Igor Guedes

Igor Guedes asked about the significant increase in eliminations (BRL 140 million in consolidated EBITDA) in Q4 2025, inquiring if it was related to intercompany transactions, particularly semi-finished steel exports from Brazil to other South American regions. He also sought details on the BRL 200 million CapEx allocated to the Maracanaú unit in Ceará, which was previously hibernated, asking about the changes made and how it fits into the company's footprint for increased efficiency.

Answer

CFO Rafael Japur explained that the increase in eliminations was primarily due to a large, atypical volume of billet exports from Argentina to Gerdau units in Brazil and Peru, which are intercompany transactions. Regarding Maracanaú, he clarified that the BRL 200 million CapEx was for a modernization project to adapt the melt shop to produce 12-meter billets, which are the ideal size for the state-of-the-art Sipar rolling mill in Ceará (acquired in 2019). This modernization aims to increase competitiveness and cost efficiency in the Northeast operation by better integrating the two assets, rather than reactivating a new mill or incurring one-off cost increases.

Igor Guedes asked about the growing level of exports (370,000 tons) and eliminations, specifically whether the BRL 140 million consolidated EBITDA in Q4, compared to BRL 80 million in Q3 and BRL 24 million in Q4 2024, was related to intercompany transactions, particularly semi-finished steel from Brazil to South America. He also inquired about the BRL 200 million CapEx allocated to the Maracanaú unit in Q4, one of the hibernated mills, asking about the changes made, its fit in the company's footprint, and its reactivation for increased efficiency.

Answer

CFO Rafael Japur clarified that the higher eliminations were primarily due to increased intercompany transactions, specifically a large volume of billet exports from Argentina to Gerdau units in Brazil and Peru, which was an atypical volume. Regarding Maracanaú, Japur explained that the BRL 200 million CapEx was for a modernization project to adapt the melt shop to produce 12-meter billets, which are ideal for integration with the modern Silat rolling mill in Ceará. This aims to increase competitiveness in the Northeast operation by improving cost and yield, effectively modernizing an existing mill rather than building a new one, with no expected one-off cost increases during the transition.

Igor Guedes sought clarification on the difference between managerial CapEx and its cash effect, asking about the expected trend for the year. He also pressed for details on the pricing policy for long steels, specifically the trade-off between profitability and market share.

Answer

CFO Rafael Japur explained that the variance between managerial and cash CapEx is a timing difference in supplier payments that will normalize over the year. On pricing, CEO Gustavo Werneck was unequivocal, stating that for rebar in the distribution channel, 'there is no trade-off. Our issue here is market share period.' This indicates a clear strategic priority to defend and grow its position, leveraging its cost structure and balance sheet.

Igor Guedes asked about U.S. pork, noting that while domestic demand is resilient, margins seem to reflect weaker byproduct and offal prices, despite expansion in high-value-added products. He questioned if a potential agreement on Chinese tariffs (40% tariff on Chinese products in the U.S.) could enable a return of byproduct and offal sales to China, improving margins.

Answer

Wesley Batista Filho (CEO, JBS USA) stated that more market access for products, including offals, is always positive for margins. He clarified that current margins are not compressed due to byproduct prices, as they are back to near 10% EBITDA, and the compression in Q2 was due to export backups, which are resolved. He reiterated that increased market access for any byproducts would be positive.

Igor Guedes asked about the U.S. pork business, acknowledging resilient domestic demand but noting that margins still reflect weaker prices for byproducts and offal, despite expansion in high-value-added products. He inquired if a potential agreement on Chinese tariffs could enable a return of byproduct and offal sales to China, leading to margin improvement.

Answer

Wesley Batista Filho, CEO of JBS USA, stated that increased market access for byproducts and offals would always be positive for margins. However, he clarified that current margins are not compressed due to this, having returned to near 10% EBITDA after a temporary compression in Q2 due to export backups. He reiterated that more market options are always beneficial.

Igor Guedes of Genial Investimentos asked about the U.S. Pork unit's performance, specifically whether margins could have been stronger without the negative impact on offal prices from Chinese trade issues, and if a return to normal shipment levels was expected.

Answer

Wesley Batista Filho, CEO of JBS Foods USA, confirmed that the trade disruption with China was a key factor in the quarter's performance. He stated that trade has already resumed and is back to normal as of the call date, implying a normalization of margins going forward.

Asked if JBS Brazil could increase its export share to mitigate domestic margin pressure from rising cattle prices. Also questioned if there is still room for beef cutout prices to increase in Brazil or if demand elasticity would limit further hikes.

Answer

The company's commitment is to supply all its markets, not to shift product from one to another. They believe their brand management and value-add strategy (e.g., Friboi, Maturatta) allow them to develop both domestic and export markets simultaneously. The strength and consistency of their brand serves as a hedge against market pressures.

Igor Guedes asked for a technical clarification on why capitalized interest is included in the working capital variation line on the cash flow statement, rather than being separated with other debt-related flows.

Answer

Executive Marcelo Bacci explained that this is a technical accounting item where interest related to the Cerrado project's construction must be capitalized according to accounting rules. Since it doesn't appear in the CapEx line, it requires an adjustment in the cash flow statement. He offered further clarification via the Investor Relations team.

Igor Guedes asked if there was potential to extract further synergies from the acquired Lafarge Holcim assets and inquired about the utilization rate of those specific assets.

Answer

Executive Edvaldo Rabelo confirmed that while over 100% of the original synergy targets have been captured, the process is dynamic and ongoing investments are being made to eliminate bottlenecks and enhance efficiency. An unnamed executive added that significant upside still exists in optimizing logistics, including freight costs and distribution models, which is a key focus for improving profitability further.

Igor Guedes asked about the cement business, specifically if there were any remaining synergies to be extracted from the Lafarge Holcim acquisition and what the current utilization rate of those assets was.

Answer

Executive Edvaldo Rabelo stated that the company has already captured over 100% of the originally planned synergies and continues to find more as it invests in eliminating bottlenecks and improving asset efficiency. An unnamed executive added that significant upside still exists in logistics, where CSN is working to optimize its distribution network and freight costs to further improve profitability.