Gerdau Reports Profit for Quarter

Gerdau Ameristeel Corp. reported net income of $105.5 million on net sales of $733.8 million for the most recent quarter, compared to a net loss of $6.9 million on net sales of $440.8 million the same time last year.

For the six months ended June 30, 2004, Gerdau reported net income of $127.0 million on net sales of $1.352.7 billion, compared to a net loss of $13.2 million on net sales of $857.4 million for the same time last year

Including joint ventures, mill shipments were 1.5 million tons of finished steel for the quarter, an increase of 5.5 percent over the second quarter of 2003. Average mill prices increased $207 per ton from figures the same time last year. Scrap raw material costs increased $54 per ton, compared to the same time last year, partially offsetting the mill price increases.

The metal spread increased $153 per ton from figures last year. Mill manufacturing costs were $192 per ton in the second quarter, compared to $166 per ton in the second quarter of 2003.

Including joint ventures, mill shipments were 3.0 million tons of finished steel for the first six months, an increase of 8.5 percent over the prior year.

Average mill prices increased $152 per ton, or 50.7 percent, compared to the same time last year. Scrap metal costs increased $61 per ton from the same time last year, partially offsetting the mill price increases.

Metal spreads increased $90 per ton, or 47.6 percent, compared to the previous year.

Phillip Casey, president and CEO of Gerdau Ameristeel, commented, "The June quarterly results set a record for Gerdau Ameristeel. This earnings performance also highlights the unpredictable and volatile nature of today's domestic steel industry. The effects of globalization and domestic industry consolidation have drastically changed the traditional market dynamics for steel. These emerging factors present new challenges in defining strategic decisions and in projecting the magnitude and duration of market cycles.