(Adds details, share reaction, analyst comments)
By Gabriel Araujo
SAO PAULO, Aug 2 (Reuters) – Brazilian steelmaker Gerdau SA on Wednesday reported second-quarter net profit up 9.3% year-on-year, roughly matching expectations as it hiked prices in line with international markets.
Analysts viewed the results as solid, though shares in the company fell more than 2% after the report, with focus shifting to the coming months.
Gerdau said in a securities filing it believed in a favorable outlook for steel consumption despite global uncertainties including an economic slowdown and soaring inflation.
The company's quarterly net profit reached 4.3 billion reais ($815 million), driven by sequential sales growth in the local market and a strong performance in North America, where it said it had been operating at full capacity.
Its South American unit also benefited from a resilient construction sector, Gerdau added.
The bottom line came in roughly in line with an expected 4.26 billion real net profit in a poll by Refinitiv.
Gerdau's steel sales rose 1% to 3.25 million tonnes in the quarter.
Net revenue recorded a sharper increase of 20% to 22.97 billion reais, while adjusted EBITDA rose 13.3% to 6.68 billion reais, both also in line with estimates.
Analysts at Scotiabank said the performance was solid across all regions and said they expected Gerdau to continue to benefit from strong pricing conditions even as global markets normalize, with the company well positioned to export higher steel volumes from Brazil.
Santander analysts noted a lack of catalysts in the short term as they saw risks for steel prices in Brazil skewed to the downside. "Solid results, yet all eyes on third-quarter trends," they said in a research note.
Shares in Gerdau were down 2.75% at 23.73 reais in morning trading, making them the biggest losers in Brazil's Bovespa stock index, which dropped 0.4%.
($1 = 5.2776 reais) (Reporting by Gabriel Araujo; Editing by Louise Heavens and David Holmes)
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