Ternium Announces Third Quarter and First Nine Months of 2023 Results

LUXEMBOURG / ACCESSWIRE / October 31, 2023 / Ternium S.A. (NYSE:TX) today announced its results for the third quarter and first nine months ended September 30, 2023.

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 Net Result, Adjusted Equity Holders' Net Result, Adjusted Earnings per ADS, Adjusted EBITDA, Net Cash and Free Cash Flow. The reconciliation of these figures to the most directly comparable IFRS measures is included in Exhibit I.

Third Quarter of 2023 Highlights

Foto: Accesswire

 

 

 

 

 

 

 

 

 

Summary of Third Quarter of 2023 Results

CONSOLIDATED

 

3Q23

 

 

2Q23

 

DIF

 

 

3Q22

 

DIF

 

 

9M23

 

 

9M22

 

DIF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel Shipments (thousand tons)

 

4,131

 

 

2,982

 

 

39

%

 

2,967

 

 

39

%

 

10,179

 

 

8,876

 

 

15

%

Mining Shipments (thousand tons)

 

2,176

 

 

-

 

 

 

 

 

-

 

 

 

 

 

2,176

 

 

-

 

 

 

 

Net Sales ($ million)

 

5,185

 

 

3,871

 

 

34

%

 

4,125

 

 

26

%

 

12,679

 

 

12,868

 

 

-1

%

Operating Income ($ million)

 

527

 

 

732

 

 

-28

%

 

526

 

 

0

%

 

1,616

 

 

2,656

 

 

-39

%

Adjusted EBITDA ($ million)

 

698

 

 

883

 

 

-22

%

 

679

 

 

2

%

 

2,089

 

 

3,112

 

 

-33

%

Adjusted EBITDA Margin (% of net sales)

 

13

%

 

23

%

 

 

 

 

16

%

 

 

 

 

16

%

 

24

%

 

 

 

Net (Loss) Income ($ million)

 

(783

)

 

736

 

 

 

 

 

220

 

 

 

 

 

433

 

 

2,034

 

 

 

 

Equity Holders' Net (Loss) Income ($ million)

 

(739

)

 

627

 

 

 

 

 

153

 

 

 

 

 

262

 

 

1,728

 

 

 

 

(Losses) Earnings per ADS 1 ($)

 

(3.77

)

 

3.19

 

 

 

 

 

0.78

 

 

 

 

 

1.34

 

 

8.80

 

 

 

 

Adjusted Net Income ($ million)

 

323

 

 

736

 

 

 

 

 

220

 

 

 

 

 

1,539

 

 

2,034

 

 

 

 

Adjusted Equity Holders' Net Income ($ million)

 

271

 

 

627

 

 

 

 

 

153

 

 

 

 

 

1,272

 

 

1,728

 

 

 

 

Adjusted Earnings per ADS 1 ($)

 

1.38

 

 

3.19

 

 

 

 

 

0.78

 

 

 

 

 

6.48

 

 

8.80

 

 

 

 

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.

Net sales and shipments

Net sales were $1.3 billion higher sequentially in the third quarter of 2023, mainly as a result of an increase of $1.2 billion from the consolidation of Usiminas' sales.

In Mexico, volumes increased sequentially in the third quarter, driven mainly by higher shipments to commercial customers and increased demand from the country's automotive industry. On the other hand, revenue per ton decreased in this region reflecting lower market steel prices, partially offset by higher industrial contract prices.

As a result of the consolidation of Usiminas, steel shipments in Brazil increased 1.0 million tons sequentially in the third quarter. Shipments to industrial customers account for approximately 70% of total steel shipments in the country, with a significant participation of the Brazilian automotive sector.

In the Southern Region, Ternium's shipments increased 7% sequentially in the third quarter of 2023 mainly as a result of the consolidation of Usiminas shipments to this region. Revenue per ton in the period remained relatively unchanged compared to the prior quarter. In Argentina, steel demand from industrial and commercial customers in the third quarter was similar to that in the second quarter.

In Other Markets, the company's shipments increased 26% in the third quarter of 2023 compared with the second quarter, reflecting the consolidation of Usiminas shipments in this region and higher shipments in the US market.

Results and capital allocation

Ternium's adjusted EBITDA decreased 22% sequentially in the third quarter of 2023 mainly due to the negative impact of lower steel prices in the USMCA region and higher cost of purchased slabs, partially offset by higher shipments in Mexico and Other Markets. Adjusted EBITDA margin in the period was affected by these variables, as well as by the consolidation of Usiminas' operating results, which recorded a very low level of profitability in the quarter.

Capital expenditures increased in the third quarter mainly due to the consolidation of Usiminas. The main projects carried out during the period were those for the relining of blast furnace #3 in the Ipatinga facilities and the construction of new downstream facilities in the Pesquería facilities.

