses. The objective is to focus on the organization’s main competences, on a focusaction and acquiring critical mass within each area of comptetence. Additionally, this reorganization will include solutions to enhance the future growth of the organization. The first step in this direction was implemented on December 29th with the capitalization of the holding Gerdau Participações S.A. with shares of Gerdau Açominas S.A. and part of the quotas of Gerdau Internacional Empreendimentos Ltda., held by Gerdau S.A., which represent de 91.5% e 22.8% of the capital stock of those companies, respectively. The quotas transferred to Gerdau Participações S.A. are equivalent to those of Gerdau Internacional Empreendimentos Ltda., directly and indirectly, in the capital stock of the following companies: Gerdau Chile Inversiones Ltda., Gerdau Laisa S.A. y Sipar Aceros S.A. The final reorganization model has not yet been concluded. It should be divulged as management’s proposals are approved by the Board of Directors. Additional measures will, therefore, be adopted throughout the year and will be disclosed as soon as they are approved.

 

Availability at the site:

This document and complementary information for the quarter year results are available at www.gerdau.com.br/ing/ri

 

Complementary Information:

Additional data on the performance in the quarter can be obtained with the Investor Relations sector which can be reached by phone at +55 51 3323.2703 or by e-mail at inform@gerdau.com.br

 

Conference Call: February 1st, 2005

In Portuguese, at 11:00 AM (NY time)

In English, at 1:00 PM (NY time)

 

To listen in, dial:

 

In Portuguese:

• From Brazil: 0800 770.4544 or 11 4613.0501

• Other countries: +55 11 4613.4525

 

In English:

• From the US: 1 800 860.2442

• From Brazil: 0800 770.4544 or 11 4613.0502

• Other countries: +1 412 858.4600

 

The conference call will also be available on the internet. To listen in you must access our site at www.gerdau.com.br

 

3


 

4th Quarter 2004 Performance

 

Output and Sales

 

•      Output of slabs, blooms and billets in the last quarter of the year was of 3.5 million metric tons, 9.5% greater than the volume produced in the fourth quarter of 2003. This increase in the quarter’s output is due mainly to the consolidation of the output of the North Star Steel mills for the months of November and December. Output for the full year reached 13.4 million metric tons, an increase of 9.0% compared to the volume of 2003.

 

•      The units based in Brazil produced 7.3 million metric tons in 2004, a volume 4.4% greater than that of 2003. This tonnage represents 54.2% of the consolidated output. The North American output was 14.3% greater and reached 5.7 million metric tons (42.6% of the total). Companies in Chile and Uruguay contributed with an output of 428.2 thousand metric tons (3.2% of the total), and presented an increase of 23.5% year over year.

 

Output
(1,000 metric tons)

 

4th QTR
2004

 

4th QTR
2003

 

Variation

 

Fiscal
Year
2004

 

Fiscal
Year
2003

 

Variation

 

Crude Steel
(slabs, blooms and billets)

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

1,853.4

 

1.818,3

 

1.9

%

7,284.5

 

6,975.9

 

4.4

%

North America

 

1,491.6

 

1.253,6

 

19.0

%

5,735.7

 

5,019.9

 

14.3

%

South America

 

121.6

 

93,6

 

29.9

%

428.2

 

346.8

 

23.5

%

Total

 

3,466.6

 

3.165,5

 

9.5

%

13,448.4

 

12,342.6

 

9.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rolled Products

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

1,026.3

 

1,017.7

 

0.9

%

4,338.6

 

3,890.6

 

11.5

%

North America

 

1,426.6

 

1,241.1

 

14.9

%

5,451.5

 

4,775.7

 

14.2

%

South America

 

130.0

 

107.3

 

21.1

%

484.3

 

378.6

 

27.9

%

Total

 

2,582.9

 

2,366.1

 

9.2

%

10,274.4

 

9,044.9

 

13.6

%

 

•      The quarter saw the output of rolled products reach 2.6 million metric tons, 9.2% greater than the output in the same period in the preceding year. Volume for the full year reached 10.3 million metric tons, an increase of 13.6% compared to 2003.

 

•      Rolled products produced in Brazil reached 4.3 million metric tons for 2004, an increase of 11.5%, a reflex of the greater demand from the civil construction and industrial consumers of steel products. North and South America (excluding Brazil) saw output increase 14.2% and 27.9%, respectively, reaching the marks of 5.5 million metric tons and 484.3 thousand metric tons, which can be explained by the good economic performance of these regions.

 

•      Total consolidated sales for the quarter reached 3.1 million metric tons, a tonnage similar to that of the fourth quarter of 2003. The highlight of the period was the South American operation which presented an increase of 31.9% in the quarter.

 

Sales
(1,000 metric tons)

 

4th QTR
2004

 

4th QTR
2003

 

Variation

 

Fiscal Year
2004

 

Fiscal
Year
2003

 

Variation

 

Brazil

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic markets

 

808.3

 

849.5

 

(4.9

)%

3,881.4

 

3,376.1

 

15.0

%

Exports

 

821.1

 

869.3

 

(5.5

)%

2,748.2

 

3,211.4

 

(14.4

)%

Total

 

1,629.4

 

1,718.8

 

(5.2

)%

6,629.6

 

6,587.5

 

0.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exterior

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

1,334.4

 

1,294.9

 

3.0

%

5,410.9

 

5,140.5

 

5.3

%

South America

 

143.8

 

109.0

 

31.9

%

520.4

 

416.3

 

25.0

%

Total

 

1,478.2

 

1,403.9

 

5.3

%

5,931.3

 

5,556.8

 

6.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Total

 

3,107.6

 

3,122.7

 

(0.5

)%

12,560.9

 

12,144.3

 

3.4

%

 

4


 

•      Sales for the year of 2004 reached 12.6 million metric tons, 3.4% greater than those of 2003. Sales in North America totaled 5.4 million metric tons, 5.3% more than in the previous year. Units in Chile, Uruguay and Argentina shipped a total of 520.4 thousand metric tons, an increase of 25.0%. At Gerdau Açominas, the Company that consolidates the Brazilian operations, domestic shipments were the highlight of 2004, the consequence of a greater consumption by the civil construction sector and a strong growth in the demand from the industrial sector. With shipments totaling 3.9 million metric tons and representing 58.5% of Company sales, this volume was 15.0% greater than that of 2003. The solid demand in the domestic market combined with the preferential servicing of Brazilian clients more than compensated the decrease in tonnage exported. These were reduced by 14.4% compared to volumes exported in the previous year. Shipments abroad contributed with 41.5% of sales in Brazil and generated revenues of US$ 1.1 billion in the fiscal year.

 

•      Sales from the overseas operations combined with exports from Brazil represented 69.1% of the consolidated volume in 2004, compared to 72.2% in 2003.

 

Results

 

•      The last three months of the year saw net revenues reach R$ 4.9 billion, 39.2% greater than those of the same period in the previous year. This reflects the performance of the operations abroad with better prices in the international markets and the recovery of domestic demand in addition to the consolidation of the new units acquired in 2004.

 

•      The year of 2004 saw an increase in its net revenues for the same reasons mentioned above hitting the mark of 46.6%, going from R$ 13.4 billion, in 2003, to R$ 19.6 billion, in 2004. The Brazilian operations contributed with R$ 10.0 billion to net revenues, 36.5% greater than those of the previous year. At the same time, the North American operations generated net revenues of R$ 8.9 billion (+59.0%) and the units in South America R$ 763.9 million (+55.9%).

 

•      Companies abroad and exports from Brazil combined contributed with 66.1% to the consolidated net revenue for the fourth quarter and 66.2% for the year.

 

Net Revenue
(R$ million)

 

4th QTR
2004

 

4th QTR
2003

 

Variation

 

Fiscal Year
2004

 

Fiscal
Year 2003

 

Variation

 

Brazil

 

2,655.5

 

1,888.2

 

40.6

%

9,975.8

 

7,307.0

 

36.5

%

North America

 

2,015.6

 

1,473.6

 

36.8

%

8,857.6

 

5,569.9

 

59.0

%

South America

 

223.3

 

154.3

 

44.7

%

763.9

 

490.1

 

55.9

%

Total

 

4,894.4

 

3,516.1

 

39.2

%

19,597.3

 

13,367.0

 

46.6

%

 

•      Gross margin for the quarter was 30.3% compared to 24.7% for the same period in 2003. The year of 2004 had a gross margin of 31.9%, an increase of 7.3 percentage points compared to 2003 when it reached 24.6%. Factors that contributed to this outcome both in the quarter and the year were the recovery of operating margins in Brazil due to adjustments in prices as a result of increases in the cost of certain raw materials, and the increase in international prices which benefited exports and the North American operations. Gross profit reached R$ 6.2 billion in 2004 compared to R$ 3.3 billion in 2003, a growth of 89.8%.

