Ternium Announces Second Quarter and First Half of 2024 Results

Rhea-AI Summary

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.

Positive

• Strong cash provided by operating activities of $656 million
• Maintained solid financial position with net cash of $1.9 billion
• Continued growth in automotive industry demand in Mexico
• Gradual recovery in Argentine market
• Progress in expansion programs in Mexico and new wind farm in Argentina

Negative

• $783 million provision for ongoing litigation related to Usiminas acquisition
• Net loss of $743 million in Q2 2024
• Decrease in realized steel prices in main markets
• Slight increase in costs
• Expected sequential decline in Q3 2024 Adjusted EBITDA

Financial Analyst

Ternium's Q2 2024 results present a mixed picture. The company's Adjusted EBITDA reached $545 million, with an Adjusted EBITDA Margin of 12%. However, this represents a sequential decrease, primarily due to lower realized steel prices and a slight increase in costs.

A significant concern is the $783 million provision for ongoing litigation related to the 2012 Usiminas acquisition. This led to a net loss of $743 million for the quarter. Excluding this provision, Adjusted Net Income was $40 million, including a deferred tax loss of $183 million.

On a positive note, Ternium maintains a strong financial position with a net cash position of $1.9 billion. The company generated robust cash from operations of $656 million, which helped offset significant capital expenditures of $409 million and a dividend payment of $432 million.

Looking ahead, Ternium expects a sequential decline in Adjusted EBITDA for Q3 2024, primarily due to reduced margins. However, this may be partially offset by increased shipments across key markets. The company's outlook suggests challenges in pricing but potential growth in demand, particularly in Mexico's automotive and construction sectors.

Steel Industry Expert

Ternium's Q2 2024 results reflect the challenging conditions in the global steel market. The weak pricing environment in Ternium's main steel markets has significantly impacted the company's performance. This is evident in the sequential decrease in steel segment net sales and the decline in steel revenue per ton.

In Mexico, a key market for Ternium, we see a mixed picture. The automotive industry continues to show strength, but this is offset by softness in home appliances and HVAC sectors. The commercial steel market remains affected by the downward trend in steel prices. This divergence in sector performance highlights the importance of Ternium's diversified customer base.

Brazil presents an interesting scenario. While there's a pick-up in steel demand, particularly in the automotive and industrial sectors, high steel imports remain a concern. The recent establishment of a quota system to regulate steel imports hasn't yet had a significant impact, as imports remained elevated in Q2.

The Southern Region, particularly Argentina, shows signs of gradual recovery. However, the pace of this recovery remains uncertain, underscoring the volatile nature of emerging markets.

Looking forward, Ternium's outlook for Q3 2024 suggests continued challenges, with an expected drop in realized steel prices. However, the potential increase in shipments across key markets could provide some counterbalance. The company's focus on high-value sectors like automotive and its strategic investments in expansion programs could help navigate these challenging market conditions.

Market Research Analyst

Ternium's Q2 2024 results offer valuable insights into broader market trends. The company's performance reflects the complex interplay of global economic factors affecting the steel industry.

In Mexico, we see the impact of nearshoring activities driving growth in the construction sector. This trend, fueled by geopolitical shifts and supply chain reconfiguration, could provide a sustained boost to steel demand in the region. The continued growth in the automotive industry also aligns with global trends of recovery in this sector.

The Brazilian market presents a dichotomy. While domestic demand is improving, particularly in automotive and industrial sectors, the high level of steel imports suggests ongoing global overcapacity issues. This highlights the challenges faced by domestic producers in competitive global markets.

The volatility in iron ore prices, reaching both 12-month peaks and near-lows in the first half of 2024, underscores the unpredictability in raw material markets. This volatility can significantly impact steel producers' margins and requires adept management of input costs.

Ternium's substantial capital expenditures, including investments in new facilities and renewable energy, reflect a long-term strategic focus on efficiency and sustainability. This approach aligns with global trends towards greener steel production and could position the company favorably in an increasingly environmentally conscious market.

The company's cautious outlook for Q3, expecting lower margins but increased shipments, suggests a volume-over-price strategy in response to current market conditions. This approach could help maintain market share but may pressure profitability in the short term.