During the period, Ternium acquired additional shares of Usiminas and announced an interim dividend payable to the company's shareholders on November 16, 2023.

Effects of the increase in the participation in Usiminas

On July 3, 2023, Ternium acquired an additional stake in Usiminas of 57.7 million ordinary shares, increasing its participation in the Usiminas control group to 51.5% and its economic participation to 23.3%. In addition, the Usiminas shareholders agreement was updated to reflect a new governance structure. Pursuant to the updated agreement, Ternium started to fully consolidate Usiminas balance sheet and results of operations. The increase in the participation in Usiminas resulted in a $1.1 billion non-cash net loss and a net $171 reduction in the value of Ternium's Equity.

Non-cash $935 million loss mainly due to the recycling of Currency Translation Adjustment (CTA) from Other Comprehensive Income to Net Results

As of June 30, 2023, items recognized in Other Comprehensive Income related to Ternium's previous stake in Usiminas amounted to a loss of $935 million. This negative reserve was mainly related to CTA losses due to the impact on Usiminas valuation of the depreciation, over the years, of the Brazilian Real versus the U.S. dollar, as Usiminas uses the Brazilian Real as its functional currency.

As a result of the increase in the participation in Usiminas, items recognized in Other Comprehensive Income related to Ternium's previous stake in Usiminas were recycled to the results of the period. The resulting loss is non-cash, it has no income tax effects and did not change the value of Ternium's equity.

Remeasurement of Ternium's stake in Usiminas

As a result of the purchase price allocation related to the business combination performed in the third quarter of 2023 and the remeasurement of Ternium's previous stake in Usiminas, the company registered a net loss of $171 million.

Recognition of contingencies as part of the business combination

As part of the business combination Ternium recognized Usiminas' contingencies of $656 million related to tax, civil, labor and other issues that were defined as "of no probable occurrence". These contingencies are not recognized in Usiminas' standalone balance sheet.

Interim Dividend Payment

Ternium's board of directors approved the payment of an interim dividend for 2023 of $1.10 per ADS ($0.11 per share), or $216 million in the aggregate. The interim dividend will be paid on November 16, 2023 to shareholders on record as of November 13, 2023. This represents an increase of 20 cents per ADS, or 22%, compared to last year's interim dividend.

Outlook

Ternium expects fourth quarter adjusted EBITDA to decrease compared to the third quarter, with lower adjusted EBITDA margin partially offset by slightly higher steel shipments. The company anticipates a sequential decrease in steel revenue per ton in the fourth quarter, reflecting lower realized prices in Mexico and Brazil.

In Mexico, the company expects apparent steel consumption to remain strong in the fourth quarter. Industrial sectors are showing healthy steel demand. Similarly, the commercial market continues to be very active due to low inventory levels and a recent improvement in steel benchmark prices. However, Ternium anticipates realized prices in Mexico to sequentially decrease in the fourth quarter, due primarily to the delayed impact of quarterly contract prices resetting at lower levels than in the third quarter.

In Brazil, Ternium expects shipments to remain relatively stable in most market sectors. In addition, the company anticipates realized steel prices to decrease in the fourth quarter compared to the third quarter due to a recent decrease in prices of local steel finished products.

In Argentina, the company anticipates a sequential decrease in fourth quarter shipments due to seasonality and government-imposed restrictions on the importation of inputs required for production by the company and its value chain. The steel market also continues to be highly unpredictable, as it is unclear what government measures may be taken to address the country's ongoing macroeconomic challenges when a new administration takes office in December of 2023.

Analysis of Third Quarter of 2023 Results

Consolidated Steel Products Sales

Ternium reports its sales of steel products under the Steel and Usiminas segments. The consolidation of Usiminas resulted in a $1.2 billion sequential increase in net sales to third parties in the third quarter of 2023 (1.0 million tons). The Steel segment net sales remained relatively stable sequentially in the third quarter, as higher shipments of steel products were offset by a lower revenue per ton.

Particularly in Mexico, revenue per ton decreased sequentially in the third quarter reflecting lower market steel prices in the USMCA region, partially offset by higher industrial contract prices.

Foto: Accesswire

 

 

 

 

 

 

 

 

 

Ternium's steel shipments in Mexico achieved a new all-time high in the third quarter. Volumes to industrial customers continued growing supported by the company's new state-of-the-art facilities in Pesquería. In addition, shipments to commercial customers improved sequentially in the third quarter.

The consolidation of Usiminas' shipments led to a significant increase in reported steel volumes in Brazil and to a moderate increase in steel volumes in the Southern Region and Other Markets.

