PORTO ALEGRE, Brazil, Feb. 13 /PRNewswire-FirstCall/ -- Production In 2007, the production of crude steel (slabs, blooms and billets) totaled 17.9 million tonnes, an increase of 13.6% as compared to 2006. This increase in volume is partially due to the improvement in the operations of the several regions in which Gerdau operates and also the consolidation of new companies acquired during 2007. The production of rolled products reached 15.2 million tonnes, 18.4% greater than the production in 2006. Sales Consolidated sales in 2007 totaled 17.2 million tonnes, an increase of 15.2% as compared to 2006. Of this total, 41.0% derived from operations in Brazil and the remaining 59.0% derived from companies abroad. Excluding the acquisitions carried out in the period in comparison, sales grew by 3.6%. Results In 2007, the consolidated net sales reached R$ 30.6 billion, a growth of 18.3% as compared to 2006, basically due to the greater sales volume during the period, the greater prices of the steel products in the foreign markets and the acquisitions made during the period. Cash generation, represented by the EBITDA (earnings before interest, taxes, depreciation and amortization) reached R$ 6.2 billion in 2007, which corresponds to an increase of 6.9% over last year. The margin reached 20.4%. In 2007, consolidated net income was R$ 4.3 billion, an increase of 1.1% over 2006. It is important to mention that some non-recurrent items affected net income in both 2006 and 2007, preventing their comparability. In 2006, net income was influenced by non-recurrent revenues of R$ 263 million and in 2007 by non-recurrent expenses of R$ 164 million. Excluding those effects, net income would have been R$ 4.5 billion in 2007, representing a growth of 11.9%. Investments According to the investment program for the 2007-2009 triennium, Gerdau invested US$ 1.5 billion in fixed assets in 2007. Concurrently, Gerdau invested an additional US$ 4.8 billion in acquisitions both in countries where it already has operations as in geographical expansion. Financial Liabilities Net debt (loans and financing, plus debentures, less cash and cash equivalents and securities), as of December 31, 2007, amounted to R$ 10.8 billion. This amount is significantly greater than the amount as of December 31, 2006 because it included debt raised for the payment of acquisitions carried out throughout the year, in particular the acquisition of Chaparral, in September. Considering the gross debt (loans and financing, plus debentures), 16.0% was short term (R$ 2.5 billion) and 84.0% was long term (R$ 13.4 billion). The average payment term of this debt is 6 years and 4 months. At the end of the year, cash and cash equivalents, plus financial investments, totaled R$ 5.1 billion, of which R$ 3.1 billion (60.6%) was indexed to foreign currencies, mainly the U.S. dollar. DATASOURCE: GERDAU S.A. CONTACT: Thiago Deiro, Assessor de RI, Gerdau S.A., 55 (51) 3323-2703, Web site: http://www.gerdau.com.br/

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