LUXEMBOURG / ACCESSWIRE / July 30, 2024 / Ternium S.A. (NYSE:TX) today announced its results for the second quarter and first half ended June 30, 2024.

The financial and operational information contained in this press release is based on Ternium S.A.'s operational data and consolidated condensed interim financial statements prepared in accordance with IAS 34 "Interim financial reporting" (IFRS) and presented in US dollars ($) and metric tons. Interim financial figures are unaudited. This press release includes certain non-IFRS alternative performance measures such as Adjusted EBITDA, Cash Operating Income, Net Cash, Free Cash Flow, Adjusted Net Income, Adjusted Equity Holders' Net Income and Adjusted Earnings per ADS. The reconciliation of these figures to the most directly comparable IFRS measures is included in Exhibit I.

Second Quarter of 2024 Highlights

Summary of Second Quarter of 2024 Results

¹ American Depositary Share. Each ADS represents 10 shares of Ternium's common stock. Results are based on a weighted average number of shares of common stock outstanding (net of treasury shares) of 1,963,076,776.

Second Quarter of 2024 Highlights

Ternium's Adjusted EBITDA reached $545 million in the period on Adjusted EBITDA Margin of 12%, with a relatively weak pricing environment in Ternium's main steel markets. Adjusted EBITDA decreased sequentially in the second quarter mainly reflecting lower realized steel prices and a slight increase in costs, as steel shipments remained relatively stable.

The company recorded in the second quarter of 2024 a $783 million provision for ongoing litigation related to the acquisition of a participation in Usiminas in 2012 as a result of an adverse Brazilian court decision issued in June 2024. Ternium believes that such decision is contrary to applicable substantive and procedural law; consequently, it plans to vigorously defend its position, which has been confirmed by a long line of precedents and court decisions, and file all motions and appeals available to it. For more information, see note 13(i) "Tax claims and other contingencies - Provision for ongoing litigation in process related to the acquisition of a participation in Usiminas" included in the company's Consolidated Condensed Interim Financial Statements as of June 30, 2024.

In the second quarter of 2024, Ternium had a net loss of $743 million. Net of the aforementioned provision, Adjusted Net Income in the second quarter was $40 million, including a deferred tax loss for an amount of $183 million.

In May 2024, Ternium paid a dividend of $432 million to the company's shareholders, corresponding to the remaining of the total dividend declared for the year 2023. Capital expenditures in the period amounted to $409 million as Ternium progressed with its expansion programs in Mexico and with its new wind farm in Argentina. Despite this demanding capital allocation, net cash position as of the end of June 2024 was $1.9 billion, a slight decrease compared to net cash position of $2.0 billion as of the end of March. Strong cash provided by operating activities of $656 million and a $160 million increase in the fair value of financial instruments contributed to maintain Ternium's solid financial position as of the end of the second quarter.

Steel shipments in the second quarter of 2024 increased in Brazil and the Southern Region. Such increases, however, were offset by a slight decrease in sales volumes in Mexico and lower shipments in Other Markets.

In Mexico, steel demand from automotive manufacturers continued growing during the second quarter, reflecting the positive momentum of this industry. On the other hand, activity in the Mexican commercial steel market was negatively affected by a downward trend in steel prices. Furthermore, customer demand in the home appliances and HVAC sectors softened in the period, reflecting a relatively sluggish construction market in North America in a context of high interest rates.

In Brazil, there was a pick-up in steel demand in the second quarter, particularly in the automotive and industrial sectors. However, imports of steel products remained high, with a significant year-over-year expansion in the first half of 2024.

In the Southern Region, steel demand in the second quarter reflected improving conditions in the Argentine market, as industrial customer demand and the commercial market showed a gradual recovery.

Outlook

Ternium expects a sequential decline in adjusted EBITDA for the third quarter of 2024, primarily attributed to reduced margins partially offset by an increase in shipments across key markets. The company anticipates a drop in realized steel prices, largely as a result of the reset of quarterly and six-months contract prices in Mexico.

