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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) reported its first-quarter results for 2023, revealing steel shipments of 3.1 million tons, a 1% increase from the prior quarter and a 4% increase year-over-year. Net sales reached $3.6 billion, up 2% sequentially, but down 16% from the same quarter last year. Operating income surged to $357 million, reflecting a 730% increase from the previous quarter, while Adjusted EBITDA was $508 million, a 68% rise quarter-over-quarter. The company reported a net income of $480 million, with earnings per ADS of $1.91. Ternium's cash position at the end of March 2023 was $3.0 billion. A dividend of approximately $624 million was approved, payable in U.S. dollar-denominated Argentine bonds. The outlook for the second quarter projects increased EBITDA driven by higher steel shipments and anticipated pricing improvements.
The global market for Electric Resistance Welded (ERW) Pipes and Tubes is projected to grow from 67.6 million tons in 2022 to 107.2 million tons by 2030, at a CAGR of 5.9%. The U.S. market is estimated at 5.8 million tons, while China is forecast to reach 35.2 million tons, growing at 6.5% CAGR. The report highlights a readjusted growth in the Line Pipes segment at 6.2% CAGR due to post-pandemic recovery. Notable geographic markets include Japan and Canada, with growth rates of 4.6% and 5.5% respectively. The report also details market drivers including the demand for high-quality line pipes amidst tough operating environments and the impact of global events such as the Russia-Ukraine conflict on supply chains.
Ternium S.A. (NYSE:TX) filed its annual report on Form 20-F for the year ended December 31, 2022, with the U.S. Securities and Exchange Commission (SEC) on March 30, 2023. The report is available for download from both the SEC and Ternium's website, along with options to request a hard copy for free. As Latin America's leading flat steel producer, Ternium operates in various regions including Mexico, Brazil, and the southern United States, providing high value-added steel products for multiple industries. The report includes forward-looking statements with associated risks such as market demand and global production capacity.
Ternium S.A. (NYSE:TX) announced the acquisition of 68.7 million ordinary shares of Usinas Siderúrgicas de Minas Gerais S.A. (Usiminas) from the NSC group for BRL10 per share. Ternium will invest approximately $111.0 million for 57.7 million shares, raising its control group participation to 51.5%. This transaction, pending approval from Brazil's antitrust authorities, will enhance governance, allowing the T/T group to nominate a majority of Usiminas' board members. Additionally, the T/T group can buy the NSC group's remaining shares after the second year. Ternium aims to improve Usiminas' competitiveness and stakeholder value.
Ternium S.A. (NYSE:TX) has announced its annual general meeting of shareholders scheduled for May 2, 2023, at 2:00 p.m. CET. Shareholders holding American Depositary Shares (ADSs) as of March 27, 2023 can direct The Bank of New York Mellon regarding their voting rights. Key documents, including the meeting agenda, proxy statement, and the 2022 Annual Report, which details consolidated financial statements and management reports, are accessible on Ternium's website. This meeting provides an opportunity for shareholders to engage with the company's future direction and strategies.
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