Brazil steelmaker Gerdau cuts 2019 investment plan amid weak demand

SAO PAULO (Reuters) - Brazilian steelmaker Gerdau on Wednesday lowered its estimates for 2019 investment by 18%, due to reduced demand for long steel products, weak construction demand and a fast pace of divestitures.

Gerdau reported a second-quarter profit of 373 million reais ($94.19 million), a 46.5% drop from a year earlier, according to a securities filing. The company said the fall was due to an aggressive divestment program, through which it sold assets in the United States, China and India.

Shares of the company fell 2.75% in Sao Paulo in afternoon trading, in line with its rival local steel-makers Companhia Siderurgica Nacional CSNA3.SA and Usiminas USIM5.SA.

“We are going to pay close attention to demand in the second half of 2019,” said Chief Executive Officer Gustavo Werneck during a call with analysts. “If demand bounces back, we could re-evaluate these investments.”

While Gerdau said it would lower its investment for this year, it maintained its investment guidance for 2020 and 2021.

Reporting by Alberto Alerigi Jr; Editing by Bernadette Baum