 

•      Operating expenses (SG&A) increased 6.0% in the fourth quarter when compared to that of the same months of 2003 compared to a growth of 39.2% in net revenues. This caused the ratio expenses/revenues to fall from 10.4% to 7.9%. This reduction occurred mainly due to the decrease in exported tonnage (less expenses with port services) and to lower expenses at Gerdau Ameristeel. For the year of 2004, the consolidated operating expenses reached R$ 1.5 billion and represent 7.4% of net revenue, compared to 9.1% in 2003.

 

5


 

EBITDA
(R$ million)

 

4th QTR
2004

 

4th QTR
2003

 

Variation

 

Fiscal Year
2004

 

Fiscal
Year 2003

 

Variation

 

Brazil

 

960.9

 

547.8

 

75.4

%

3,704.5

 

2,297.3

 

61.3

%

North America

 

271.5

 

66.0

 

311.4

%

1,597.2

 

234.7

 

580.5

%

South America

 

56.6

 

47.0

 

20.4

%

251.0

 

151.5

 

65.7

%

Total

 

1,289.0

 

660.8

 

95.1

%

5,552.7

 

2,683.5

 

106.9

%

 

•      The greater net revenue combined with the reduction in operating expenses and cost of sales in the fourth quarter of 2004 when compared to those of 2003 resulted in a growth of 95.1% of EBITDA (earnings before financial expenses, taxes, depreciation and amortizations), which reached R$ 1.3 billion. Consequently, margin was bigger settling at 26.3% compared to 18.8% in the fourth quarter of 2003. EBITDA for the full year reached R$ 5.5 billion, 106.9% greater than that of 2003 and the margin increased from 20.1% to 28.3%.

 

EBTDA
(R$ million)

 

4th QTR
2004

 

4th QTR
2003

 

Variation

 

Fiscal
Year
2004

 

Fiscal
Year 2003

 

Variation

 

Gross profit

 

1,483.7

 

868.5

 

70.8

%

6,245.0

 

3,290.2

 

89.8

%

Cost of sales

 

(127.4

)

(125.8

)

1.3

%

(455.2

)

(448.1

)

1.6

%

General Expenses/administrative

 

(258.5

)

(238.4

)

8.4

%

(1,003.8

)

(763.4

)

31.5

%

Depreciation and amortization

 

191.2

 

156.5

 

22.2

%

766.7

 

604.8

 

26.8

%

EBITDA

 

1,289.0

 

660.8

 

95.1

%

5,552.7

 

2,683.5

 

106.9

%

Net financial expenses (excluding monetary and FX variations)

 

(55.7

)

(118.6

)

(53.0

)%

(280.8

)

(532.0

)

(47.2

)%

FX and monetary variations

 

138.1

 

(37.8

)

—

 

104.7

 

(114.5

)

—

 

EBTDA

 

1,371.4

 

504.4

 

171.8

%

5,376.6

 

2,037.0

 

163.9

%

 

•      Net financial expenses net of monetary and FX variations in the fourth quarter totaled R$ 55.7 million compared to R$ 118.6 million in the same period in the previous year. This reduction in expenses results in part from the increase in financial investments of cash generated in the period. If taken into account the FX variations (R$ 136.5 million) and monetary (R$ 1.6 million), both positive, Gerdau had net financial revenues in its quarterly consolidated balance (expenses minus financial revenues) in the amount of R$ 82.4 million. In 2004, net financial expenses netted R$ 176.1 million, in which R$ 14.5 million of monetary variations and R$ 119.2 million in FX variations were included.

 

•      Equity pick up was negative in R$ 60.2 million in the fourth quarter, and R$ 343.1 million in the full year. This was the result of the FX variation over investments abroad along with the fiscal incentive reserves and goodwill amortizations in the periods mentioned.

 

•      R$ 16.8 million, net of taxes, accounted for in the fourth quarter on the Other Operating Income line refer to the final settlement in which Gerdau S.A. won a suite against the improper collection of a tax (PIS) based on executive laws 2.445/88 and 2.449/88.

 

•      Net profit for the last quarter of the year reached R$ 749.1 million, 62.9% greater than that of the fourth quarter of 2003. The net profit for the full year reached R$ 3.2 billion, presenting an increase of 157.9% over last year’s and net margin was 16.5%.

 

Net Profit
(R$ million)

 

4th QTR
2004

 

4th QTR
2003

 

Variation

 

Fiscal
Year
2004

 

Fiscal
Year 2003

 

Variation

 

Brazil

 

589.4

 

431.4

 

36.6

%

2,164.4

 

1,222.4

 

77.1

%

North America

 

120.9

 

(4.3

)

—

 

896.3

 

(61.3

)

—

 

South America

 

38.8

 

32.8

 

18.3

%

174.2

 

93.4

 

86.5

%

Total

 

749.1

 

459.9

 

62.9

%

3,234.9

 

1,254.5

 

157.9

%

 

•      The Inventory line saw an increase of 28.8%, when comparing the September and the December positions, as a result of the increase in steel output and the consolidation of the North Star operations in

 

6


 

the period. At the same time, sales suffered a reduction, especially in the Brazilian domestic market. This effect also impacted the Trade Account Payable line in which an 18.9% increase was recorded as a consequence of higher inventories of raw materials.

 

Investments

 

•      Investments in the last three months of 2004 totaled US$ 501.2 million, mostly destined to the acquisition of the North Star assets and the construction of the new mill in the state of São Paulo.  Companies in Brazil in the quarter invested US$ 127.2 million, while the mills in North America invested US$ 370.0 million and the South American units the balance of US$ 4.0 million.

 

•      Investments in the year, acquisitions included, totaled US$ 771.7 million, of which US$ 325.6 million (42.2% of total) were invested in Brazil-based units, US$ 435.8 million (56.5% of total) in industrial sites in North America, and US$ 10.3 million (1.3% of total) in the South American mills.

 

Investments
(US$ million)

 

Fiscal Year 2004

 

Fiscal Year
2003

 

Brazil

 

325.6

 

228.5

 

Gerdau Açominas

 

317.3

 

221.3

 

Other

 

8.3

 

7.2

 

Abroad

 

446.1

 

66.2

 

North America

 

435.8

 

59.4

 

South America

 

10.3

 

6.8

 

Total

 

771.7

 

294.7

 

 

Indebtedness

 

•      Net debt was R$ 4.3 billion on December 31st, 2004, 17.4% lower than that of year-end 2003.

 

•      Gross debt was 30.9% short term (R$ 2.0 billion) and 69.1% long term (R$ 4.4 billion). Approximately 22.2% is in local currency (BNDES and debentures), 37.0% is pegged to the U.S. dollar and 40.8% is debt by companies abroad.

 

•      Cash and Cash & Equivalents at the end of the year registered R$ 2.1 billion, of which 68.2%, or R$ 1.4 billion, were indexed to the U.S. dollar.

 

Indebtedness
(R$ million)

 

12.31.2004

 

12.31.2003

 

Short term

 

 

 

 

 

Local currency

 

201.8

 

280.9

 

Foreign currency

 

704.8

 

1,342.7

 

Companies abroad

 

1,064.8

 

793.8

 

Total

 

1,971.4

 

2,417.4

 

Long Term

 

 

 

 

 

Local currency

 

1,211.3

 

717.2

 

Foreign currency

 

1,653.1

 

1,030.7

 

Companies abroad

 

1,541.0

 

2,097.2

 

Total

 

4,405.4

 

3,845.1

 

Gross Debt

 

6,376.8

 

6,262.5

 

Cash & Cash and Equivalents

 

2,042.0

 

1,017.0

 

Net Debt

 

4,334.8

 

5,245.5

 

 

•      At the end of December, the main debt indicators standing was:

 

7


 

Ratios

 

12.31.2004

 

12.31.2003

 

Net debt / Total net capitalization

 

36.3

%

51.9

%

EBITDA / Net financial expenses (excluding monetary and FX variations)

 

19.8x

 

5.0x

 

Gross debt / EBITDA

 

1.1x

 

2.3x

 

Net debt / EBITDA

 

0.8x

 

2.0x

 

 

APIMEC Meeting

 

•      With the aim of further enhancing its relationship with the capital markets players, Gerdau promoted 6 APIMEC meetings. The last one was a national APIMEC held on November 24th, in São Paulo. The event counted over 250 participants which had the opportunity to attend the Gerdau companies presentation of for the first nine months of 2004, followed by a Q&A session with Company directors. Additionally, for those unable to come to the meeting a web casting service was available to all.

