Today, Gerdau S.A. (GGB) announced consolidated results for the third quarter of 2009. The company did not provide comparable year-on-year figures in a securities filing.

Sales reached 3.9 million tons in the quarter, 15% higher than in the second quarter of 2009, reflecting the recovery in the main sectors that consume the company’s products.

Net Revenue reached R$6.8 billion in the 3rd quarter of 2009, 6% higher than in the previous quarter.

Third quarter EBITDA reached R$1.4 billion, more than double the amount in the 2nd quarter of 2009. The EBITDA margin increased to 20.2% in the 3rd quarter of 2009 from 9.3% in the 2nd quarter.

Net Income was R$655 million in the quarter, compared to a net loss of R$329 million in the previous quarter, reflecting the recovery in the company’s operating margins in the period. However, it was 54% lower than the previous year.

Investments in fixed assets totaled R$232 million. Gross debt was R$16.1 billion, a reduction of R$2.8 billion compared to June of 2009, due to amortizations and the foreign exchange variation in the period.

The company approved a payment of R$106.5 million in dividends, in the form of interest on capital, for Gerdau S.A. shareholders and R$ 67.1 million for Metalurgica Gerdau S.A. shareholders, based on the results of the first nine months of 2009.

Steel stocks provide one more interesting contrast between Brazil and America. American steel-related stocks like U.S. Steel (X), Steel Dynamics (STLD), Commercial Metals (CMC) and Cliffs Natural Resources (CLF) have already corrected 10-25% from recent 2009 highs. Brazilian steel-related stocks like Companhia Vale do Rio Doce (VALE) and GGB remains just below 12-month highs.

We expect the Brazilian economy to outperform the U.S. for many years to come.
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