The giant steel producer of Latin America, Ternium announced double-digit increases in sales volume and value in the second quarter of the year. However, it reported net losses of $743 million, a figure that contrasted with net income of $736 million in the second quarter of last year, according to the company's financial statements.
According to the financial report sent to the stock markets, steel shipments increased 28.8 percent to 3.84 million metric tons (mt). Of that volume, Mexico shipped 1.98 million mt (51.7 percent of the total), Brazil contributed 977,000 mt (25.4 percent of the total) and in the southern cone it shipped 426,000 mt (11.1 percent).
The average price decreased 12.6 percent to $1,115/mt in the total average, compared to the second quarter of 2023. In Argentina (Southern Cone) it was sold at $1,337/mt (13.5 percent less), in Brazil the average price was $1,031 /mt (13.8 percent more) and in Mexico it was $1,081/mt.
Total sales totaled $4.51 billion, up 16.6 percent from $3.87 billion in the second quarter of last year. In Mexico, $2.14 billion (50.1 percent of the total) were generated from the sale of steel products, 12.7 percent less compared to the second quarter of last year.
Brazil contributed $1.0 billion from the sale of steel, a figure that compares favorably to the $38 million in April-June 2023. Argentina contributed $569 million, 34.9 percent less.
In the second quarter of last year, Ternium did not register shipments of mining products, although this year it shipped 1.50 million mt.
Operating income decreased 49.3 percent to $371 million. Adjusted EBITDA was $545 million. The EBITDA margin went from 23.0 percent in the second quarter of 2023 to 12.0 percent in the same quarter of 2024.
In this scenario, the company's outlook is that it expects a sequential decrease in adjusted EBITDA for the third quarter of 2024, mainly attributed to the reduction in margins partially offset by an increase in shipments in its main markets.
Ternium notified that it made a provision of $783 million for ongoing litigation related to the acquisition of a stake in Usiminas in 2012 as a result of an adverse decision by the Brazilian court last June.
In the second quarter, Ternium invested $409 million, mainly in the expansion investment project in Mexico and its new wind farm in Argentina
Despite the investments, Ternium's net cash position at the end of June 2024 was $1.9 billion, slightly below the net cash position of $2.0 billion at the end of March.