 

8


 

Company Information (Non-consolidated Data)

 

Metalúrgica Gerdau S.A.

 

•      Shareholders will be credited a total of R$ 158.4 million (R$ 1.92 per share) on February 22nd, 2005, as dividends for the fourth quarter of 2004, based on the positions held on February 11th, 2005. The accumulated for the year in the way of payments to shareholders totaled R$ 433.9 million (R$ 5.26 per outstanding share), representing a dividend yield of 7.8%, if calculated based on the stock price of R$ 67.40 as on December 30th, 2004.

 

•      Gersul Empreendimentos Imobiliários Ltda., one of the controlling companies of Metalúrgica Gerdau, offered, on December 9th, 2.8 million ordinary shares it owned in an auction at the São Paulo Stock Exchange. This stake represents 10.1% of ordinary shares and 3.4% of the total capital stock of Metalúrgica Gerdau. The objective of this public offering was to provide better liquidity to ordinary shares and the consequent appreciation of that stock. The auction generated resources of R$ 75.1 million to the offering shareholder as a result of the selling of 1.4 million shares.

 

•      Metalúrgica Gerdau S.A. (GOAU) shares moved R$ 2.1 billion at the São Paulo Stock Exchange (Bovespa) throughout 2004, 260.4% more than in 2003. 63,200 trades were made and shares traded totaled 36.5 million. These surpassed by 195.1% and 155.9%, respectively the numbers for the previous year. Preferred shares appreciated 122.7% for the full year, and the daily trading average increased from R$ 2.2 million, in 2003, to R$ 7.2 million, in 2004.

 

•      Stock quote of preferred shares during 2004 at the São Paulo Stock Exchange were as follows:

 

 

•      Metalúrgica Gerdau S.A. reached a net profit of R$ 404.5 million (R$ 4.90 per share) in the fourth quarter, 85.4% greater than that of the same quarter in 2003. This profit comes from, essentially, the equity pickup of investments in subsidiaries and affiliated companies and the capital gains resulting from the sell-off of Gerdau S.A. shares in a public offering on December 9th. Net profit for the full year was R$ 1.4 billion (R$ 17.42 per share) presenting an increase of 149.8% over that of 2003.

 

•      Shareholders Equity on December 31st, 2004, was R$ 3.0 billion, representing R$ 35.90 per share.

 

9


 

Gerdau S.A.

 

•      Gerdau S.A. will pay, on February 22nd, 2005, dividends relative to the fourth quarter of 2004 in a total of R$ 280.4 million. These dividends will be paid based on the number of shares held on February 11th, 2005, and correspond to R$ 0.95 per share. Compensation to shareholders for the full year reached R$ 858.8 million (R$ 2.91 per share outstanding), representing a dividend yield of 6.1%, if calculated based on the stock quote of R$ 47.50 on December 30th, 2004.

 

•      Metalúrgica Gerdau S.A. and Santa Felicidade Comércio, Importação e Exportação de Produtos Siderúrgicos Ltda., controlling shareholders of da Gerdau S.A., offered in an auction at the São Paulo Stock Exchange, held on December 9th, 4.0 million and 6.3 million ordinary shares, respectively. This stake in shares (10.3 million) represents 10.0% of ordinary shares and 3.5% of Gerdau S.A.’s capital stock. The objective of this public offering was to provide better liquidity to ordinary shares and the consequent appreciation of that stock. The auction generated resources of R$ 412.1 million to the offering shareholder as a result of the selling of all shares offered.

 

•      Gerdau S.A. (GGBR) shares moved R$ 7.2 billion São Paulo Stock Exchange (Bovespa), in 2004, presenting a growth of 185.2% compared to 2003. There were 223.971 trades which surpassed by 116.2% the number of the previous year. The number of shares traded also presented an important increase in the period: 159.4 million shares, 129.0% more than in 2003. In 2004, preferred shares appreciated 66.2% and the average daily trade reached R$ 25.9 million compared to R$ 9.8 million in 2003.

 

•      ADRs, representative of Gerdau S.A. preferred shares (GGB) and traded at the New York Stock Exchange (NYSE), moved 80.0 million shares in 2004, 240.4% more than in 2003. The amounts involved in these transactions totaled US$ 1.3 billion in the period, equivalent to a daily average of US$ 5.1 million.

 

•      The evolution of stock quotes in 2004 of preferred shares at the São Paulo Stock Exchange and at the New York Stock Exchange was as follows:

 

 

•      Throughout the year of 2004, the Gerdau S.A. (XGGB) preferred shares have had a daily presence at the Madrid Stock Exchange (Latibex). There were 479.1 thousand shares traded which moved resources of about € 6.2 million.

 

•      Gerdau S.A. had a net profit of R$ 635.8 million in the quarter, (R$ 2.15 per share) compared to R$ 459.4 million in the pro forma financials for October through December 2003. This profit comes from essentially equity pickup from investments in subsidiaries and affiliated companies. The year-end accumulated net profit was R$ 2.8 billion (R$ 9.59 per share), 148.3% greater than the pro forma for 2003.

 

•      Shareholders Equity on December 31st, 2004, was R$ 6.1 billion, equivalent to R$ 20.58 per share.

 

10


 

Gerdau Açominas S.A.

 

•      Gross revenues for the fourth quarter at Gerdau Açominas reached R$ 3.4 billion, 45.9% greater than in the pro forma financials of the last quarter of 2003. For the full year gross revenues reached R$ 13.0 billion, presenting an increase of 43.2% compared to the pro forma of 2003. Net revenues for the fourth quarter were R$ 2.7 billion and, for the full year, accumulated R$ 10.0 billion. This evolution both in the quarter and the full year is the result of higher prices in the domestic and the international markets and to the recovery of domestic demand.

 

•      Gross margin was 40.3% in the fourth quarter compared to 36.3% in the same period of 2003. For the full year of 2004, gross margin reached 41.9% compared to 37.9% in the same period of 2003, if compared to the pro forma financials. Contributors to this performance were the recovery of operating margins in Brazil due to the readjustment in prices due mostly to the increase of certain raw materials and to the increase in international prices which benefited exports substantially.

 

•      EBITDA (earnings before financial expenses, taxes, depreciation and amortizations) reached R$ 935.0 million in the fourth quarter compared to R$ 530.2 million in October to December of 2003. EBITDA margin reached 34.8% compared to 28.2%. The accumulated yearly EBITDA was R$ 3.7 billion, with a margin of 36.4% compared to R$ 2.3 billion and a 31.2% margin in the pro forma 2003 financials.

 

•      The Company’s net profit reached R$ 624.8 million in the last quarter of the year which was 67.4% greater than that of the fourth quarter of 2003. For the full year, net profit reached R$ 2.5 billion (R$ 15.65 per share), compared to R$ 1.4 billion in 2003.

 

•      Gerdau Açominas will pay on February 22nd, 2005, dividends of R$ 306.2 million relative to the fourth quarter of 2004. The dividend will be paid based on the number of shares held on February 11th and are equivalent to R$ 1.93 per share. For the full year, the payment to shareholders totaled R$ 938.7 million (R$ 5.9165 per share outstanding).

 

•      Shareholders’ equity on December 31st was R$ 4.8 billion, equivalent to shareholders’ equity per share of R$ 30.04.

 

Gerdau Ameristeel Corporation

 

•      In 2004, shares of Gerdau Ameristeel (GNA.TO) moved Cdn$ 500.3 million at the Toronto Stock Exchange, with 83.8 million shares traded. The company stock appreciated 72.3% at that Exchange.

 

•      The evolution of stock quotes at the Toronto Stock Exchange was as follows:

 

 

11


 

•      On October 18th, Gerdau Ameristeel shares started trading at the New York Stock Exchange (NYSE). From that date through December 31st, 18.8 million shares (GNA) were traded and the financial volume totaled US$ 107.5 million.