Foto: Accesswire

 

 

 

 

 

 

 

 

 

Mining Products Sales

Ternium reports intercompany and third-party sales of mining products under the Mining and Usiminas segments. The consolidation of Usiminas resulted in a $149 million sequential increase in net sales to third parties in the third quarter of 2023 (2.2 million tons).

Foto: Accesswire

 

 

 

 

 

 

 

 

 

CONSOLIDATED

NET SALES ($ MILLION)

 

SHIPMENTS (THOUSAND TONS)

 

REVENUE/TON ($/TON)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3Q23

 

 

2Q23

 

DIF

 

 

3Q23

 

 

2Q23

 

DIF

 

 

3Q23

 

 

2Q23

 

DIF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

2,383

 

 

2,457

 

 

-3

%

 

2,135

 

 

2,031

 

 

5

%

 

1,116

 

 

1,209

 

 

-8

%

Brazil

 

1,136

 

 

38

 

 

 

 

 

957

 

 

42

 

 

 

 

 

1,187

 

 

906

 

 

 

 

Southern Region

 

941

 

 

870

 

 

8

%

 

603

 

 

563

 

 

7

%

 

1,561

 

 

1,545

 

 

1

%

Other Markets

 

504

 

 

442

 

 

14

%

 

436

 

 

346

 

 

26

%

 

1,157

 

 

1,277

 

 

-9

%

Total steel products

 

4,964

 

 

3,806

 

 

30

%

 

4,131

 

 

2,982

 

 

39

%

 

1,202

 

 

1,276

 

 

-6

%

Mining products

 

149

 

 

-

 

 

 

 

 

2,176

 

 

-

 

 

 

 

 

68

 

 

 

 

 

 

 

Other products

 

72

 

 

65

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

5,185

 

 

3,871

 

 

34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED

NET SALES ($ MILLION)

 

SHIPMENTS (THOUSAND TONS)

 

REVENUE/TON ($/TON)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9M23

 

 

9M22

 

DIF

 

 

9M23

 

 

9M22

 

DIF

 

 

9M23

 

 

9M22

 

DIF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

7,046

 

 

6,874

 

 

3

%

 

6,233

 

 

4,970

 

 

25

%

 

1,130

 

 

1,383

 

 

-18

%

Brazil

 

1,216

 

 

467

 

 

161

%

 

1,063

 

 

541

 

 

96

%

 

1,144

 

 

862

 

 

33

%

Southern Region

 

2,664

 

 

2,883

 

 

-8

%

 

1,709

 

 

1,773

 

 

-4

%

 

1,559

 

 

1,626

 

 

-4

%

Other Markets

 

1,398

 

 

2,386

 

 

-41

%

 

1,174

 

 

1,592

 

 

-26

%

 

1,191

 

 

1,499

 

 

-21

%

Total steel products

 

12,324

 

 

12,610

 

 

-2

%

 

10,179

 

 

8,876

 

 

15

%

 

1,211

 

 

1,421

 

 

-15

%

Mining products

 

149

 

 

-

 

 

 

 

 

2,176

 

 

-

 

 

 

 

 

68

 

 

 

 

 

 

 

Other products

 

207

 

 

258

 

 

-20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

12,679

 

 

12,868

 

 

-1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Operating Income

The consolidation of Usiminas' financial statements did not add significant results at the operating income level in the third quarter of 2023.

The sequential decrease in Ternium's operating income in the third quarter was primarily due to lower steel prices in the USMCA region and higher purchased slab costs, partially offset by higher shipments in Mexico and Other Markets.

Foto: Accesswire

 

 

 

 

 

 

 

$ MILLION

 

3Q23

 

 

2Q23

 

DIF

 

 

3Q22

 

DIF

 

 

9M23

 

 

9M22

 

DIF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

527

 

 

732

 

 

-28

%

 

526

 

 

0

%

 

1,616

 

 

2,656

 

 

-39

%

Net sales

 

5,185

 

 

3,871

 

 

34

%

 

4,126

 

 

26

%

 

12,679

 

 

12,868

 

 

-1

%

Cost of sales

 

(4,192

)

 

(2,839

)

 

48

%

 

(3,325

)

 

26

%

 

(10,012

)

 

(9,368

)

 

7

%

SG&A expenses

 

(443

)

 

(304

)

 

46

%

 

(277

)

 

60

%

 

(1,040

)

 

(869

)

 

20

%

Other operating (loss) income

 

(22

)

 

4

 

 

 

 

 

3

 

 

 

 

 

(11

)

 

26

 

 

 

 

Net Financial Results

Net foreign exchange results in the third quarter of 2023 were a loss of $33 million, mainly due to the impact of the depreciation of the Brazilian Real against the US dollar on Usiminas' net short foreign currency position. Fair value of Ternium Argentina's financial investments increased during the period. The US dollar value of these investments is based on their Argentine Peso local market price, converted at the ARS/$ official exchange rate.