The company expects consistent demand in Mexico's industrial and commercial markets, with supply chain stocks at manageable levels. The automotive industry continues to grow and the construction sector is enjoying an upswing in investment from nearshoring activities, leading to the establishment of new factories and a growing need for warehousing and logistics facilities.

In Brazil, Ternium anticipates a modest rise in shipments, supported by the automotive industry's projected growth and better activity in the construction sector. On the other hand, despite the recent establishment of a quota system to regulate steel imports in the country, imports during the second quarter remained elevated.

In Argentina, Ternium expects shipments to increase in the third quarter of 2024 after a destocking process in the second quarter, although the pace of the recovery remains uncertain.

Analysis of Second Quarter of 2024 Results

Consolidated Net Sales

Note: other products include mainly electricity sales in Mexico and Brazil.

Adjusted EBITDA

Adjusted EBITDA in the second quarter of 2024 equals Net Income adjusted to exclude:

• Income Tax Results;

• Net Financial Results;

• Depreciation and Amortization;

• Equity in Results of Non-consolidated Companies;

• Provision for ongoing litigation related to the acquisition of a participation in Usiminas in 2012; and

• Reversal of other Usiminas contingencies recognized as part of the PPA.

And adjusted to include the proportional EBITDA in Unigal (70% participation).

Adjusted EBITDA Margin equals Adjusted EBITDA divided by net sales. For more information see Exhibit I - Alternative performance measures - "Adjusted EBITDA".

Steel Segment

The Steel Segment net sales were down sequentially in the second quarter of 2024, mostly as a result of decreasing realized steel prices in Ternium's main steel markets. On a year-over-year basis, the consolidation of Usiminas added $1.1 billion to steel segment net sales and 1.0 million tons to steel product shipments.

Steel products shipments in Mexico were slightly down sequentially in the second quarter, as the strength of Mexican automotive industry was offset by soft demand in the home appliances and HVAC sectors. In addition, the company's value chain was subject to disruptions caused by a tropical storm in June. Activity in Mexican commercial market remained affected by a downward trend in steel prices.

In Brazil, shipments in the second quarter reflected a widespread pick-up in steel demand. On a year-over-year basis, sales volumes increased 0.9 million tons due to the consolidation of Usiminas.

In the Southern Region, steel shipments in the quarter showed certain sequential recovery mainly as a result of a gradual improvement in the Argentine market.

Steel revenue per ton in the second quarter of 2024 decreased sequentially and on a year-over-year basis, reflecting a weak pricing environment in Ternium's main steel markets. Particularly in North America, reference spot prices for hot-rolled flat products decreased to levels close to the lowest recorded in the last 12 months.

Cash Operating Income equals Operating Income adjusted to exclude depreciation and amortization as well as certain other non-cash and/or non-recurring items. The steel segment's Cash Operating Income per Ton and Margin equal the steel segment's Cash Operating Income divided by Steel Segment's Shipments and Net Sales, respectively. For more information see Exhibit I - Alternative performance measures - "Cash Operating Income - Steel Segment".

Ternium recorded sequentially lower steel segment Cash Operating Income per Ton and Margin in the second quarter of 2024. Reported ratios were negatively impacted by a decrease in realized steel prices in Ternium's main steel markets. In addition, cost per ton in the second quarter increased slightly compared to cost per ton in the prior quarter.

Mining Segment

Ternium reports intercompany and third-party sales of mining products under the Mining segment. The Mining Segment net sales in the second quarter of 2024 remained relatively stable sequentially.

On a year-over-year basis, the consolidation of Usiminas added 2.0 million tons to mining products shipments in the second quarter and $161 million to net sales of mining products.

Mining revenue per ton in the second quarter of 2024 remained stable sequentially, as higher realized iron ore prices were offset by a lower participation of higher-priced pellets in the sales mix. Iron ore price volatility remained high in the first half of 2024, with reference prices reaching a 12-month peak early in January and then falling to near the lowest level recorded in the last 12 months.