 

•      Net revenues adjusted to Brazilian GAAP reached R$ 2.0 billion in the fourth quarter of 2004, 36.8% greater than that of the same period in 2003. For the full year net revenues totaled R$ 8.9 billion, presenting an increase of 59.0%.

 

•      EBITDA (earnings before financial expenses, taxes, depreciation and amortizations), also adjusted to Brazilian GAAP, reached R$ 271.5 million in the fourth quarter this year, 311.4% greater than the same quarter in 2003. EBITDA margin surpassed 4.5% going to 13.5%. The accumulated EBITDA for the year reached R$ 1.6 billion, with a margin of 18.0% (4.2% in 2003).

 

•      Net profit reached R$ 120.9 million in the fourth quarter of 2004, and the accumulated profit for the year reached R$ 896.3 million (compared to a loss of R$ 61.3 million in 2003).

 

•      The Company announced, today, that its Board of Directors has approved the beginning of dividend payments to its shareholders on a quarterly basis. Dividends will be paid on March 4th, 2005 at US$ 0.02 per share held on February 16th, 2005.

 

MANAGEMENT

 

12


 

METALÚRGICA GERDAU S.A. - Consolidated

BALANCE SHEET (Unaudited)

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL ASSETS

 

18,791,956

 

14,378,841

 

Current assets

 

9,653,492

 

5,432,827

 

Cash and cash & equivalents

 

337,767

 

125,596

 

Trade accounts receivable

 

2,564,192

 

1,561,083

 

Taxes recoverable

 

251,858

 

137,810

 

Temporary cash investments

 

1,666,178

 

890,130

 

Inventories

 

4,236,642

 

2,336,598

 

Deferred income tax & other

 

596,855

 

381,610

 

Long-term receivables

 

1,063,086

 

1,081,485

 

Accounts receivable

 

10,584

 

10,584

 

A/R with related parties

 

1,231

 

30,509

 

Deferred income tax & other

 

1,051,271

 

1,040,392

 

Permanent assets

 

8,075,378

 

7,864,529

 

Investments

 

112,547

 

463,224

 

Fixed assets

 

7,928,973

 

7,380,838

 

Deferred

 

33,858

 

20,467

 

 

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL LIABILITIES

 

18,791,956

 

14,378,841

 

Current Liabilities

 

5,345,258

 

4,424,043

 

Loans and financing

 

2,027,865

 

2,461,299

 

Debentures

 

2,986

 

3,651

 

Trade accounts payable

 

1,921,424

 

1,191,065

 

Taxes payable

 

391,185

 

178,442

 

Dividends payable

 

338,972

 

165,722

 

Deferred income tax & other

 

662,826

 

423,864

 

Long-term liabilities

 

5,591,103

 

5,117,878

 

Loans and Financing

 

3,490,374

 

3,396,085

 

Debentures

 

573,504

 

423,956

 

Deferred income tax & other

 

1,527,225

 

1,297,837

 

Minority Shareholders

 

4,894,561

 

2,864,824

 

Shareholders’ equity

 

2,961,034

 

1,972,096

 

Capital stock

 

1,664,000

 

1,280,000

 

Capital reserves

 

10,842

 

10,659

 

Profit reserves

 

1,285,632

 

680,877

 

Retained earning

 

560

 

560

 

 

13


 

METALÚRGICA GERDAU S.A. - Consolidated

FINANCIAL STATEMENT (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

4Q2003

 

2004

 

2003

 

GROSS SALES REVENUE

 

5,843,157

 

4,169,144

 

23,407,573

 

15,782,967

 

Deductions of gross revenues

 

(948,743

)

(653,069

)

(3,810,311

)

(2,416,006

)

Net sales revenues

 

4,894,414

 

3,516,075

 

19,597,262

 

13,366,961

 

Cost of sales

 

(3,410,686

)

(2,647,582

)

(13,352,240

)

(10,076,740

)

Gross profit

 

1,483,728

 

868,493

 

6,245,022

 

3,290,221

 

Operating result

 

(320,799

)

(523,474

)

(1,808,092

)

(2,138,040

)

Selling expenses

 

(127,439

)

(125,709

)

(455,175

)

(448,131

)

General and administrative expenses

 

(267,150

)

(252,025

)

(1,050,953

)

(804,501

)

Financial income

 

50,906

 

6,323

 

249,261

 

86,754

 

Financial expenses

 

39,226

 

(156,589

)

(397,642

)

(708,130

)

Other operating income (expenses), net

 

43,858

 

16,489

 

191,045

 

17,208

 

Equity pick-up

 

(60,200

)

(11,963

)

(344,628

)

(281,240

)

Operating profit

 

1,162,929

 

345,019

 

4,436,930

 

1,152,181

 

Non-operating income (expenses), net

 

166,171

 

6,190

 

144,102

 

(6,162

)

Profit before taxes/participation

 

1,329,100

 

351,209

 

4,581,032

 

1,146,019

 

Provision for income tax

 

(311,467

)

(118,892

)

(957,000

)

(314,614

)

Deferred income tax

 

(129,836

)

239,799

 

(238,405

)

454,470

 

Statutory participation

 

(18,665

)

(13,409

)

(44,530

)

(29,001

)

Net Profit for the period

 

869,132

 

458,707

 

3,341,097

 

1,256,874

 

 

 

 

 

 

 

 

 

 

 

Controlling Shareholders

 

404,543

 

218,142

 

1,437,075

 

575,179

 

Minority Shareholders

 

464,589

 

240,565

 

1,904,022

 

681,695

 

 

METALÚRGICA GERDAU S.A. - Consolidated

CASH FLOW (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

4Q2003

 

2004

 

2003

 

NET INCOME

 

869,132

 

458,707

 

3,341,097

 

1,256,874

 

Equity pick up

 

60,200

 

11,964

 

344,628

 

281,240

 

Provision for credit risk

 

(1,084

)

4,365

 

7,647

 

20,618

 

Gain/Loss in fixed asset disposal

 

2,840

 

(5,148

)

9,058

 

10,056

 

Gain/Loss in disposal of investment

 

(168,466

)

(1,753

)

(164,058

)

(1,556

)

Monetary and exchange variation

 

(137,534

)

43,921

 

(94,087

)

136,349

 

Depreciation and amortization

 

191,186

 

156,491

 

766,819

 

605,045

 

Income tax

 

(16,936

)

(178,985

)

505,551

 

(441,456

)

Interest paid

 

85,063

 

156,720

 

412,152

 

593,308

 

Contingencies/legal deposits

 

(8,913

)

(9,579

)

4,351

 

562

 

Changes in trade account receivable

 

263,383

 

137,375

 

(720,363

)

(167,134

)

Changes in inventories

 

(453,209

)

(64,053

)

(1,402,408

)

(207,267

)

Changes in trade accounts payable

 

(26,323

)

65,151

 

477,292

 

187,227

 

Other accounts in operating activities

 

(199,702

)

32,299

 

(100,288

)

74,557

 

Net cash provided by operating activities

 

459,637

 

807,475

 

3,387,391

 

2,348,423

 

Fixed assets acquisitions/ disposals

 

(470,634

)

(247,126

)

(1,173,491

)

(873,039

)

Deferred charges

 

(7,602

)

(1,987

)

(18,006

)

(7,246

)

Investments acquisitions/ disposals

 

373,986

 

(53,579

)

362,905

 

(67,005

)

Assets acquisition

 

(924,457

)

—

 

(924,457

)

—

 

Cash (applied to) investing activities

 

(1,028,707

)

(302,692

)

(1,753,049

)

(947,290

)

Fixed assets suppliers

 

146,149

 

10,108

 

144,573

 

2,196

 

Working capital financing

 

76,637

 

(406,679

)

(133,006

)

(334,804

)

Debentures

 

30,559

 

(356,106

)

85,305

 

(347,456

)

Proceeds from fixed assets financing

 

491,638

 

180,941

 

762,766

 

454,989

 

Payments of fixed assets financing

 

(128,501

)

(189,853

)

(677,357

)

(541,308

)

Interest paid for financing

 

(49,471

)

(104,101

)

(379,801

)

(414,409

)

Inter companies loans

 

4,673

 

544

 

35,944

 

(16,937

)

Capital increase/Treasury stock

 

491,817

 

(24,151

)

451,704

 

(24,151

)

Dividend/ interest & statutory particip, payment

 

(303,880

)

(82,398

)

(853,710

)

(423,399

)

Cash provided by (applied to) financing activities

 

759,621

 

(971,695

)

(563,582

)

(1,645,279

)