$ MILLION

 

3Q23

 

 

2Q23

 

 

3Q22

 

 

9M23

 

 

9M22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest results

 

30

 

 

25

 

 

(8

)

 

80

 

 

18

 

Net foreign exchange result

 

(33

)

 

(25

)

 

(19

)

 

(73

)

 

(137

)

Change in fair value of financial assets

 

36

 

 

(14

)

 

(23

)

 

26

 

 

56

 

Other financial income (expense), net

 

(3

)

 

(4

)

 

(5

)

 

(13

)

 

(16

)

Net financial results

 

30

 

 

(18

)

 

(55

)

 

20

 

 

(79

)

Income Tax Results

Ternium's effective tax rate in the third quarter of 2023 was affected by a $1.1 billion non-cash and non-taxable loss in connection with the increase in the participation in Usiminas. In addition, Ternium's subsidiaries in Mexico and Argentina recorded deferred tax losses as a result of the depreciation of the Mexican Peso and the Argentine Peso against the US dollar (net of the positive impact of inflation).

$ MILLION

 

3Q23

 

 

2Q23

 

 

3Q22

 

 

9M23

 

 

9M22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current income tax expense

 

(164

)

 

(148

)

 

(73

)

 

(450

)

 

(577

)

Deferred tax gain (loss)

 

(89

)

 

143

 

 

(89

)

 

271

 

 

15

 

Income tax (expense) gain

 

(253

)

 

(5

)

 

(162

)

 

(179

)

 

(562

)

Result before income tax

 

(530

)

 

741

 

 

382

 

 

611

 

 

2,596

 

Effective tax rate

 

48

%

 

-1

%

 

-42

%

 

-29

%

 

-22

%

Net Income

Adjusted net income in the third quarter equals a net loss of $783 million, adjusted to exclude a loss of $1.1 billion in connection with the increase in the participation in Usiminas.

Adjusted equity holders' net income in the period equals an equity holders' net loss of $739 million adjusted to exclude a loss of $1.1 billion in connection with the increase in the participation in Usiminas.

Adjusted earnings per ADS equals adjusted equity holders' net income of $271 million 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).

Foto: Accesswire

 

$ MILLION

 

3Q23

 

 

2Q23

 

 

3Q22

 

 

9M23

 

 

9M22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the parent

 

(739

)

 

627

 

 

153

 

 

262

 

 

1,728

 

Non-controlling interest

 

(44

)

 

109

 

 

67

 

 

171

 

 

306

 

Net (Loss) Income

 

(783

)

 

736

 

 

220

 

 

433

 

 

2,034

 

Less: non-cash effects related to the increase in the participation in Usiminas

 

(1,106

)

 

-

 

 

-

 

 

(1,106

)

 

-

 

Adjusted Net Income

 

323

 

 

736

 

 

220

 

 

1,539

 

 

2,034

 

Adjusted EBITDA

Adjusted EBITDA equals net results adjusted to exclude net financial results, income tax results, depreciation and amortization, the equity in results of non-consolidated companies, and non-cash effects related to the increase in the participation in Usiminas, and, in the third quarter of 2023, adjusted to include the proportional EBITDA in Unigal (70% participation).

Adjusted EBITDA Margin equals Adjusted EBITDA divided by net sales.

Foto: Accesswire

Cash Flow and Liquidity

Cash provided by operating activities in the third quarter of 2023 was $945 million, including a working capital reduction of $388 million.

The decrease in working capital was due to a $272 million decrease in inventories and an aggregate $270 million net increase in accounts payable and other liabilities, partially offset by an aggregate $153 million increase in trade and other receivables. Inventories decreased along Ternium's main operating subsidiaries, particularly Usiminas. The increase in accounts payable was also broad based.

The main capital expenditure projects carried out during the period were those for the relining of blast furnace #3 in Ipatinga, Brazil, those for the development of the new expansion projects in the industrial center in Pesquería, Mexico, and those for further improving environmental and safety conditions.

Foto: Accesswire

Ternium's free cash flow was $563 million in the third quarter of 2023. During the period, the company invested $119 million in the acquisition of additional shares of Usiminas. Ternium's net cash position as of September 30, 2023, included Ternium Argentina's total position of cash and cash equivalents and other investments of $1.3 billion. On November 16, 2023, the company will pay an interim dividend to shareholders of $1.10 per ADS.