Cash Operating Income equals Operating Income adjusted to exclude depreciation and amortization as well as certain other non-cash and/or non-recurring items. The mining segment Cash Operating Income per Ton and Cash Operating Income Margin equal the mining segment's Cash Operating Income divided by its Shipments and Net Sales, respectively. For more information see Exhibit I - Alternative performance measures - "Cash Operating Income - Mining Segment".

The mining segment's Cash Operating Income per Ton and Margin increased sequentially in the second quarter of 2024, mainly as result of higher iron ore prices partially offset by a lower participation of higher-margin iron ore pellets in the sales mix.

Net Financial Results

In the second quarter of 2024, net foreign exchange results were a loss of $49 million, mainly reflecting the negative effect of the depreciation of the Brazilian Real vis-a-vis the US dollar on Usiminas' US dollar denominated debt. Usiminas uses the Brazilian Real as functional currency.

$ MILLION			2Q24				1Q24				2Q23				1H24				1H23
Net interest results			29				38				24				66				50
Net foreign exchange result			(49	)			(41	)			(25	)			(90	)			(40	)
Change in fair value of financial assets			(5	)			(137	)			(14	)			(142	)			(10	)
Other financial expense, net			(13	)			(23	)			(4	)			(36	)			(10	)
Net financial results			(39	)			(163	)			(18	)			(201	)			(10	)

Income Tax Results

Ternium Mexico, Ternium Argentina and Ternium Brasil use the US dollar as their functional currency and are, therefore, affected by deferred tax results. These results account for the impact of local currency fluctuations against the US dollar, as well as for the effect of local inflation. Effective tax rates in the second quarter and first half of 2024 included, in addition, the effect of a $783 million provision for ongoing litigation related to the acquisition of a participation in Usiminas.

$ MILLION			2Q24				1Q24				2Q23				1H24				1H23
Current income tax expense			(124	)			(126	)			(148	)			(250	)			(286	)
Deferred tax (loss) gain			(183	)			86				143				(97	)			361
Income tax expense			(307	)			(40	)			(5	)			(347	)			74
Result before income tax			(436	)			532				741				96				1,141
Effective tax rate			-70	%			8	%			1	%			363	%			-7	%
Excluding $783 million provision for ongoing litigation related to the acquisition of a participation in Usiminas in 2012:
Result before income tax excluding provision			347				532				741				879				1,141
Effective tax rate excluding provision			88	%			8	%			1	%			40	%			-7	%

Net Income

In the second quarter of 2024, Adjusted Net Income equaled the period's Net Loss adjusted to exclude a $783 million provision for ongoing litigation related to the acquisition of a participation in Usiminas. In the third quarter of 2023, Adjusted Net Income equaled the period's Net Loss adjusted to exclude a loss of $1.1 billion in connection with an increase in the participation in Usiminas in such quarter. Adjusted Earnings (Losses) per ADS equaled each period's Adjusted Equity Holders' Net Result divided by 1,963 million outstanding shares of Ternium's common stock, net of treasury shares, expressed in ADS equivalent (each ADS represents 10 shares).

Net Loss and Adjusted Net Income in the second quarter of 2024 included a deferred tax loss of $183 million.

$ MILLION			2Q24				1Q24				2Q23				1H24				1H23
Owners of the parent			(728	)			361				627				(366	)			1,001
Non-controlling interest			(16	)			130				109				114				214
Net Income (Loss)			(743	)			491				736				(252	)			1,215
Excluding provision for ongoing litigation related to acquisiton of Usiminas participation			(783	)			-				-				(783	)			-
Adjusted Net Income			40				491				736				531				1,215

Cash Flow and Liquidity

Cash from operations reached $656 million in the second quarter of 2024, including a $169 million decrease in working capital. Of note in the working capital reduction were a $117 million net decrease in trade and other receivables and a $64 million net increase in trade payables and other liabilities.

Capital expenditures amounted to $409 million in the period. Among other initiatives, Ternium made progress in the construction of new facilities in its Pesquería industrial center, where the company has recently inaugurated a new push-pull pickling line, and in the construction of a new wind farm in Argentina.

Ternium's net cash position decreased slightly in the second quarter, to $1.9 billion as of June 30, 2024.

