SAO PAULO (Reuters) – Brazilian steelmaker Gerdau SA on Thursday reported first-quarter web revenue down 17% from the earlier three months at 2.94 billion reais ($597.96 million) as weaker ends in Brazil offset an enchancment in North America.

The underside line got here in beneath an anticipated 3.09 billion reais in an analyst ballot by Refinitiv.

Gerdau’s home EBITDA margin fell 7.2 proportion factors from the earlier quarter to 24.3%, the agency mentioned, mentioning that gross sales have been almost flat at a excessive stage however the total situation posed challenges as rates of interest rise.

“Prospects for 2022 are for income progress and quantity drop in distribution and retail. In actual property improvement, we challenge stability for each launches and metal gross sales quantity,” Gerdau mentioned in a securities submitting.

The drop in Brazilian margins ended up offsetting robust ends in North America, which had been the spotlight of Gerdau’s fourth quarter earnings.

EBITDA margin in North America grew by 5.6 proportion factors to 27.4%, it mentioned.

Gerdau’s first-quarter whole metal gross sales totaled 3.06 million tonnes, down 1% from a 12 months earlier and three% from the earlier three months. Output rose 4% on a sequential foundation to three.4 million tonnes.

Adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) fell 3% from the earlier quarter to five.83 billion reais.

Analysts at Financial institution of America (NYSE:) had anticipated a decline in Gerdau EBITDA on a quarterly foundation, which they mentioned can be the newest of a sequence of combined outcomes from Brazilian steelmakers on persistent value pressures, however added that Gerdau’s larger manufacturing flexibility and decrease publicity to coal and iron ore might assist it outperform friends.

($1 = 4.9167 reais)