Foto: Accesswire

Conference Call and Webcast

Ternium will host a conference call on November 1, 2023, at 8:30 a.m. ET in which management will discuss third quarter of 2023 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 Latin America's leading flat steel producer, with operating facilities in Mexico, Brazil,

Argentina, Colombia, the southern United States and Central America. The company offers a broad

range of high value-added steel products for customers active in the automotive, home appliances,

HVAC, construction, capital goods, container, food and energy industries through its manufacturing

facilities, service center and distribution networks, and advanced customer integration systems. More

information about Ternium is available at www.ternium.com.

Income Statement

$ MILLION

 

3Q23

 

 

2Q23

 

 

3Q22

 

 

9M23

 

 

9M22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

5,185

 

 

3,871

 

 

4,125

 

 

12,679

 

 

12,868

 

Cost of sales

 

(4,192

)

 

(2,839

)

 

(3,325

)

 

(10,012

)

 

(9,368

)

Gross profit

 

993

 

 

1,032

 

 

800

 

 

2,667

 

 

3,500

 

Selling, general and administrative expenses

 

(443

)

 

(304

)

 

(277

)

 

(1,040

)

 

(869

)

Other operating (expense) income, net

 

(22

)

 

4

 

 

3

 

 

(11

)

 

26

 

Operating income

 

527

 

 

732

 

 

526

 

 

1,616

 

 

2,656

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial expense

 

(47

)

 

(18

)

 

(15

)

 

(81

)

 

(29

)

Financial income

 

78

 

 

42

 

 

7

 

 

161

 

 

47

 

Other financial (expense) income, net

 

0

 

 

(42

)

 

(47

)

 

(60

)

 

(97

)

Equity in earnings of non-consolidated companies

 

19

 

 

27

 

 

(90

)

 

81

 

 

18

 

Effect related to the increase of the participation in Usiminas

 

(171

)

 

-

 

 

-

 

 

(171

)

 

-

 

Recycling of other comprehensive income related to Usiminas

 

(935

)

 

-

 

 

-

 

 

(935

)

 

-

 

(Loss) profit before income tax results

 

(530

)

 

741

 

 

382

 

 

611

 

 

2,596

 

Income tax expense

 

(253

)

 

(5

)

 

(162

)

 

(179

)

 

(562

)

(Loss) profit for the period

 

(783

)

 

736

 

 

220

 

 

433

 

 

2,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the parent

 

(739

)

 

627

 

 

153

 

 

262

 

 

1,728

 

Non-controlling interest

 

(44

)

 

109

 

 

67

 

 

170

 

 

306

 

Net (loss) income

 

(783

)

 

736

 

 

220

 

 

433

 

 

2,034

 

Statement of Financial Position

$ MILLION	 	SEPTEMBER 30, 2023		 	 	DECEMBER 31, 2022		 
 	 	 		 	 	 		 
Property, plant and equipment, net	 	 	7,384	 	 	 	6,262	 
Intangible assets, net	 	 	1,029	 	 	 	944	 
Investments in non-consolidated companies	 	 	513	 	 	 	822	 
Other investments	 	 	263	 	 	 	101	 
Deferred tax assets	 	 	1,527	 	 	 	200	 
Receivables, net	 	 	809	 	 	 	319	 
Trade receivables, net	 	 	0	 	 	 	-	 
Total non-current assets	 	 	11,524	 	 	 	8,648	 
 	 	 	 	 	 	 	 	 
Receivables, net	 	 	1,162	 	 	 	663	 
Derivative financial instruments	 	 	-	 	 	 	0	 
Inventories, net	 	 	5,136	 	 	 	3,470	 
Trade receivables, net	 	 	2,173	 	 	 	1,181	 
Other investments	 	 	2,469	 	 	 	1,875	 
Cash and cash equivalents	 	 	1,816	 	 	 	1,653	 
Total current assets	 	 	12,755	 	 	 	8,842	 
 	 	 	 	 	 	 	 	 
Non-current assets classified as held for sale	 	 	7	 	 	 	2	 
 	 	 	 	 	 	 	 	 
Total assets	 	 	24,285	 	 	 	17,492	 

Statement of Financial Position (cont.)

$ MILLION	 	SEPTEMBER 30, 2023		 	 	DECEMBER 31, 2022		 
 	 	 		 	 	 		 
Capital and reserves attributable to the owners of the parent	 	 	12,437	 	 	 	11,846	 
Non-controlling interest	 	 	4,430	 	 	 	1,922	 
Total equity	 	 	16,866	 	 	 	13,768	 
 	 	 	 	 	 	 	 	 
Provisions	 	 	909	 	 	 	81	 
Deferred tax liabilities	 	 	26	 	 	 	163	 
Other liabilities	 	 	1,153	 	 	 	538	 
Trade payables	 	 	11	 	 	 	1	 
Lease liabilities	 	 	199	 	 	 	190	 
Borrowings	 	 	1,194	 	 	 	533	 
Total non-current liabilities	 	 	3,491	 	 	 	1,506	 
 	 	 	 	 	 	 	 	 