Net change in cash

 

190,551

 

(466,912

)

1,070,760

 

(244,146

)

Cash balance

 

 

 

 

 

 

 

 

 

At the beginning of the period

 

1,900,675

 

1,485,017

 

1,015,726

 

1,420,236

 

Effect of exchange rate changes on cash

 

(87,281

)

(2,962

)

(82,541

)

(173,736

)

Opening balance of incorporated companies for the year

 

—

 

583

 

—

 

13,372

 

At the end of the period

 

2,003,945

 

1,015,726

 

2,003,945

 

1,015,726

 

Cash composition

 

 

 

 

 

 

 

 

 

Temporary cash investments

 

1,666,178

 

890,130

 

1,666,178

 

890,130

 

Cash

 

337,767

 

125,596

 

337,767

 

125,596

 

 

14


 

METALÚRGICA GERDAU S.A. - Non consolidated

BALANCE SHEET (Unaudited)

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL ASSETS

 

3,263,861

 

2,156,842

 

Current assets

 

231,356

 

107,480

 

Cash and cash & equivalents

 

98

 

23

 

Temporary cash investments

 

95,702

 

25,163

 

Dividends

 

120,508

 

62,086

 

Taxes recoverable

 

11,247

 

16,113

 

Other

 

3,801

 

4,095

 

Long-term receivables

 

12,891

 

18,145

 

Accounts receivable

 

3,189

 

372

 

A/R with related parties

 

—

 

3,390

 

Deferred income tax & other

 

9,702

 

14,383

 

Permanent assets

 

3,019,614

 

2,031,217

 

Investments

 

3,018,021

 

2,029,479

 

Fixed assets

 

1,593

 

1,738

 

 

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL LIABILITIES

 

3,263,861

 

2,156,842

 

Current Liabilities

 

175,798

 

94,090

 

Debentures

 

—

 

624

 

Trade accounts payable

 

63

 

4

 

Taxes payable

 

2,247

 

3,537

 

Dividends payable

 

158,374

 

73,524

 

A/P with related parties

 

266

 

—

 

Other accounts payable

 

14,848

 

16,401

 

Long-term liabilities

 

127,029

 

90,656

 

Deferred income tax & other

 

127,029

 

90,656

 

Shareholders’ equity

 

2,961,034

 

1,972,096

 

Capital stock

 

1,664,000

 

1,280,000

 

Capital reserves

 

10,842

 

10,659

 

Profit reserves

 

1,285,632

 

680,877

 

Retained earning

 

560

 

560

 

 

15


 

METALÚRGICA GERDAU S.A. - Non consolidated

FINANCIAL STATEMENT (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

4Q2003

 

2004

 

2003

 

GROSS SALES REVENUE

 

—

 

—

 

—

 

—

 

Deductions of gross revenues

 

—

 

—

 

—

 

—

 

Net sales revenues

 

—

 

—

 

—

 

—

 

Cost of sales

 

—

 

—

 

—

 

—

 

Gross profit

 

—

 

—

 

—

 

—

 

Operating result

 

286,871

 

226,543

 

1,314,266

 

586,659

 

General and administrative expenses

 

(4,176

)

(10,146

)

(32,059

)

(29,993

)

Fianancial income

 

844

 

3,257

 

10,239

 

11,900

 

Financial expenses

 

(1,294

)

(1,807

)

(6,852

)

(5,616

)

Other operating income (expenses), net

 

32

 

115

 

96

 

367

 

Equity pick-up

 

291,465

 

235,124

 

1,342,842

 

610,001

 

Operating profit

 

286,871

 

226,543

 

1,314,266

 

586,659

 

Non-operating income (expenses), net

 

170,990

 

42

 

170,953

 

1,445

 

Profit before taxes/participation

 

457,861

 

226,585

 

1,485,219

 

588,104

 

Provision for income tax

 

(2,624

)

(3,305

)

(2,624

)

(3,305

)

Deferred income tax

 

(49,749

)

(4,326

)

(42,352

)

(6,663

)

Statutory participation

 

(945

)

(812

)

(3,168

)

(2,957

)

Net Profit for the period

 

404,543

 

218,142

 

1,437,075

 

575,179

 

 

 

 

 

 

 

 

 

 

 

Profit per share - R$

 

4.90

 

5.26

 

17.42

 

13.88

 

Book value per share - R$

 

35.90

 

47.58

 

35.90

 

47.58

 

Outstanding shares (thousand)

 

82,487

 

41,447

 

82,487

 

41,447

 

 

METALÚRGICA GERDAU S.A. - Non Consolidated

CASH FLOW (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

4Q2003

 

2004

 

2003

 

NET INCOME

 

404,543

 

218,142

 

1,437,075

 

575,179

 

Equity pick up

 

(291,465

)

(235,124

)

(1,342,842

)

(610,001

)

Gain/Loss in disposal of investment

 

(170,990

)

(42

)

(170,953

)

(1,445

)

Monetary and exchange variation

 

1,172

 

1,091

 

5,198

 

5,563

 

Depreciation and amortization

 

37

 

36

 

145

 

149

 

Income tax

 

52,989

 

4,189

 

47,393

 

8,420

 

Interest paid

 

—

 

11

 

778

 

14

 

Contingencies/legal deposits

 

(32

)

3

 

(940

)

18

 

Changes in trade account payable

 

37

 

1

 

58

 

(27

)

Other operating activities accounts

 

(30,141

)

10,338

 

(33,737

)

8,656

 

Net cash provided by operating activities

 

(33,850

)

(1,355

)

(57,825

)

(13,474

)

Investments acquisitions/ disposals

 

155,926

 

(1,344

)

155,144

 

5,097

 

Interest on Equity/Distribution of Profit Received

 

131,637

 

36,119

 

351,884

 

185,108

 

Investments acquisitions/ disposals

 

287,563

 

34,775

 

507,028

 

190,205

 

Working capital financing

 

(2,014

)

(1,829

)

(7,778

)

(7,015

)

Debentures

 

—

 

—

 

(586

)

(423

)

Inter companies loans

 

(20,419

)

(2,759

)

2,839

 

(2,506

)

Capital increase/Treasury stock

 

—

 

(7,049

)

(14,441

)

(7,049

)

Dividend/ interest & statutory particip. payment

 

(135,560

)

(34,804

)

(358,623

)

(198,413

)

Cash provided by (applied to) financing activities

 

(157,993

)

(46,441

)

(378,589

)

(215,406

)

Net change in cash

 

95,720

 

(13,021

)

70,614

 

(38,675

)

Cash balance

 

 

 

 

 

 

 

 

 

At the beginning of the period

 

80

 

38,207

 

25,186

 

63,861

 

At the end of the period

 

95,800

 

25,186

 

95,800

 

25,186

 

Cash composition

 

 

 

 

 

 

 

 

 

Temporary cash investments

 

95,702

 

25,163

 

95,702

 

25,163

 

Cash

 

98

 

23

 

98

 

23

 

 

16


 

GERDAU S.A. - Consolidated

BALANCE SHEET (Unaudited)

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL ASSETS

 

18,663,822

 

14,246,741

 

Current assets

 

9,556,265

 

5,334,880

 

Cash and cash & equivalents

 

333,720

 

121,615

 

Trade accounts receivable

 

2,496,808

 

1,526,176

 

Taxes recoverable

 

240,462

 

120,815

 

Temporary cash investments

 

1,708,247

 

895,391

 

Inventories

 

4,236,642

 

2,336,598

 

Deferred income tax & other

 

540,386

 

334,285

 

Long-term receivables

 

1,034,319

 

1,051,257

 

Accounts receivable

 

10,212

 

10,212

 

A/R with related parties

 

1,448

 

26,979

 

Deferred income tax & other

 

1,022,659

 

1,014,066

 

Permanent assets

 

8,073,238

 

7,860,604

 

Investments

 

112,017

 

461,412

 

Fixed assets

 

7,927,363

 

7,378,725

 

Deferred

 

33,858

 

20,467

 

 

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL LIABILITIES

 

18,663,822

 

14,246,741

 

Current Liabilities

 

5,247,668

 

4,342,899

 

Loans and Financing

 

1,968,397

 

2,414,376

 

Debentures

 

2,986

 

3,027

 

Trade accounts payable

 

1,935,953

 

1,192,428

 

Taxes payable

 

386,238

 

171,776

 

Dividends payable

 

306,771

 

154,220

 

Deferred income tax & other

 

647,323

 

