Gerdau SA (ADR)(NYSE:GGB) based on its 3Q2016 report, sanctioned the dividend distribution amounting to R$ 34.2 million as prepayment of the minimum obligatory dividend stipulated in the Bylaws. The payment date is December 1, 2016 while the record date was close of trading on November 21. In the first three quarters of 2016, the company allocated R$ 85.7 million in the dividend distribution.
Highlights in 3Q2016
Gerdau reported that consolidated EBITDA margin came at 13.8% in 3Q16, highlighting the firm’s geographic diversification. S,G&A expenses dropped 11.5% in the first three quarters of 2016 over the comparable period of 2015, showing the measures taken by the firm’s management.
The decline in selling, general and administrative costs in reported period shows the firm’s measures taken throughout FY2016 to rationalize these costs in all business segments, as well as the positive impacts from exchange variation in the related periods. In the first three-quarters of FY2016 against the same period of FY2015, these costs declined R$222 million. Free cash flow came at R$1.0 billion in the first three months of 2016.
Consolidated crude steel production declined in 3Q2016 compared to 3Q2015 and 2Q1206, primarily due to the optimization of portfolios in the North America BD and also following the divestment of the superior steel units in Spain.
In 3Q2016, consolidated shipments declined compared to 3Q2015 following lower shipments at all business segments and to the unit divestments in Spain.
In 3Q2016 compared to 3Q2015 and 2Q2016, the variation in the financial report was mainly due to the impact from exchange disparity on obligations contracted in U.S. dollar. In accordance with IFRS, the firm designated a big part of its dues in foreign currency contracted by firms in Brazil as hedge for a part of the reserves in subsidiaries based abroad. Therefore, only the impact from exchange variation on the debt portion not associated to investment hedge is listed in the financial report, with this impact neutralized by the social contribution and income taxes on net investment hedge.