Current income tax liabilities	 	 	173	 	 	 	136	 
Other liabilities	 	 	512	 	 	 	345	 
Trade payables	 	 	2,199	 	 	 	1,188	 
Derivative financial instruments	 	 	20	 	 	 	1	 
Lease liabilities	 	 	52	 	 	 	49	 
Borrowings	 	 	971	 	 	 	499	 
Total current liabilities	 	 	3,928	 	 	 	2,217	 
 	 	 	 	 	 	 	 	 
Total liabilities	 	 	7,419	 	 	 	3,723	 
 	 	 	 	 	 	 	 	 
Total equity and liabilities	 	 	24,285	 	 	 	17,492	 

Statement of Cash Flows

$ MILLION

 

3Q23

 

 

2Q23

 

 

3Q22

 

 

9M23

 

 

9M22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Result for the period

 

(783

)

 

736

 

 

220

 

 

433

 

 

2,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

165

 

 

151

 

 

153

 

 

467

 

 

456

 

Income tax accruals less payments

 

158

 

 

(117

)

 

(22

)

 

(116

)

 

(1,106

)

Equity in earnings of non-consolidated companies

 

(19

)

 

(27

)

 

90

 

 

(81

)

 

(18

)

Interest accruals less payments/receipts, net

 

(26

)

 

(40

)

 

5

 

 

(102

)

 

9

 

Changes in provisions

 

(4

)

 

1

 

 

-

 

 

(4

)

 

(2

)

Changes in working capital

 

388

 

 

(605

)

 

548

 

 

1

 

 

198

 

Net foreign exchange results and others

 

(40

)

 

(51

)

 

40

 

 

(98

)

 

150

 

Non-cash effects related to the increase of the participation in Usiminas

 

1,106

 

 

-

 

 

-

 

 

1,106

 

 

-

 

Net cash provided by operating activities

 

945

 

 

48

 

 

1,034

 

 

1,606

 

 

1,721

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(382

)

 

(198

)

 

(136

)

 

(778

)

 

(422

)

(Increase) decrease in other investments

 

(306

)

 

219

 

 

(131

)

 

(755

)

 

(327

)

Proceeds from the sale of property, plant & equipment

 

1

 

 

-

 

 

-

 

 

2

 

 

1

 

Dividends received from non-consolidated companies

 

-

 

 

15

 

 

-

 

 

15

 

 

29

 

Acquisition of non-controlling interest

 

-

 

 

-

 

 

-

 

 

-

 

 

(4

)

Acquisition of business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase consideration

 

(119

)

 

-

 

 

-

 

 

(119

)

 

-

 

Cash acquired

 

781

 

 

-

 

 

-

 

 

781

 

 

-

 

Net cash (used in) provided by investing activities

 

(25

)

 

37

 

 

(267

)

 

(854

)

 

(723

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends paid in cash to company's shareholders

 

-

 

 

(353

)

 

-

 

 

(353

)

 

(353

)

Finance lease payments

 

(16

)

 

(13

)

 

(12

)

 

(43

)

 

(37

)

Proceeds from borrowings

 

163

 

 

27

 

 

71

 

 

236

 

 

225

 

Repayments of borrowings

 

(145

)

 

(31

)

 

(73

)

 

(372

)

 

(614

)

Net cash provided by (used in) financing activities

 

3

 

 

(371

)

 

(14

)

 

(532

)

 

(780

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

923

 

 

(286

)

 

753

 

 

220

 

 

218

 

Shipments

Steel and Mining Segments

THOUSAND TONS

 

3Q23

 

 

2Q23

 

DIF

 

 

3Q22

 

DIF

 

 

9M23

 

 

9M22

 

DIF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

2,135

 

 

2,031

 

 

5

%

 

1,717

 

 

24

%

 

6,233

 

 

4,970

 

 

25

%

Brazil

 

194

 

 

42

 

 

360

%

 

201

 

 

-4

%

 

299

 

 

541

 

 

-45

%

Southern Region

 

558

 

 

563

 

 

-1

%

 

584

 

 

-4

%

 

1,665

 

 

1,773

 

 

-6

%

Other Markets

 

408

 

 

346

 

 

18

%

 

464

 

 

-12

%

 

1,146

 

 

1,592

 

 

-28

%

Total steel products

 

3,296

 

 

2,982

 

 

11

%

 

2,967

 

 

11

%

 

9,344

 

 

8,876

 

 

5

%

Mining products

 

842

 

 

867

 

 

-3

%

 

831

 

 

1

%

 

2,508

 