407,072

 

Long-term liabilities

 

5,803,107

 

5,048,695

 

Loans and Financing

 

3,490,374

 

3,396,085

 

Debentures

 

915,086

 

449,039

 

Deferred income tax & other

 

1,397,647

 

1,203,571

 

Minority Shareholders

 

1,539,191

 

726,751

 

Shareholders’ equity

 

6,073,856

 

4,128,396

 

Capital stock

 

3,471,312

 

1,735,656

 

Capital reserves

 

376,672

 

376,672

 

Profit reserves

 

2,225,872

 

2,016,068

 

Retained earning

 

—

 

—

 

 

17


 

GERDAU S.A. - Consolidated

FINANCIAL STATEMENT (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

4Q2003

 

2004

 

2003

 

GROSS SALES REVENUE

 

5,843,157

 

4,169,144

 

23,407,573

 

15,782,967

 

Deductions of gross revenues

 

(948,743

)

(653,069

)

(3,810,311

)

(2,416,006

)

Net sales revenues

 

4,894,414

 

3,516,075

 

19,597,262

 

13,366,961

 

Cost of sales

 

(3,410,686

)

(2,647,582

)

(13,352,238

)

(10,076,740

)

Gross profit

 

1,483,728

 

868,493

 

6,245,024

 

3,290,221

 

Operating result

 

(320,546

)

(518,973

)

(1,790,357

)

(2,143,009

)

Selling expenses

 

(127,439

)

(125,767

)

(455,175

)

(448,131

)

General and administrative expenses

 

(258,476

)

(238,371

)

(1,003,826

)

(763,440

)

Fianancial income

 

42,106

 

(685

)

209,846

 

52,029

 

Financial expenses

 

40,327

 

(155,666

)

(385,952

)

(698,599

)

Other operating income (expenses), net

 

43,136

 

15,694

 

187,866

 

14,489

 

Equity pick-up

 

(60,200

)

(14,178

)

(343,116

)

(299,357

)

Operating profit

 

1,163,182

 

349,520

 

4,454,667

 

1,147,212

 

Non-operating income (expenses), net

 

(2,383

)

6,147

 

(24,930

)

(7,608

)

Profit before taxes/participation

 

1,160,799

 

355,667

 

4,429,737

 

1,139,604

 

Provision for income tax

 

(307,676

)

(115,792

)

(951,201

)

(308,681

)

Deferred income tax

 

(86,310

)

232,589

 

(202,286

)

449,605

 

Statutory participation

 

(17,721

)

(12,596

)

(41,363

)

(26,043

)

Net Profit for the period

 

749,092

 

459,868

 

3,234,887

 

1,254,485

 

 

 

 

 

 

 

 

 

 

 

Controlling Shareholders

 

635,778

 

458,027

 

2,831,339

 

1,137,216

 

Minority Shareholders

 

113,314

 

1,841

 

403,548

 

117,269

 

 

GERDAU S.A. - Consolidated

CASH FLOW (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

4Q2003

 

2004

 

2003

 

NET INCOME

 

749,092

 

459,868

 

3,234,887

 

1,254,485

 

Equity pick up

 

60,200

 

14,179

 

343,116

 

299,357

 

Provision for credit risk

 

(1,125

)

4,415

 

7,323

 

20,705

 

Gain/Loss in fixed asset disposal

 

2,840

 

(5,148

)

9,058

 

10,056

 

Gain/Loss in disposal of investment

 

11

 

(1,710

)

4,382

 

(111

)

Monetary and exchange variation

 

(138,706

)

42,830

 

(99,284

)

130,790

 

Depreciation and amortization

 

191,147

 

156,452

 

766,665

 

604,887

 

Income tax

 

(64,539

)

(189,572

)

463,938

 

(438,731

)

Interest paid

 

85,264

 

155,510

 

406,534

 

587,143

 

Contingencies/legal deposits

 

(8,880

)

(9,466

)

5,295

 

624

 

Changes in trade account receivable

 

263,955

 

124,826

 

(687,562

)

(180,879

)

Changes in inventories

 

(453,209

)

(64,053

)

(1,402,408

)

(207,267

)

Changes in trade accounts payable

 

(15,886

)

65,414

 

490,458

 

187,378

 

Other accounts in operating activities

 

(173,196

)

31,666

 

(56,428

)

84,468

 

Net cash provided by operating activities

 

496,968

 

785,211

 

3,485,974

 

2,352,905

 

Fixed assets acquisitons/ disposals

 

(470,634

)

(247,126

)

(1,173,491

)

(873,039

)

Deferred charges

 

(7,602

)

(1,987

)

(18,006

)

(7,246

)

Investments acquisitions/ disposals

 

(27,353

)

(53,621

)

(37,686

)

(71,603

)

Assets acquisition

 

(924,457

)

—

 

(924,457

)

—

 

Cash (applied to) investing activities

 

(1,430,046

)

(302,734

)

(2,153,640

)

(951,888

)

Fixed assets suppliers

 

146,150

 

10,107

 

144,574

 

2,195

 

Working capital financing

 

66,360

 

(406,850

)

(136,784

)

(336,901

)

Debentures

 

369,291

 

(370,655

)

399,120

 

(394,340

)

Proceeds from fixed assets financing

 

491,638

 

180,941

 

762,766

 

454,989

 

Payments of fixed assets financing

 

(128,501

)

(189,853

)

(677,357

)

(541,308

)

Interest paid for financing

 

(46,926

)

(102,093

)

(372,676

)

(402,611

)

Inter companies loans

 

25,004

 

16,013

 

32,872

 

(11,316

)

Capital increase/Treasury stock

 

491,819

 

(17,102

)

466,146

 

(17,102

)

Dividend/ interest & statutory particip, payment

 

(300,127

)

(81,182

)

(843,493

)

(407,910

)

Cash provided by (applied to) financing activities

 

1,114,708

 

(960,674

)

(224,832

)

(1,654,304

)

Net change in cash

 

181,630

 

(478,197

)

1,107,502

 

(253,287

)

Cash balance

 

 

 

 

 

 

 

 

 

At the beginning of the period

 

1,947,618

 

1,497,581

 

1,017,006

 

1,430,656

 

Effect of exchange rate changes on cash

 

(87,281

)

(2,961

)

(82,541

)

(173,735

)

Opening balance of incorporated companies for the year

 

—

 

583

 

 

 

13,372

 

At the end of the period

 

2,041,967

 

1,017,006

 

2,041,967

 

1,017,006

 

Cash composition

 

 

 

 

 

 

 

 

 

Temporary cash investments

 

1,708,247

 

895,391

 

1,708,247

 

895,391

 

Cash

 

333,720

 

121,615

 

333,720

 

121,615

 

 

18


 

GERDAU S.A.- Non consolidated

BALANCE SHEET (Unaudited)

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL ASSETS

 

7,373,150

 

4,727,498

 

Current assets

 

195,987

 

415,089

 

Cash and cash & equivalents

 

1,347

 

10

 

Taxes recoverable

 

32,038

 

1,844

 

Temporary cash investments

 

14,362

 

177,674

 

Others

 

148,240

 

235,561

 

Long-term receivables

 

76,699

 

64,097

 

Accounts receivable

 

8,908

 

8,908

 

Deferred income tax & other

 

67,791

 

55,189

 

Permanent assets

 

7,100,464

 

4,248,312

 

Investments

 

7,100,464

 

4,248,312

 

 

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL LIABILITIES

 

7,373,150

 

4,727,498

 

Current Liabilities

 

457,267

 

190,261

 

Taxes payable

 

6,808

 

42,455

 

Dividends payable

 

280,378

 

131,916

 

A/T with related parties

 

164,549

 

—

 

Other accounts payable

 

5,532

 

15,890

 

Long-term liabilities

 

842,027

 

408,841

 

Debentures

 

692,476

 

227,878

 

A/P with related parties

 

—

 

20,961

 

Provision for contingencies & other

 

149,551

 

160,002

 

Shareholders’ equity

 

6,073,856

 

4,128,396

 

Capital stock

 

3,471,312

 

1,735,656

 

Capital reserves

 

376,672

 

376,672

 

Profit reserves

 

2,225,872

 

2,016,068

 

Retained earning

 

—

 

—

 

 

19


 

GERDAU S.A. - Non consolidated

FINANCIAL STATEMENT (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

4Q2003

 

2004

 

2003

 

 

 

 

 

Pro forma

 

 

 

Pro forma

 

