Ternium(TX)2025-02-19 19:39Financial Data and Key Metrics Changes - Ternium reported shipments of 16 million tons for 2024 with adjusted EBITDA of 1.6 billion by the end of December, despite nearly 600 million in dividends paid [8][35] - Net income for the fourth quarter was 404 million provision reversal for ongoing litigations [28][29] Business Line Data and Key Metrics Changes - Steel segment net sales declined sequentially by 14% in the fourth quarter due to lower shipments and reduced realized prices across all markets [31][32] - Mining shipments remained stable during the quarter but were down approximately 9% year-over-year, primarily due to lower production levels in Mexico and Brazil [33] Market Data and Key Metrics Changes - In Mexico, shipments decreased in the fourth quarter due to a weaker commercial market, while the industrial market showed steady activity with a 6% increase in auto industry production [15] - Brazil experienced a positive year with flat steel apparent consumption increasing by 10%, and vehicle production also grew by 10% compared to 2023 [16][17] - Argentina saw a year-over-year decline in shipments of approximately 20%, primarily due to macroeconomic measures by the government [21] Company Strategy and Development Direction - Ternium is advancing its downstream expansion project in Mexico, with significant progress on the pickling line and finishing center [8][9] - The company is focused on enhancing operational efficiency and reducing costs to navigate potential trade scenarios [14] - Ternium's expansion projects in Mexico are crucial for strengthening its integration into the North American market [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the USMCA's role in enhancing competitiveness and trade among member countries [12][96] - The company anticipates a sequential increase in adjusted EBITDA for the first quarter of 2025, supported by margin improvement and a small increase in volumes [27][49] - Management highlighted the ongoing uncertainty in international trade, particularly regarding US tariffs on steel imports [11][24] Other Important Information - The wind farm in Argentina began generating energy, expected to deliver approximately 480 gigawatt-hours per year, aiding in decarbonization goals [10] - Ternium opened a technical school in Brazil to provide high-quality education, reflecting its commitment to community development [20] Q&A Session Summary Question: Outlook for the first quarter and ramp-up of projects - Management expects a slight improvement in the first quarter, with the finishing lines in Pesqueria ramping up to full capacity in the next two to three months [40][43][49] Question: Update on Usiminas stake and CapEx priorities - Management is pleased with Usiminas' performance and is focused on improving productivity and addressing challenges with imports from China [54][58] Question: Impact of trade measures on investments - Management confirmed that they are not postponing investments and are proceeding with projects in Mexico [62][65] Question: Scrap exports and cost structure in Argentina - Scrap exports are not significant for Ternium, as the company does not rely heavily on scrap in Argentina [64] Question: US market supply and demand balance - Management expressed optimism about the USMCA and the potential for North America to strengthen its supply chain against unfair trade [90][96]