 

2,565

 

 

-2

%

Usiminas Segment

THOUSAND TONS	 	3Q23	2Q23	DIF	3Q22	DIF	 	9M23	9M22	DIF
 	 	 	 	 	 	 	 	 	 	 
Mexico	 	-	 	 	 	 	 	-	 	 
Brazil	 	955	 	 	 	 	 	955	 	 
Southern Region	 	45	 	 	 	 	 	45	 	 
Other Markets	 	39	 	 	 	 	 	39	 	 
Total Usiminas steel products	 	1,038	 	 	 	 	 	1,038	 	 
Intercompany shipments	 	215	 	 	 	 	 	215	 	 
Third-party shipments	 	2,176	 	 	 	 	 	2,176	 	 
Total Usiminas mining products	 	2,391	 	 	 	 	 	2,391	 	 

Consolidated

THOUSAND TONS

 

3Q23

 

 

2Q23

 

DIF

 

 

3Q22

 

DIF

 

 

9M23

 

 

9M22

 

DIF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

2,135

 

 

2,031

 

 

5

%

 

1,717

 

 

24

%

 

6,233

 

 

4,970

 

 

25

%

Brazil

 

957

 

 

42

 

 

 

 

 

201

 

 

 

 

 

1,063

 

 

541

 

 

 

 

Southern Region

 

603

 

 

563

 

 

7

%

 

584

 

 

3

%

 

1,709

 

 

1,773

 

 

-4

%

Other Markets

 

436

 

 

346

 

 

26

%

 

464

 

 

-6

%

 

1,174

 

 

1,592

 

 

-26

%

Total steel products

 

4,131

 

 

2,982

 

 

39

%

 

2,967

 

 

39

%

 

10,179

 

 

8,876

 

 

15

%

Mining products

 

2,176

 

 

-

 

 

 

 

 

-

 

 

 

 

 

2,176

 

 

-

 

 

 

 

Net Sales

Steel and Mining Segments

$ MILLION

 

3Q23

 

 

2Q23

 

DIF

 

 

3Q22

 

DIF

 

 

9M23

 

 

9M22

 

DIF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

2,383

 

 

2,457

 

 

-3

%

 

2,155

 

 

11

%

 

7,046

 

 

6,874

 

 

3

%

Brazil

 

148

 

 

38

 

 

288

%

 

192

 

 

-23

%

 

228

 

 

467

 

 

-51

%

Southern Region

 

874

 

 

870

 

 

0

%

 

998

 

 

-12

%

 

2,597

 

 

2,883

 

 

-10

%

Other Markets

 

495

 

 

442

 

 

12

%

 

701

 

 

-29

%

 

1,389

 

 

2,386

 

 

-42

%

Total steel products

 

3,900

 

 

3,806

 

 

2

%

 

4,046

 

 

-4

%

 

11,261

 

 

12,610

 

 

-11

%

Other products

 

81

 

 

65

 

 

26

%

 

79

 

 

3

%

 

216

 

 

258

 

 

-16

%

Total steel segment

 

3,982

 

 

3,871

 

 

3

%

 

4,126

 

 

-3

%

 

11,476

 

 

12,868

 

 

-11

%

Mining products

 

114

 

 

110

 

 

3

%

 

101

 

 

13

%

 

309

 

 

314

 

 

-2

%

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

Usiminas Segment

$ MILLION	 	3Q23	2Q23	DIF	3Q22	DIF	 	9M23	9M22	DIF
 	 	 	 	 	 	 	 	 	 	 
Mexico	 	-	 	 	 	 	 	-	 	 
Brazil	 	1,134	 	 	 	 	 	1,134	 	 
Southern Region	 	68	 	 	 	 	 	68	 	 
Other Markets	 	20	 	 	 	 	 	20	 	 
Total Usiminas steel products	 	1,221	 	 	 	 	 	1,221	 	 
Intercompany	 	14	 	 	 	 	 	14	 	 
Third parties	 	149	 	 	 	 	 	149	 	 
Total Usiminas mining products	 	162	 	 	 	 	 	162	 	 
Usiminas segment consolidated net sales	 	1,370	 	 	 	 	 	1,370	 	 

Net Sales (cont.)