GROSS SALES REVENUE

 

 

 

 

 

 

 

 

 

Deductions of gross revenues

 

—

 

—

 

—

 

—

 

Net sales revenues

 

—

 

—

 

—

 

—

 

Cost of sales

 

—

 

—

 

—

 

—

 

Gross profit

 

—

 

—

 

—

 

—

 

Operating result

 

641,412

 

458,332

 

2,813,598

 

1,127,913

 

Selling expenses

 

—

 

—

 

—

 

—

 

General and administrative expenses

 

(5,770

)

(3,523

)

(43,942

)

(13,507

)

Financial income

 

3,407

 

8,692

 

42,326

 

25,731

 

Financial expenses

 

(19,204

)

(9,336

)

(49,329

)

(52,876

)

Other operating income (expenses), net

 

25,859

 

—

 

28,057

 

—

 

Equity pick-up

 

637,120

 

462,499

 

2,836,486

 

1,168,565

 

Operating profit

 

641,412

 

458,332

 

2,813,598

 

1,127,913

 

Non-operating result, net

 

(1,065

)

—

 

(1,065

)

—

 

Profit before taxes/participation

 

640,347

 

458,332

 

2,812,533

 

1,127,913

 

Provision for income tax

 

3

 

—

 

4

 

—

 

Deferred income tax

 

(4,204

)

1,417

 

20,063

 

13,822

 

Statutory participation

 

(368

)

(379

)

(1,261

)

(1,230

)

Net Profit for the period

 

635,778

 

459,370

 

2,831,339

 

1,140,505

 

 

 

 

 

 

 

 

 

 

 

Profit per share - R$

 

2.15

 

3.10

 

9.59

 

7.69

 

Book value per share - R$

 

20.58

 

27.83

 

20.58

 

27.83

 

Outstanding shares (thousand)

 

295,135

 

148,354

 

295,135

 

148,354

 

 

GERDAU S.A. - Non Consolidated
CASH FLOW (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

2004

 

NET INCOME

 

635,778

 

2,831,339

 

Equity pick up

 

(637,120

)

(2,836,486

)

Gain/Loss in fixed asset disposal

 

1,065

 

1,065

 

Monetary and exchange variation

 

(6,008

)

(9,556

)

Depreciation and amortization

 

—

 

—

 

Income tax

 

3,808

 

(34,703

)

Interest paid

 

23,307

 

53,277

 

Contingencies/legal deposits

 

(46

)

(110

)

Changes in trade account payable

 

72

 

72

 

Other operating activities accounts

 

(28,170

)

(42,524

)

Net cash provided by operating activities

 

(7,314

)

(37,626

)

Investments acquisitions/ disposals

 

(522,496

)

(802,735

)

Interest on Equity/Distribution of Profit Received

 

272,246

 

833,126

 

Investments acquisitions/ disposals

 

(250,250

)

30,391

 

Debentures

 

368,527

 

411,560

 

Inter companies loans

 

(46,324

)

196,195

 

Capital increase/Treasury stock

 

—

 

(27,036

)

Dividend/ interest & statutory particip, payment

 

(274,398

)

(735,459

)

Cash provided by (applied to) financing activities

 

47,805

 

(154,740

)

Net change in cash

 

(209,759

)

(161,975

)

Cash balance

 

 

 

 

 

At the beginning of the period

 

225,468

 

177,684

 

At the end of the period

 

15,709

 

15,709

 

Cash composition

 

 

 

 

 

Temporary cash investments

 

14,362

 

14,362

 

Cash

 

1,347

 

1,347

 

 

20


 

GERDAU AÇOMINAS S.A. - Consolidated

BALANCE SHEET (Unaudited)

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL ASSETS

 

9,619,530

 

7,584,716

 

Current assets

 

4,371,823

 

2,548,754

 

Cash and cash & equivalents

 

49,915

 

64,969

 

Trade accounts receivable

 

1,269,716

 

762,045

 

Taxes recoverable

 

176,067

 

98,665

 

Temporary cash investments

 

713,906

 

193,358

 

Inventories

 

1,742,064

 

1,179,545

 

Deferred income tax & other

 

420,155

 

250,172

 

Long-term receivables

 

249,638

 

452,500

 

A/R with related parties

 

21,804

 

—

 

Deferred income tax & other

 

227,834

 

452,500

 

Permanent assets

 

4,998,069

 

4,583,462

 

Investments

 

43,669

 

66,638

 

Fixed assets

 

4,924,735

 

4,504,438

 

Deferred

 

29,665

 

12,386

 

 

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL LIABILITIES

 

9,619,530

 

7,584,716

 

Current Liabilities

 

2,674,073

 

3,058,502

 

Loans and Financing

 

895,067

 

1,898,976

 

Trade accounts payable

 

848,906

 

466,675

 

Taxes payable

 

291,106

 

107,126

 

Dividends/Interest on capital stock payable

 

306,197

 

283,986

 

A/P with related parties

 

—

 

125,320

 

Deferred income tax & other

 

332,797

 

176,419

 

Long-term liabilities

 

2,179,411

 

1,495,894

 

Loans and Financing

 

2,083,176

 

1,424,506

 

Provision for contingencies & other

 

96,235

 

71,388

 

Minority Shareholders

 

—

 

—

 

Shareholders’ equity

 

4,766,046

 

3,030,320

 

Capital stock

 

2,340,576

 

2,340,576

 

Capital reserves

 

289,667

 

98,762

 

Profit reserves

 

2,135,803

 

60,222

 

Retained earning

 

—

 

530,760

 

 

21


 

GERDAU AÇOMINAS S.A. - Consolidated

FINANCIAL STATEMENT (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

4Q2003

 

2004

 

2003

 

 

 

 

 

Pro forma

 

 

 

Pro forma

 

GROSS SALES REVENUE

 

3,478,926

 

2,370,350

 

13,090,660

 

9,089,522

 

Deductions of gross revenues

 

(754,381

)

(474,476

)

(2,935,246

)

(1,783,908

)

Net sales revenues

 

2,724,545

 

1,895,874

 

10,155,414

 

7,305,614

 

Cost of sales

 

(1,627,816

)

(1,212,433

)

(5,914,999

)

(4,548,121

)

Gross profit

 

1,096,729

 

683,441

 

4,240,415

 

2,757,493

 

Operating result

 

(153,610

)

(337,661

)

(885,851

)

(1,301,845

)

Selling expenses

 

(114,039

)

(97,682

)

(400,301

)

(337,357

)

General and administrative expenses

 

(162,490

)

(140,748

)

(645,510

)

(483,858

)

Financial income

 

12,405

 

72,322

 

82,364

 

72,846

 

Financial expenses

 

100,153

 

(180,389

)

(57,529

)

(562,240

)

Other operating income (expenses), net

 

11,160

 

8,908

 

145,150

 

10,087

 

Equity pick-up

 

(799

)

(72

)

(10,025

)

(1,323

)

Operating profit

 

943,119

 

345,780

 

3,354,564

 

1,455,648

 

Non-operating income, net

 

390

 

4,433

 

(13,363

)

(9,033

)

Profit before taxes/participation

 

943,509

 

350,213

 

3,341,201

 

1,446,615

 

Provision for income tax

 

(164,132

)

(78,093

)

(617,176

)

(331,229

)

Deferred income tax

 

(137,751

)

150,361

 

(200,939

)

357,919

 

Statutory participation

 

(16,854

)

(11,957

)

(39,603

)

(24,553

)

Net Profit for the period

 

624,772

 

410,524

 

2,483,483

 

1,448,752

 

 

 

 

 

 

 

 

 

 

 

Controlling Shareholders

 

624,772

 

410,524

 

2,483,483

 

1,448,752

 

Minority Shareholders

 

—

 

—

 

—

 

—

 

 

GERDAU AÇOMINAS S.A. - Consolidated

CASH FLOW (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

2004

 

NET INCOME

 

624,772

 

2,483,483

 

Equity pick up

 

799

 

10,025

 

Provision for credit risk

 

(1,524

)

5,135

 

Gain/Loss in fixed asset disposal

 

(375

)

9,843

 

Gain/Loss in disposal of investment

 

—

 

3,574

 

Monetary and exchange variation

 

(126,510

)

(128,234

)

Depreciation and amortization

 

128,924

 

492,433

 

Income tax

 

78,081

 

318,769

 

Interest paid

 

35,910

 

179,827

 

Contingencies/legal deposits

 

