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Ternium S.A. (NYSE: TX) is Latin America's premier flat steel producer with an integrated network of production facilities in Mexico, Brazil, Argentina, Colombia, the southern United States, and Central America. The company is renowned for its high value-added steel products that cater to a wide array of industries, including automotive, construction, home appliances, capital goods, container, food, and energy sectors. With a workforce exceeding 16,800 employees and an annual production capacity of approximately 10.9 million tons of finished steel products and 4.0 million tons of iron ore pellets, Ternium is a significant player in the steel industry.
Ternium's operations are divided into two primary segments: Steel and Mining. The Steel segment includes the production of slabs, billets, round bars, hot-rolled coils, sheets, bars, stirrups, wire rods, and steel pipes. This segment also benefits from Ternium's strategic involvement in Usiminas, a leading steel manufacturer in Brazil, which enhances its market reach and operational capabilities. The Mining segment focuses on the extraction and processing of iron ore, producing concentrates and pellets for both internal use and external sales.
The company is committed to innovation and sustainability, as evidenced by its ongoing projects. Ternium is currently constructing a state-of-the-art steel slab mill in Pesquería, Nuevo León, Mexico. This facility is designed to integrate with the existing downstream operations and includes advanced technologies for carbon capture and the potential to switch from natural gas to hydrogen for Direct Reduced Iron (DRI) production. This emphasis on sustainability extends to water use, with the new facility relying on industrially treated wastewater.
Financially, Ternium continues to perform robustly. Recent reports indicate substantial profitability despite market challenges. For example, in the second quarter of 2023, the company achieved an operating income of $731.7 million and an adjusted EBITDA of $882.6 million, driven by strategic pricing and cost management. Moreover, Ternium's acquisition of additional shares in Usiminas in July 2023 further solidified its market position, with consolidation expected to reflect positively on financial statements.
Ternium's strategic initiatives, such as the ongoing expansion of its facilities in Pesquería and its new port facility in Brownsville, Texas, underscore its commitment to enhancing production capacity and operational efficiency. These expansions are expected to support the growing steel demand in the USMCA region, driven by nearshoring and industrial growth in Mexico.
The company also places a significant emphasis on community development and educational programs, reflecting its broader commitment to social responsibility. For investors, Ternium represents a stable and growth-oriented opportunity in the steel industry, marked by its strategic expansions, robust market presence, and commitment to sustainability.
Ternium S.A. (NYSE:TX) faces a legal setback as the Brazilian Superior Court of Justice (SCJ) rejected a motion filed by Ternium subsidiaries and Tenaris's Confab to reverse a June 2024 decision. The court ordered the T/T Group to pay indemnification to Companhia Siderúrgica Nacional (CSN) regarding their 2012 Usiminas acquisition.
The SCJ modified the monetary adjustment mechanism and capped attorney's fees, reducing the potential payment. Ternium Investments could face approximately BRL1.9 billion ($307 million) in payments, while Ternium Argentina could owe BRL0.7 billion ($109 million). Ternium maintains that CSN's claims are meritless and plans to pursue further appeals.
Ternium (NYSE:TX) reported its Q3 2024 results with Adjusted EBITDA of $368 million, reflecting relatively low margins despite strong shipment levels. The company achieved record-high sales volumes in Mexico, with increased shipments in Brazil and continued recovery in the Southern Region. However, steel revenue per ton decreased due to lower steel prices and reduced industrial contract prices in Mexico.
The company's net cash position decreased to $1.7 billion from $1.9 billion in the previous quarter. The board approved an interim dividend of $0.90 per ADS, payable on November 21, 2024. For Q4 2024, Ternium expects a slight sequential increase in adjusted EBITDA due to improved margins, despite anticipated lower shipments due to year-end seasonality.
Ternium S.A. (NYSE:TX) has released its Sustainability Report 2023, detailing the company's strategy, performance, risks, and governance across various sustainability topics. The report follows international standards set by the GRI, SASB, World Steel Association, and TCFD guidelines, while also aligning with the UN's Sustainable Development Goals.
A key highlight is Ternium's revised decarbonization target, which now includes:
- Incorporation of Scope 3 emissions
- Expanded boundary to include the hot-rolling process
- Adoption of the GHG Protocol methodology
The new target aims for a 15% reduction in emission intensity for hot-rolled steel by 2030, compared to a 2023 baseline, covering Scope 1, 2, and Scope 3 Categories 1 and 10. This update reflects Ternium's commitment to long-term sustainability and integrity in its operations.
Ternium S.A. (NYSE:TX) announced its Q2 and H1 2024 results. Adjusted EBITDA reached $545 million with a 12% margin, reflecting a weak pricing environment. The company recorded a $783 million provision for ongoing litigation related to Usiminas acquisition. Q2 2024 saw a net loss of $743 million, but Adjusted Net Income was $40 million. Ternium paid a $432 million dividend and maintained a net cash position of $1.9 billion. Steel shipments increased in Brazil and the Southern Region but decreased slightly in Mexico. The company expects a sequential decline in Q3 2024 Adjusted EBITDA due to reduced margins, partially offset by increased shipments.
Ternium (NYSE:TX) has been ordered by the Brazilian Superior Court of Justice (SCJ) to pay Companhia Siderúrgica Nacional (CSN) an indemnification linked to its 2012 acquisition of a stake in Usiminas. The case, which alleges that Ternium’s subsidiaries failed to launch a required tag-along tender offer, saw initial rulings in favor of Ternium. However, the SCJ reversed its decision on June 18, 2024, awarding CSN an indemnification that could total up to BRL3.2 billion (approx. $0.6 billion) from Ternium Investments and BRL1.1 billion (approx. $0.2 billion) from Ternium Argentina. Despite these findings, Ternium maintains that the claims lack merit and plans to appeal the decision.
Ternium S.A. (NYSE:TX) shareholders approved all resolutions at the annual general meeting held on April 30, 2024. This included the approval of financial statements for the year ended December 31, 2023, and a proposed annual dividend of $0.33 per share ($3.30 per ADS). The meeting also re-elected current board members and appointed auditors for the fiscal year ending December 31, 2024. Mr. Paolo Rocca was re-appointed as chairman, Mr. Daniel Agustín Novegil as vice-chairman, and Mr. Máximo Vedoya as chief executive officer.
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