Consolidated

$ MILLION	 	3Q23	2Q23	DIF	3Q22	DIF	 	9M23	9M22	DIF
 	 	 	 	 	 	 	 	 	 	 
Mexico	 	2,383	2,457	-3%	2,155	11%	 	7,046	6,874	3%
Brazil	 	1,136	38	 	192	 	 	1,216	467	 
Southern Region	 	941	870	8%	998	-6%	 	2,664	2,883	-8%
Other Markets	 	504	442	14%	701	-28%	 	1,398	2,386	-41%
Total steel products	 	4,964	3,806	30%	4,046	23%	 	12,324	12,610	-2%
Mining products	 	149	-	 	-	 	 	149	-	 
Other products	 	72	65	11%	79	-9%	 	207	258	-20%
Total net sales	 	5,185	3,871	34%	4,125	26%	 	12,679	12,868	-1%

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

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

 

3Q23

 

 

2Q23

 

 

3Q22

 

 

9M23

 

 

9M22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net (loss) income

 

(783

)

 

736

 

 

220

 

 

433

 

 

2,034

 

Adjusted to exclude:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net financial results

 

(30

)

 

18

 

 

55

 

 

(20

)

 

79

 

Income tax results

 

253

 

 

5

 

 

162

 

 

179

 

 

562

 

Depreciation and amortization

 

165

 

 

151

 

 

153

 

 

467

 

 

456

 

Equity in earnings of non-consolidated companies

 

(19

)

 

(27

)

 

90

 

 

(81

)

 

(18

)

Non-cash effects related to the increase in the participation in Usiminas

 

1,106

 

 

-

 

 

-

 

 

1,106

 

 

-

 

Adjusted to include:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proportional EBITDA in Unigal (70% participation)

 

6

 

 

 

 

 

 

 

 

6

 

 

 

 

Adjusted EBITDA

 

698

 

 

883

 

 

679

 

 

2,089

 

 

3,112

 

Divided by: net sales

 

5,185

 

 

3,871

 

 

4,125

 

 

12,679

 

 

12,868

 

Adjusted EBITDA Margin (%)

 

13

%

 

23

%

 

16

%

 

16

%

 

24

%

Adjusted Net Income

$ MILLION

 

3Q23

 

 

2Q23

 

 

3Q22

 

 

9M23

 

 

9M22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

(783

)

 

736

 

 

220

 

 

433

 

 

2,034

 

Less: non-cash effects related to the increase in the participation in Usiminas

 

(1,106

)

 

-

 

 

-

 

 

(1,106

)

 

-

 

Adjusted Net Income

 

323

 

 

736

 

 

220

 

 

1,539

 

 

2,034

 

Exhibit I - Alternative performance measures (cont.)

Adjusted Equity Holders' Net Income and Adjusted Earnings per ADS

$ MILLION

 

3Q23

 

 

2Q23

 

 

3Q22

 

 

9M23

 

 

9M22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity holders??? net (loss) income

 

(739

)

 

627

 

 

153

 

 

262

 

 

1,728

 

Less: non-cash effects related to the increase in the participation in Usiminas

 

(1,010

)

 

-

 

 

-

 

 

(1,010

)

 

-

 

Adjusted Equity Holders??? Net Income

 

271

 

 

627

 

 

153

 

 

1,272

 

 

1,728

 

Divided by: the outstanding shares of common stock, net of treasury shares (expressed in ADS equivalent)

 

196

 

 

196

 

 

196

 

 

196

 

 

196

 

Adjusted Earnings per ADS ($)

 

1.38

 

 

3.19

 

 

0.78

 

 

6.48

 

 

8.80

 

Free Cash Flow

$ MILLION

 

3Q23

 

 

2Q23

 

 

3Q22

 

 

9M23

 

 

9M22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

945

 

 

48

 

 

1,034

 

 

1,606

 

 

1,721

 

Less: capital expenditures

 

(382

)

 

(198

)

 

(136

)

 

(778

)

 

(422

)

Free cash flow

 

563

 

 

(150

)

 

898

 

 

828

 

 

1,299

 

Net Cash Position

$ BILLION	 	SEPTEMBER 30, 2023		 	JUNE 30, 2023		 	SEPTEMBER 30, 2022		 
 	 	 		 	 		 	 		 
Cash and cash equivalents 2	 	 	1.8	 	 	0.9	 	 	1.5	 
Plus: other investments (current and non-current) 2	 	 	2.7	 	 	2.1	 	 	1.4	 
Less: borrowings (current and non-current)	 	 	(2.2	)	 	(0.9	)	 	(1.1	)
Net cash position	 	 	2.4	 	 	2.2	 	 	1.8	 

⁽²⁾ Ternium Argentina's consolidated position of cash and cash equivalents and other investments amounted to $1.3 billion as of September 30, 2023, and $1.0 billion as of June 30, 2023, and September 30, 2022.

SOURCE: Ternium S.A.
 

View source version on accesswire.com:
https://www.accesswire.com/798173/ternium-announces-third-quarter-and- ...


The Ternium ADR Stock at the time of publication of the news with a fall of -0,55 % to 16.123ARS on Buenos Aires stock exchange (30. Oktober 2023, 21:00 Uhr).