During the period, Ternium paid a dividend to shareholders of $432 million, corresponding to the remaining of the dividend declared for the year 2023, for a total of $648 million.

In the second quarter, cash used in Ternium's capital expenditures program and for the dividend payment was largely offset mainly by cash provided by operating activities and a $160 million increase in the fair value of financial instruments.

Conference Call and Webcast

Ternium will host a conference call on July 31, 2024, at 8:30 a.m. ET in which management will discuss second quarter of 2024 results. A webcast link will be available in the Investor Center section of the company's website at www.ternium.com.

Forward Looking Statements

Some of the statements contained in this press release are "forward-looking statements". Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to gross domestic product, related market demand, global production capacity, tariffs, cyclicality in the industries that purchase steel products, and other factors beyond Ternium's control.

About Ternium

Ternium is a leading steel producer in the Americas, providing advanced steel products to a wide range of manufacturing industries and the construction sector. We invest in low carbon emissions steelmaking technologies to support the energy transition and the mobility of the future. We also support the development of our communities, especially through educational programs in Latin America. More information about Ternium is available at www.ternium.com.

Income Statement

$ MILLION			2Q24			1Q24			2Q23			1H24			1H23
Net sales			4,514			4,778			3,871			9,292			7,495
Cost of sales			(3,758			(3,675			(2,839			(7,432	)		(5,820
Gross profit			757			1,104			1,032			1,860			1,674
Selling, general and administrative expenses			(435	)		(431	)		(304	)		(866	)		(597	)
Other operating income			49			2			4			51			12
Operating income			371			675			732			1,045			1,089
Financial expense			(45	)		(45	)		(18	)		(90	)		(34	)
Financial income			73			83			42			156			83
Other financial (expense) income, net			(67	)		(200	)		(42	)		(267			(60	)
Equity in earnings of non-consolidated companies			15			20			27			34			62
Provision for ongoing litigation related to the acquisition of a participation in Usiminas			(783	)		-			-			(783	)		-
Profit (Loss) before income tax results			(436			532			741			96			1,141
Income tax (expense) credit			(307	)		(40	)		(5	)		(347	)		74
Profit (Loss) for the period			(743	)		491			736			(252	)		1,215
Attributable to:
Owners of the parent			(728			361			627			(366	)		1,001
Non-controlling interest			(16	)		130			109			114			214
Net (Loss) Profit for the period			(743			491			736			(252	)		1,215

Statement of Financial Position

$ MILLION		JUNE 30, 2024				DECEMBER 31, 2023
Property, plant and equipment, net			7,911				7,638
Intangible assets, net			1,050				996
Investments in non-consolidated companies			497				517
Other investments			31				211
Deferred tax assets			1,389				1,713
Receivables, net			943				1,073
Total non-current assets			11,822				12,149
Receivables, net			969				1,173
Derivative financial instruments			7				15
Inventories, net			5,048				4,948
Trade receivables, net			1,973				2,065
Other investments			2,117				1,976
Cash and cash equivalents			1,719				1,846
Total current assets			11,833				12,024
Non-current assets classified as held for sale			8				7
Total assets			23,663				24,179

Statement of Financial Position (cont.)

$ MILLION		JUNE 30, 2024				DECEMBER 31, 2023
Capital and reserves attributable to the owners of the parent			11,881				12,419
Non-controlling interest			4,274				4,393
Total equity			16,155				16,812
Provisions			637				840
Deferred tax liabilities			30				171
Other liabilities			1,102				1,149
Trade payables			6				12
Lease liabilities			177				189
Borrowings			1,232				1,206
Total non-current liabilities			3,183				3,567
Provision for ongoing litigation related to the acquisition of a participation in Usiminas			783				-
Current income tax liabilities			38				137
Other liabilities			444				430
Trade payables			2,250				2,233
Derivative financial instruments			7				8
Lease liabilities			50				52
Borrowings			752				940
Total current liabilities			4,324				3,801
Total liabilities			7,508				7,367
Total equity and liabilities			23,663				24,179

