Gerdau S.A. - Consolidated First Semester 2004 Results Data Presented in Accordance With Brazilian Corporate Law PORTO ALEGRE, Brazil, Aug. 3 /PRNewswire-FirstCall/ -- * Net Profit -- Consolidated net profit for the first semester of 2004 was strongly influenced by the substantial improvement of the Gerdau North American operations. Of the total net profit of the period (R$ 1.3 billion -- increase of 136.8%), 37.3% was generated by the North and South American companies, Brazil not included. In the same period last year, these companies contributed with only 2.2% to the results. Net margin improved to 13.7% this year compared to 8.6% in the first half of 2003. This is due to the recovery in margins at the North American operations, and to exports from Brazil, which benefited from the high prices of steel products in the international markets. * Gross Sales -- The consolidated figure for Gross Sales reached R$ 11.3 billion, an improvement of 50.8% over that of the first half of 2003. The Brazilian operations contributed with 52.0% of this total (R$ 5.9 billion), while the North American operations contributed with 43.8% (R$ 4.9 billion) and companies in Chile, Uruguay and Argentina contributed with the remaining 4.2% (R$ 474.8 million). * Exports -- Shipments from Gerdau Acominas to clients overseas reached 1.4 million metric tons in the first half of 2004 compared to the 1.5 million of the same period last year. In spite of the reduction of 6.5% in tons shipped, revenues obtained with these Sales increased by 42.4%, reaching US$ 509.2 million (R$ 1.8 billion) this year (US$ 357.6 million pro-forma for 2003 -- R$ 1.3 billion). This is a consequence of the increase in international prices of steel products. For Gerdau Acominas, average export prices increased 47.2% in the first six months of the current year compared to those of the same period in 2003. * EBITDA -- The operating cash generation (EBITDA) reached R$ 2.6 billion this first half, compared to the R$ 1.4 billion in the same period of 2003, an increase of 92.3%. The EBITDA margin jumped from 21.3% to 27.4% for the year. Main figures 2Q04 1Q04 Variation 1S04 1S03 Variation Output (1,000 t) Slabs, blooms, billets 3,231 3,139 2.9% 6,370 6,054 5.2% Rolled products 2,434 2,390 1.9% 4,824 4,380 10.1% Sales (1,000 t) 3,135 3,148 (0.4%) 6,283 5,866 7.1% Net Sales (R$ million) 5,299 4,173 27.0% 9,472 6,357 49.0% EBITDA (R$ million) 1,716 883 94.3% 2,599 1,352 92.2% EBTDA (R$ million) 1,486 730 103.6% 2,216 1,101 101.3% Net Profit (R$ million) 873 427 104.4% 1,301 549 137.0% Shareholders' Equity (R$ million) 5,884 5,159 14.1% 5,884 4,772 23.3% Total Assets (R$ million) 16,270 15,102 7.7% 16,270 14,240 14.3% Gross margin 35.2% 24.4% 30.4% 25.4% EBITDA margin 32.4% 21.2% 27.4% 21.3% Net margin 16.5% 10.2% 13.7% 8.6% Net profit(1) / Shareholders' Equity (ROE) 34.1% 27.0% 34.1% 22.5% Net debt / Net total capitalization 45.7% 50.3% 45.7% 54.2% Net debt / EBITDA(1) 1.3x 1.8x 1.3x 2.2x (1) Last 12 months. * Output -- The output of slabs, billets and blooms this first half of 2004 reached 6.4 million metric tons, 5.2% greater than that of the first half of 2003, when output reached 6.1 million tons. The output of rolled products reached 4.8 million metric tons, 10.1% more than in 2003. Growth in demand in the North and South American markets, regions in which Gerdau has industrial units, contributed to the increase in output. The greater variation in rolled products resulted from the beginning of operation of the new wire-rod rolling mill and to the greater utilization of the installed capacity at the structural steel mill, both located at the Ouro Branco Mill. * Interest on capital stock and dividends -- Interest on capital stock and dividends for the second quarter will be paid on August 17th to shareholders of both Metalurgica Gerdau S.A. and Gerdau S.A. Payouts will be of R$ 89.1 million (R$ 1.08 per share) and R$ 191.8 million (R$ 0.65 per share), respectively. * Anticipation of interest on capital stock -- At meetings held on July 31st, the Boards of Metalurgica Gerdau S.A. and Gerdau S.A. approved the payment of interest on capital stock, in anticipation of results of the third quarter of 2004. Shareholders of Metalurgica Gerdau S.A. will receive R$ 66.0 million (R$ 0.80 per share) and Gerdau S.A. shareholders R$ 135.8 million (R$ 0.46 per share). These amounts will be paid on November 17th 2004, based on the number of shares held in each of the companies on August 13th. * Capital increase at Gerdau Ameristeel -- Gerdau Ameristeel Corporation announced on April 1st the private placement of 26.8 million shares at the price of Cdn$ 4.90, approximately US$ 100,0 million. This capital increase was made by Gerdau S.A., which increased its stake in the Company to 72.3% up from 68.6%. * Issuance of Senior Secured Export Notes -- On June 3rd Gerdau Acominas S.A. concluded the issuance of a second tranche of US$ 128 million of its Securitizaton program. This second tranche was placed with a final maturity of 8 years (April 2012) and interest of 7.321% per annum. The operation was concluded in parallel with a derivate instrument (US Treasury Lock) that reduced the effective final cost to 6.798% per annum. Obs.: a) The Quarterly Information (ITRs) of Metalurgica Gerdau S.A. and Gerdau S.A. (parent company and consolidated) in accordance with Brazilian Corporate law, will be filed today at CVM and Bovespa. The documents will also be available at http://www.gerdau.com.br/. b) The financial statements and the respective notes of Gerdau Acominas S.A. are inserted on the Quarterly Information (ITR) of Gerdau S.A., on Group 16 -- Other Information, and will be available in the Gerdau's website. c) The financial Statements in US GAAP regarding the second quarter and the first semester of 2004 are also available in the website indicated above. With more than 100 years of activities, Gerdau Group, the largest long steel producer in the Americas, has made an important contribution to the historical development of the Brazilian industry. Gerdau has 10 steel plants in Brazil in addition to 12 other located in Uruguay (1), Chile (1), Canada (3) and United States (7). Gerdau also has strategic shareholdings of 38% in SIPAR Aceros rolling mill, in Argentina and of 50% in Gallatin Steel, a flat steel producer in the United States. With a yearly production capacity of 14.6 million tons, the Gerdau Group dedicates itself to meeting the growing demands of several dynamic industries involved in the production of goods and development of the economy. Gerdau steel is used in the construction, automotive and agricultural industries. Over the past 30 years, Gerdau has become the largest supplier of steel products in Brazil, delivering long and flat steel through a network of 73 branch operations. DATASOURCE: Gerdau S.A. CONTACT: Osvaldo Schirmer, VP of Finance and IR Director of Gerdau, S.A., +55-51-3323-2703, Web site: http://www.gerdau.com.br/

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