(8,485

)

6,136

 

Changes in trade account receivable

 

(81,079

)

(541,337

)

Changes in inventories

 

(207,368

)

(562,455

)

Changes in trade accounts payable

 

37,504

 

264,557

 

Other accounts in operating activities

 

25,460

 

244,826

 

Net cash provided by operating activities

 

506,109

 

2,786,582

 

Fixed assets acquisitons/ disposals

 

(417,796

)

(919,758

)

Deferred charges

 

(7,602

)

(18,006

)

Investments acquisitions/ disposals

 

—

 

650

 

Cash (applied to) investing activities

 

(425,398

)

(937,114

)

Fixed assets suppliers

 

145,915

 

151,022

 

Working capital financing

 

22,618

 

232,498

 

Proceeds from fixed assets financing

 

171,525

 

442,653

 

Payments of fixed assets financing

 

(91,038

)

(898,300

)

Interest paid for financing

 

(40,402

)

(177,706

)

Inter companies loans

 

92,584

 

(148,141

)

Dividend/ interest & statutory particip. payment

 

(297,911

)

(939,655

)

Cash provided by (applied to) financing activities

 

3,291

 

(1,337,629

)

Net change in cash

 

84,002

 

511,839

 

Cash balance

 

 

 

 

 

At the beginning of the period

 

685,337

 

258,327

 

Effect of exchange rate changes on cash

 

(5,518

)

(6,345

)

At the end of the period

 

763,821

 

763,821

 

Cash composition

 

 

 

 

 

Temporary cash investments

 

713,906

 

713,906

 

Cash

 

49,915

 

49,915

 

 

22


 

GERDAU AÇOMINAS S.A. - Non consolidated

BALANCE SHEET (Unaudited)

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL ASSETS

 

9,589,967

 

7,569,500

 

Current assets

 

4,320,660

 

2,524,173

 

Cash and cash & equivalents

 

49,758

 

64,110

 

Trade accounts receivable

 

1,398,760

 

829,542

 

Taxes recoverable

 

169,655

 

96,652

 

Temporary cash investments

 

548,192

 

115,156

 

Inventories

 

1,732,128

 

1,172,964

 

Deferred income tax & other

 

422,167

 

245,749

 

Long-term receivables

 

224,657

 

440,229

 

A/R with related parties

 

8,178

 

—

 

Deferred income tax & other

 

216,479

 

440,229

 

Permanent assets

 

5,044,650

 

4,605,098

 

Investments

 

154,372

 

197,463

 

Fixed assets

 

4,866,670

 

4,397,120

 

Deferred

 

23,608

 

10,515

 

 

 

Corporate Law - R$ thousand

 

Dec. 2004

 

Dec. 2003

 

TOTAL LIABILITIES

 

9,589,967

 

7,569,500

 

Current Liabilities

 

2,647,960

 

3,055,693

 

Loans and Financing

 

877,613

 

1,889,592

 

Trade accounts payable

 

844,851

 

464,233

 

Taxes payable

 

287,503

 

105,363

 

Dividends/Interest on capital stock payable

 

306,197

 

283,986

 

A/T with related parties

 

—

 

138,309

 

Deferred income tax & other

 

331,796

 

174,210

 

Long-term liabilities

 

2,175,961

 

1,483,487

 

Loans and Financing

 

2,079,721

 

1,412,705

 

Provision for contingencies & other

 

96,240

 

70,782

 

Shareholders’ equity

 

4,766,046

 

3,030,320

 

Capital stock

 

2,340,576

 

2,340,576

 

Capital reserves

 

289,667

 

98,762

 

Profit reserves

 

2,135,803

 

60,222

 

Retained earning

 

—

 

530,760

 

 

23


 

GERDAU AÇOMINAS S.A. - Non consolidated

FINANCIAL STATEMENT (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

4Q2003

 

2004

 

2003

 

 

 

 

 

Pro forma

 

 

 

Pro forma

 

GROSS SALES REVENUE

 

3,439,446

 

2,357,208

 

12,964,674

 

9,053,884

 

Deductions of gross revenues

 

(752,270

)

(474,265

)

(2,928,321

)

(1,782,154

)

Net sales revenues

 

2,687,176

 

1,882,943

 

10,036,353

 

7,271,730

 

Cost of sales

 

(1,605,316

)

(1,200,255

)

(5,828,901

)

(4,514,209

)

Gross profit

 

1,081,860

 

682,688

 

4,207,452

 

2,757,521

 

Operating result

 

(141,579

)

(332,977

)

(859,808

)

(1,297,307

)

Selling expenses

 

(112,975

)

(97,147

)

(396,972

)

(336,656

)

General and administrative expenses

 

(161,848

)

(139,798

)

(638,680

)

(481,416

)

Financial income

 

11,825

 

78,485

 

81,317

 

69,898

 

Financial expenses

 

100,084

 

(186,455

)

(59,337

)

(561,029

)

Other operating income (expenses), net

 

10,622

 

8,902

 

143,473

 

10,055

 

Equity pick-up

 

10,713

 

3,036

 

10,391

 

1,841

 

Operating profit

 

940,281

 

349,711

 

3,347,644

 

1,460,214

 

Non-operating income (expenses), net

 

(265

)

(2,324

)

(13,916

)

(15,780

)

Profit before taxes/participation

 

940,016

 

347,387

 

3,333,728

 

1,444,434

 

Provision for income tax

 

(160,661

)

(77,941

)

(610,180

)

(331,077

)

Deferred income tax

 

(137,730

)

153,035

 

(200,462

)

359,948

 

Statutory participation

 

(16,854

)

(11,957

)

(39,603

)

(24,553

)

Net Profit for the period

 

624,771

 

410,524

 

2,483,483

 

1,448,752

 

 

 

 

 

 

 

 

 

 

 

Profit per share - R$

 

3.94

 

2.59

 

15.65

 

9.13

 

Book value per share - R$

 

30.04

 

19.10

 

30.04

 

19.10

 

Outstanding shares (thousand)

 

158,652

 

158,652

 

158,652

 

158,652

 

 

GERDAU AÇOMINAS S.A. - Non Consolidated

CASH FLOW (Unaudited)

 

Corporate Law - R$ thousand

 

4Q2004

 

2004

 

NET INCOME

 

624,771

 

2,483,483

 

Equity pick up

 

(10,713

)

(10,391

)

Provision for credit risk

 

(1,524

)

5,135

 

Gain/Loss in fixed asset disposal

 

(387

)

9,771

 

Gain/Loss in disposal of investment

 

666

 

4,227

 

Monetary and exchange variation

 

(125,998

)

(128,671

)

Depreciation and amortization

 

127,942

 

485,481

 

Income tax

 

77,160

 

317,856

 

Interest paid

 

35,731

 

177,641

 

Contingencies/legal deposits

 

(8,451

)

6,469

 

Changes in trade account receivable

 

(41,181

)

(604,478

)

Changes in inventories

 

(209,401

)

(555,229

)

Changes in trade accounts payable

 

33,937

 

260,590

 

Other operating activities accounts

 

24,195

 

244,071

 

Net cash provided by operating activities

 

526,747

 

2,695,955

 

Fixed assets acquisitons/ disposals

 

(417,386

)

(913,233

)

Deferred charges

 

(5,741

)

(13,803

)

Investments acquisitions/ disposals

 

—

 

(7,984

)

Interest on Equity/Distribution of Profit Received

 

—

 

900

 

Cash (applied to) investing activities

 

(423,127

)

(934,120

)

Fixed assets suppliers

 

145,930

 

151,445

 

Working capital financing

 

8,007

 

219,262

 

Proceeds from fixed assets financing

 

171,525

 

442,306

 

Payments of fixed assets financing

 

(90,594

)

(892,765

)

Interest paid for financing

 

(40,220

)

(176,594

)

Inter companies loans

 

94,763

 

(146,502

)

Dividend/ interest & statutory particip. payment

 

(297,911

)

(940,345

)

Cash provided by (applied to) financing activities

 

(8,500

)

(1,343,193

)

Net change in cash

 

95,120

 

418,642

 

Cash balance

 

 

 

 

 

At the beginning of the period

 

502,788

 

179,266

 

Opening balance of incorporated companies for the year

 

42

 

42

 

At the end of the period

 

597,950

 

597,950

 

Cash composition

 

 

 

 

 

Temporary cash investments

 

548,192

 

548,192

 

Cash

 

49,758

 

49,758

 

 

24