Statement of Cash Flows

$ MILLION		2Q24			1Q24			2Q23			1H24			1H23
Result for the period		(743	)		491			736			(252	)		1,215
Adjustments for:
Depreciation and amortization		199			171			151			370			301
Income tax accruals less payments		283			(13	)		(117	)		271			(273	)
Equity in earnings of non-consolidated companies		(15	)		(20	)		(27	)		(34	)		(62	)
Provision for ongoing litigation related to the acquisition of a participation in Usiminas		783			-			-			783			-
Interest accruals less payments/receipts, net		(11	)		(2	)		6			(12	)		(12	)
Changes in provisions		(62	)		(7	)		1			(69	)		-
Changes in working capital		169			(266			(605	)		(97	)		(387	)
Net foreign exchange results and others		52			120			(18	)		172			(19	)
Net cash provided by operating activities		656			475			127			1,132			763
Capital expenditures and advances to suppliers for PP&E		(409			(449	)		(231	)		(858			(434	)
Decrease (increase) in other investments		329			-			173			329			(513	)
Proceeds from the sale of property, plant & equipment		1			1			-			1			1
Dividends received from non-consolidated companies		1			1			15			2			15
Net cash used in investing activities		(79	)		(447	)		(42	)		(526	)		(931	)
Dividends paid in cash to company's shareholders		(432	)		-			(353	)		(432	)		(353	)
Dividends paid in cash to non-controlling interest		(46	)		-			-			(46	)		-
Finance lease payments		(15	)		(18	)		(13	)		(33	)		(27	)
Proceeds from borrowings		303			131			27			434			73
Repayments of borrowings		(365	)		(166	)		(31	)		(531	)		(227	)
Net cash used in financing activities		(556	)		(53	)		(371	)		(608	)		(535	)
Increase (Decrease) in cash and cash equivalents		22			(24	)		(286	)		(2	)		(703	)

Exhibit I - Alternative performance measures

These non-IFRS measures should not be considered in isolation of, or as a substitute for, measures of performance prepared in accordance with IFRS. These non-IFRS measures do not have a standardized meaning under IFRS and, therefore, may not correspond to similar non-IFRS financial measures reported by other companies.

Adjusted EBITDA

$ MILLION		2Q24			1Q24			2Q23			1H24			1H23
Net result		(743	)		491			736			(252	)		1,215
Adjusted to exclude:
Depreciation and amortization		199			171			151			370			301
Income tax results		307			40			5			347			(74	)
Net financial result		39			163			18			201			10
Equity in earnings of non-consolidated companies		(15	)		(20	)		(27	)		(34	)		(62	)
Provision for ongoing litigation related to the acquisition of a participation in Usiminas		783			-			-			783			-
Reversal of other Usiminas contingencies recognized as part of the PPA		(34	)		-			-			(34	)		-
Adjusted to include:
Proportional EBITDA in Unigal (70% participation)		9			9			-			18			-
Adjusted EBITDA		545			855			883			1,400			1,391
Divided by: net sales		4,514			4,778			3,871			9,292			7,495
Adjusted EBITDA Margin (%)		12	%		18	%		23	%		15	%		19	%

Exhibit I - Alternative performance measures (cont.)

Cash Operating Income - Steel Segment

$ MILLION			2Q24			1Q24			2Q23			1H24			1H23
Operating Income - Management View (Note "Segment Information" to Ternium's Financial Statements as of the corresponding dates)			278			593			597			871			1,117
Plus/Minus differences in cost of sales (IFRS)			88			59			144			147			5
Excluding depreciation and amortization			134			137			126			271			253
Excluding reversal of other Usiminas contingencies			(34	)		-			-			(34	)		-
Including proportional EBITDA in Unigal (70% participation)			9			9			-			18			-
Cash Operating Income			476			798			867			1,274			1,374
Divided by steel shipments (thousand tons)			3,841			3,894			2,982			7,735			6,048
Cash Operating Income per Ton - Steel			124			205			291			165			227
Divided by steel net sales			4,395			4,690			3,871			9,085			7,495
Cash Operating Income Margin - Steel (%)			12	%		17	%		22	%		14	%		18	%

