Siderperú doubles Q2 profit

Gerdau's Peruvian unit more than doubled its second quarter net income as higher steel prices offset rising costs.

Siderperú posted a 26mn-sol (US$8mn) profit in Q2 compared with a 12mn-sol profit a year earlier, the Lima-based company said in a corporate filing to securities regulator SMV. Sales rose 26.4% to 373mn soles from 295mn soles a year ago.

Siderperú, which operates a 520,000t/y plant in the northern port of Chimbote, said sales costs rose 19% to 320mn soles in the period due to higher raw material costs.

Exports rose to 20.2mn soles in the first half from 15mn soles a year earlier, the company said. Peru mainly exports steel to Colombia, Ecuador and Bolivia. Siderperú, which has invested US$245mn in the mill since Gerdau acquired the company in 2006, can produce long and flat-steel products at its plant in the Ancash region.

The company competes in Peru with Aceros Arequipa, which last week reported a 36mn-sol profit.

Steel producers are counting on steel demand to rise as President Martín Vizcarra accelerates a US$8bn reconstruction program after record flooding and landslides sparked by El Niño last year left 163 dead and 291,000 homeless and destroyed roads, bridges and railway lines.