OREANDA-NEWS. Gerdau closed the year of 2013 with a consolidated net revenue of BRL 39.9 billion, 5% higher than the previous year. In the same period, consolidated physical sales were 18.5 million tons and remained stable compared to 2012, while steel production was 18 million tons, a volume 4.8% lower. The reduction in production primarily reflected the effort to reduce inventories in the Company, which resulted in the optimization of its working capital. The consolidated operating cash flow (EBITDA), in turn, grew 14.6% over the previous year, reaching BRL 4.8 billion, while the consolidated net profit reached BRL 1.7 billion with a 13.2% increase.

In relation to the fourth quarter, Gerdau's performance also showed an increase compared to the same period last year. Net revenues increased 14.8% to BRL 10.3 billion, and deliveries saw a 5.5% expansion, reaching 4.6 million tons. Consolidated steel production was 4.4 million tons in the period from September to December 2013, 6.2% higher than the fourth quarter of 2012. In the period, the operating cash flow (EBITDA) was BRL 1.4 billion and net profit reached BRL 492 million.

“Gerdau's better performance in 2013 reflects our effort to enhance the efficiency of our operations and the development of certain markets, although they have been growing less than expected. The results of this management effort can be seen, for example, in the reduction of almost BRL 1 billion in working capital for the year, excluding the exchange rate variations, which increased liquidity and improved the Company's indicators of indebtedness. Throughout this year, we also overcame important challenges in Brazil with the full integration of our long steel operations, the start-up of flat steel production, and the expansion of mining activities. The hot rolled coil mill in Minas Gerais is in full swing, producing with quality and meeting the expectations of our customers. We also expanded the global installed capacity in special steels with investments in Brazil and the United States, and we also completed our 1st year of operations in India. We believe that this set of initiatives should contribute to the Company's results over the next few years,” says Gerdau's chief executive officer (CEO) Andre B. Gerdau Johannpeter.

During the year 2013, the global economic scenario was reflected in the sales performance of Gerdau's operations with different effects depending on the geographic region and market segment. Sales to the Brazilian market (not including special steel plants) totaled 5.9 million tons, 10.6% over 2012, including the sales of semi-finished products (slabs and billets) and rolled products. Exports from Brazil were 1.4 million tons and 29.4% lower because of lower demand in the international market and excess installed capacity of steel in the world. In other countries of Latin America (excluding operations in Brazil), 2.8 million tons were sold in 2013, which is a 3.7% growth in sales volume. In Canada and the United States (not including special steel plants), there was a 5.1% drop in sales, which was of6.1 million tons, due to the increasing market share of imported products. The special steel operations, which includes plants in Brazil, United States, Spain, and India, sold 2.9 million tons and is a 7.5% increase compared to 2012. Investments reach BRL 2.6 billion in 2013

During the year, Gerdau invested BRL 2.6 billion in fixed assets (CAPEX), mainly for projects already underway. The main highlights were completing the installation of the hot rolled coil mill at Ouro Branco with an installed capacity of 800,000 tons of steel per year and the expansion of the mining activities, both initiatives located in Minas Gerais. In 2013, the second iron ore processing unit at Miguel Burnier (MG) went into operation, bringing the Company's production capacity to 11.5 million tons per year. Several new operations stared in 2013 in the special steels sector: the new rolling mill in Pindamonhangaba (SP), the continuous casting in Monroe (United States), and the rolling and first inspection line of bars in India, a country where there was also the modernization of the melt shop.

Besides the amount of BRL 2.6 billion in investments, another highlight is the progress being made in building the new mill for producing structural shapes in Mexico through the joint venture Gerdau Corsa. Most of the equipment has already been delivered by the manufacturers and the construction is fully underway. The new unit should go into operation in 2015 with an annual production capacity of 1 million tons of steel and 700,000 tons of rolled products.

Dividends to be paid on March 17 The publicly traded companies Gerdau S.A. and Metalurgica Gerdau S.A. will pay dividends for the fourth quarter of 2013 on March 17. BRL 119.3 million will be paid to the shareholders of Gerdau S.A. (BRL 0.07 per share) and BRL 32.5 million to the holders of Metalurgica Gerdau S.A. shares (BRL 0.08 per share). Accumulated in the year, the remuneration for the shareholders of Gerdau S.A. totaled BRL 476.7 million (BRL 0.28 per share) and Metalurgica Gerdau S.A. was BRL 150.4 million (BRL 0.37 per share).

Gerdau is the leader in the segment of long steel in the Americas and one of the main suppliers of special long steel in the world. Recently it has also started to operate in two new markets in Brazil-its own production of flat steel and the expansion of iron ore activities-initiatives that are expanding the product mix offered to the market and improving the competitiveness of its operations.

With over 45,000 employees, Gerdau has industrial operations in 14 countries in the Americas, Europe, and Asia, which together represent an installed capacity of over 25 million metric tons of steel per year. Furthermore, it is the largest recycler in Latin America and in the world, and transforms each year millions of tons of scrap steel, reinforcing its commitment to sustainable development in the regions where it operates. With over 130,000 shareholders, the shares of Gerdau's companies are listed on the stock exchanges of Sao Paulo, New York, and Madrid.