Answers to Your Questions

What is "Metal Spread"?

The term Metal Spread refers to the per ton difference, or margin, between the sales price of steel and the yielded scrap cost. The Metal Spread is an important figure in determining Gerdau's ability to earn a profit. The Metal Spread represents the dollars per ton which are available to cover conversion costs, sales and administrative expenses, debt, taxes and finally profit. With production capacity of approximately 2 million tons, each $1 change in Metal Spread means a $2 million change in pre-tax profit to the company.

What is "EBITDA"?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortization and is an important economic indicator used by finance professionals and investors to evaluate the performance of a company's operations. EBITDA indicates the cash profitability of a company or business unit while ignoring the impact of non-comparable capital and tax structures. This allows for a more "apples to apples" comparison to be made. EBITDA is an important measure used by Gerdau's bank partners to measure compliance with debt covenants and set interest rate margins.


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