SAO PAULO, July 31 (Reuters) - Brazilian steelmaker

Gerdau ( GGB ) on Thursday reported an 8.6% decline in its

second-quarter adjusted net profit year-on-year, slightly below

analysts' expectations despite stronger performance of North

American operations due to U.S. tariffs.

Brazil's largest steelmaker by market capitalization and

the owner of mills across the Americas, Gerdau ( GGB ) posted an 864

million reais ($154.26 million) adjusted net profit for the

quarter through the end of June. Analysts polled by LSEG

expected 847 million reais.

In the earnings report, Gerdau ( GGB ) said the profit decline

year-on-year was driven mostly by its results in South America

outside Brazil, a move partially offset by currency effects.

Gerdau's ( GGB ) adjusted earnings before interest, taxes,

depreciation and amortization (EBITDA) came in at 2.56 billion

reais, down 2.4% and mostly in line with the 2.57 billion reais

expected by analysts.

Gerdau ( GGB ) said it has seen an improvement in its main North

American operations when compared to the first quarter,

attributing it to a decline in import levels in the U.S. due to

higher tariffs and the resulting supply rebalancing.

The steelmaker relies on North America for more than

half of its net revenue. Analysts have pointed to the firm as

the potential main winner in the Brazilian steelmaking sector of

the higher steel duties set by U.S. President Donald Trump.

Gerdau's ( GGB ) total net revenues rose 5.5% year-on-year to

17.5 billion reais, with steel sales increasing 4.1% in volume.

Analysts had estimated a 17.7 billion reais net revenue.

JPMorgan analysts including Rodolfo Angele said the

results were mainly neutral. "As expected, North America showed

continued strength into 2Q25 more than compensating for the

challenges seen in the Brazil and South America business units,"

they wrote in an note to clients.

($1 = 5.6008 reais)