Financial updates for Gerdau and Azul in Brazil

S&P Global Ratings has upgraded the credit rating outlook for steelmaker Gerdau from stable to positive, while maintaining its ‘BBB’ rating. Analysts suggest the company is poised to strengthen its operational and financial performance due to high profitability in North American operations, efficiency gains from Brazilian investments, and a conservative financial policy.

Key drivers for this outlook include the expansion of the Miguel Burnier project in Minas Gerais and the completion of major investment projects, which are expected to boost cash generation and reduce capital expenditure needs. S&P anticipates consolidated EBITDA margins could rise to approximately 18% in the coming years, up from 13.9% in 2025, with leverage expected to remain below 1x EBITDA through 2028.

Separately, airline Azul has announced a financing operation of up to R$2 billion specifically for aviation fuel used in domestic operations. The financing is backed by credit risk coverage from the Brazilian government through the Agência Brasileira Gestora de Fundos Garantidores e Garantias (ABGF), utilizing resources from the Fundo de Garantia à Exportação (FGE). The company stated this move is part of its long-term restructuring plan and aims to provide financial flexibility amid volatile fuel prices.