Gerdau AmeriSteel Corp. reported net income of $74.3 million on net sales of $961.1 million for the quarter and net income of $152.9 million on net sales of $2.0 billion for the six months ended June 30, 2005.

Second Quarter Results—The $74.3 million net income ($0.24 per share fully diluted) compares to a net income of $105.5 million ($0.48 per share fully diluted) for the quarter ended June 30, 2004. Net sales of $961.1 million compares to net sales of $733.8 million for the quarter ended June 30, 2004. EBITDA was $159.2 million, compared to EBITDA of $168.8 million for the year-ago second quarter.

Included in Selling, General and Administrative expense is a $6.5 million non-cash pretax expense reversal to mark to market outstanding stock appreciation rights and expenses associated with other executive compensation agreements, compared to a non-cash pretax expense of $1.7 million for the quarter ended June 30, 2004.

Excluding joint ventures, the company shipped 1.6 million tons of finished steel, an increase of 23.3% over the second quarter of 2004. Average mill prices increased $16 per ton (3.1%) compared to the second quarter in 2004. Scrap raw material costs increased $9 per ton (5.8%) compared to the second quarter of 2004, partially offsetting the mill price increases. Metal spread (the difference between mill selling prices and scrap raw material cost) increased $6 per ton (1.9%) compared to the second quarter last year. Mill manufacturing costs were $231 per ton compared to $192 per ton in the second quarter of 2004, reflecting increased yield costs due to higher scrap prices, higher energy and other raw material prices, and the stronger Canadian dollar. Fabricated steel prices increased $142 per ton compared to the second quarter of the prior year.

Gerdau AmeriSteel’s consolidated operating income was $102.8 million and the operating income of the joint ventures was $23.4 million. Based on 1.7 million tons of finished steel shipped, the composite operating income was $72 per ton for the second quarter of 2005. For the three months ended June 30, 2004, Gerdau AmeriSteel’s
consolidated operating income was $136.2 million and the operating income of the joint ventures was $36.9 million. Based on 1.5 million tons of finished steel shipped, the composite operating income was $119 per ton for the second quarter of 2004.

Six Month Results—The $152.9 million net income ($0.50 per share fully diluted) compares to a net income of $127.0 million ($0.60 per share fully diluted) for the six months ended June 30, 2004. Net sales of $2.0 billion compare to net sales of $1.4 billion for the six months ended June 30, 2004. EBITDA was $310.7 million, compared to EBITDA of $228.0 million for the six months ended June 30, 2004.

Included in Selling, General and Administrative expense is a $7.5 million non-cash pretax expense reversal to mark to market outstanding stock appreciation rights and expenses associated with other executive compensation agreements, compared to a non-cash pretax expense of $3.6 million for the six months ended June 30, 2004.

Excluding joint ventures, the company shipped 3.2 million tons of finished steel, an increase of 21.1% over the six months ended June 30, 2004. Average mill prices increased $81 per ton (18.3%) compared to the six months ended June 30, 2004. Scrap raw material costs increased $15 per ton (9.0%) compared to the six months ended June 30, 2004, partially offsetting the mill price increases. Metal spread (the difference between mill selling prices and scrap raw material cost) increased $66 per ton (23.9%) compared to the six months ended June 30, 2004. Mill manufacturing costs were $235 per ton compared to $192 per ton for the six months ended June 30, 2004, reflecting increased yield costs due to higher scrap prices, higher energy and other raw material prices, and the stronger Canadian dollar. Fabricated steel prices increased $175 per ton compared to the six months ended June 30, 2004.

Gerdau AmeriSteel’s consolidated operating income was $197.3 million and the operating income of the joint ventures was $54.9 million. Based on 3.5 million tons of finished steel shipped, the composite operating income was $72 per ton. For the six months ended June 30, 2004, Gerdau AmeriSteel’s consolidated operating income was $174.9 million and the operating income of the joint ventures was $47.1 million. Based on 3.0 million
tons of finished steel shipped, the composite operating income was $74 per ton for the six months ended June 30, 2004.

On August 2, 2005, the Board of Directors approved a quarterly cash dividend of $0.02 (two US$ cents) per common share, payable September 2, 2005 to shareholders of record at the close of business on August 16, 2005.

CEO Comments—Phillip Casey, Chairman and CEO of Gerdau AmeriSteel, commented, "The second quarter was highlighted by the successful execution of well considered senior management succession plans. On June 1, 2005, the Gerdau AmeriSteel Board appointed Mario Longhi, a former Alcoa senior executive, to the position of President. The Board anticipates that Mr. Longhi will be elected to the Board in due course and succeed to the CEO position by year end 2005. Phillip Casey will remain as Chairman and together with Mr. Longhi, plans to drive the company to growth through acquisition, sustained profitability and enhanced shareholder value.

“The company remains cautiously optimistic for the second half of 2005 and is hopeful that the union issues at the Beaumont wire rod mill will be successfully resolved. The wire rod market continues to be depressed by low priced imports, but demand for most bar products, particularly rebar, remains firm and margins continued to provide an opportunity to earn acceptable returns. The profitability of the company's downstream fabricating business continues to strengthen and is reflected in a well-priced, high volume order backlog. After slower demand, high inventories and deteriorating spreads in the first half of 2005, Gallatin's order book for hot rolled carbon sheet has shown increasing activity in recent weeks."

Gerdau AmeriSteel is the second largest minimill steel producer in North America with annual manufacturing capacity of over 8.4 million tons of mill finished steel products. Through its vertically integrated network of 15 minimills (including one 50%-owned minimill), 16 scrap recycling facilities and 42 downstream operations, Gerdau AmeriSteel primarily serves customers in the eastern two-thirds of North America. The company's products are generally sold to steel service centers, steel fabricators, or directly to original equipment manufacturers (OEMs) for use in a variety of industries, including construction, automotive, mining, cellular and electrical transmission, metal building manufacturing and equipment manufacturing.