Cash Operating Income - Mining Segment

$ MILLION			2Q24			1Q24			2Q23			1H24			1H23
Operating Income - Management View (Note "Segment Information" to Ternium's Financial Statements as of the corresponding dates)			(52	)		(22	)		(25	)		(74	)		(31	)
Plus/minus differences in cost of sales (IFRS)			61			54			10			115			(6	)
Excluding depreciation and amortization			65			34			25			99			49
Cash Operating Income			74			66			9			140			12
Divided by mining shipments (thousand tons)			2,674			2,695			867			5,369			1,667
Cash Operating Income per Ton - Mining			28			25			10			26			7
Divided by mining net sales			271			274			110			546			195
Cash Operating Income Margin - Mining (%)			27	%		24	%		8	%		26	%		6	%

Exhibit I - Alternative performance measures (cont.)

Adjusted Net Result

$ MILLION			2Q24				3Q23
Net loss			(743	)			(783	)
Excluding non-cash effects related to the increase in the participation in Usiminas			-				(1,106	)
Excluding provision for ongoing litigation related to the acquisiton of a participation in Usiminas			(783	)			-
Adjusted Net Result			40				323

Adjusted Equity Holders' Net Result and Adjusted Earnings (Losses) per ADS

$ MILLION			2Q24				3Q23
Equity holders' net loss			(728	)			(739	)
Excluding non-cash effects related to the increase in the participation in Usiminas			-				(1,010	)
Excluding provision for ongoing litigation related to the acquisiton of a participation in Usiminas			(706	)			-
Adjusted Equity Holders' Net Result			(21	)			271
Divided by: outstanding shares of common stock, net of treasury shares (expressed in million of ADS equivalent)			196				196
Adjusted Earnings (Losses) per ADS ($)			(0.11	)			1.38

Free Cash Flow

$ MILLION			2Q24			1Q24			2Q23			1H24			1H23
Net cash provided by operating activities			656			475			127			1,132			763
Excluding capital expenditures and advances to suppliers for PP&E			(409	)		(449	)		(231	)		(858	)		(434	)
Free cash flow			248			26			(104	)		274			329

Note: Free Cash Flow in the comparative quarters in 2023 has been modified due to a reclassification, moving the following amounts from interest accruals less payments to other investments: $46 million in the second quarter of 2023 and $64 million in the first half of 2023.

Exhibit I - Alternative performance measures (cont.)

Net Cash Position

$ BILLION		JUN 30, 2024				MAR 31, 2024				DEC 31, 2023
Cash and cash equivalents2			1.7				1.8				1.8
Plus: other investments (current and non-current)2			2.1				2.3				2.2
Less: borrowings (current and non-current)			(2.0	)			(2.1	)			(2.1	)
Net cash position			1.9				2.0				1.9

² Ternium Argentina's consolidated position of cash and cash equivalents and other investments amounted to $1.3 billion and $1.2 billion as of June 30 and March 31, 2024, respectively, and $1.1 billion as of December 31, 2023.

Sebastián Martí
Ternium - Investor Relations
+1 (866) 890 0443
+54 (11) 4018 8389
www.ternium.com

SOURCE: Ternium S.A.

View the original press release on accesswire.com

FAQ

What was Ternium's (TX) Adjusted EBITDA for Q2 2024?

Ternium's Adjusted EBITDA for Q2 2024 reached $545 million with a 12% margin.

How much was the provision recorded by Ternium (TX) for the Usiminas litigation in Q2 2024?

Ternium recorded a $783 million provision for ongoing litigation related to the acquisition of a participation in Usiminas in 2012.

What was Ternium's (TX) net cash position as of June 30, 2024?

Ternium's net cash position was $1.9 billion as of June 30, 2024.

How much dividend did Ternium (TX) pay in Q2 2024?

Ternium paid a dividend of $432 million to shareholders in Q2 2024.

What is Ternium's (TX) outlook for Q3 2024?

Ternium expects a sequential decline in Adjusted EBITDA for Q3 2024, primarily due to reduced margins partially offset by an increase in shipments across key markets.