LUXEMBOURG / ACCESSWIRE / August 1, 2023 / Ternium S.A. (NYSE:TX) today announced its results for the second quarter and first half ended June 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 ($) and metric tons. This press release includes certain non-IFRS alternative performance measures such as Adjusted EBITDA, Net Cash and Free Cash Flow. The reconciliation of these figures to the most directly comparable IFRS measures is included in Exhibit I.
Summary of Second Quarter of 2023 Results
| 2Q23 | 1Q23 | 2Q22 | |||||||||||||
Steel Shipments (tons) | 2,982,000 | 3,065,000 | -3 | % | 2,957,000 | 1 | % | ||||||||
Iron Ore Shipments (tons) | 867,000 | 799,000 | 9 | % | 837,000 | 4 | % | ||||||||
Net Sales ($ million) | 3,871 | 3,623 | 7 | % | 4,438 | -13 | % | ||||||||
Operating Income ($ million) | 732 | 357 | 105 | % | 1,071 | -32 | % | ||||||||
Adjusted EBITDA ($ million) | 883 | 508 | 74 | % | 1,225 | -28 | % | ||||||||
Adjusted EBITDA Margin (% of net sales) | 23 | % | 14 | % | 28 | % | |||||||||
Adjusted EBITDA per Ton ($) | 296 | 166 | 414 | ||||||||||||
Net Income ($ million) | 736 | 480 | 936 | ||||||||||||
Equity Holders' Net Income ($ million) | 627 | 374 | 799 | ||||||||||||
Earnings per ADS1 ($) | 3.19 | 1.91 | 4.07 | ||||||||||||
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.
- Adjusted EBITDA of $882.6 million on steel shipments of 3.0 million tons, with adjusted EBITDA margin of 23% and adjusted EBITDA per ton of $296.
- Equity holders' net income of $626.9 million, equivalent to earnings per ADS of $3.19.
- Net cash provided by operating activities of $47.9 million, after a working capital increase of $604.9 million primarily reflecting higher inventory volumes and the impact on trade receivables of higher steel prices.
- Negative free cash flow of $149.6 million, after capital expenditures of $197.5 million.
- Dividends paid to Ternium's shareholders of $1.80 per ADS, or $353.4 million, and dividends in kind paid to non-controlling interest of $233.5 million.
- Net cash position of $2.2 billion at the end of June 2023, compared to $3.0 billion at the end of March 2023.
Ternium's steel shipments in the second quarter of 2023 were 3.0 million tons, down 3% sequentially and up 1% compared to the prior-year second quarter.
In Mexico, shipments were 2.0 million tons in the period, down 2% from a first quarter all-time-high, and up 21% versus the second quarter of 2022. Shipments to Ternium's Mexican industrial customers increased in the period, particularly to home appliance manufacturers and the automotive industry. Commercial market steel demand remained healthy. However, Ternium's sales to commercial customers decreased in the second quarter reflecting lower utilization rates at its facilities, mainly in connection with certain logistic constraints during the period.
In the Southern Region, steel volumes increased 4% sequentially in the second quarter of 2023, mainly reflecting higher shipments in Argentina following a seasonally slow first quarter. On a year-over-year basis, shipments in the second quarter decreased 6%, reflecting lower steel demand in Argentina and reduced sales to other countries in the Southern Region.
In other markets, shipments decreased 15% on a sequential basis and 43% year-over-year due to lower sales to finished steel customer and slabs to third parties.
Revenue per ton in the second quarter of 2023 was $1,276, increasing $177 sequentially mainly as a result of higher realized steel prices in Mexico and other markets. On a year-over-year basis, revenue per ton decreased $195 in the second quarter reflecting lower realized steel prices in Ternium's main steel markets.
Operating income in the second quarter of 2023 was $731.7 million. Ternium's adjusted EBITDA in the period was $882.6 million with adjusted EBITDA per ton of $296. On a sequential basis, adjusted EBITDA per ton increased $130 in the second quarter mainly reflecting higher realized steel prices and slightly lower cost per ton. On a year-over-year basis, adjusted EBITDA per ton decreased $118 due to lower realized steel prices, partially offset by a decrease in cost per ton. Net income in the second quarter of 2023 was $735.9 million.
Summary of First Half of 2023 Results
| 1H23 | 1H22 | |||||||||
Steel Shipments (tons) | 6,048,000 | 5,909,000 | 2 | % | ||||||
Iron Ore Shipments (tons) | 1,667,000 | 1,734,000 | -4 | % | ||||||
Net Sales ($ million) | 7,495 | 8,743 | -14 | % | ||||||
Operating Income ($ million) | 1,089 | 2,130 | -49 | % | ||||||
Adjusted EBITDA ($ million) | 1,391 | 2,433 | -43 | % | ||||||
Adjusted EBITDA Margin (% of net sales) | 19 | % | 28 | % | ||||||
Adjusted EBITDA per Ton ($) | 230 | 412 | ||||||||
Net Income ($ million) | 1,215 | 1,814 | ||||||||
Equity Holders' Net Income ($ million) | 1,001 | 1,575 | ||||||||
Earnings per ADS1 ($) | 5.10 | 8.02 | ||||||||
- Adjusted EBITDA of $1.4 billion, on steel shipments of 6.0 million tons, with adjusted EBITDA margin of 19% and adjusted EBITDA per ton of $230.
- Equity holders' net income of $1.0 billion, equivalent to earnings per ADS of $5.10.
- Net cash provided by operating activities of $660.2 million, after a working capital increase of $386.9 million, primarily reflecting higher inventory volumes and trade receivables.
- Free cash flow of $264.8 million after capital expenditures of $395.4 million.
Ternium's steel shipments in the first half of 2023 were 6.0 million tons, up 139,000 tons compared to shipment levels in the first half of 2022 due to a 399,000-ton increase in finished steel shipments, partially offset by a 260,000-ton decrease in the volume of slabs shipped to third parties, reflecting the company's increased integration.
Sales volumes in Mexico increased 26% year-over-year in the first half of 2023, as Ternium gained share in the local flat steel market supported by the company's new state-of-the-art facilities in Pesquería. In the Southern Region, shipments were down 7% year-over-year reflecting lower steel demand in Argentina and lower shipments to other countries in the Southern Region. In other markets, steel volumes decreased 43% reflecting lower shipments of slabs to third parties and lower sales of finished steel products, as the company increased sales in Mexico.
Revenue per ton was $1,217 in the first half of 2022, a $232 decrease compared to revenue per ton in the first half of 2022, mainly reflecting lower realized steel prices in Mexico and other markets.
Operating income amounted to $1.1 billion in the first half of 2023, with adjusted EBITDA of $1.4 billion. Adjusted EBITDA per ton was $230 in the period, decreasing $182 year-over-year due to lower realized steel prices partially offset by lower cost per ton. Net income in the first half of 2023 was $1.2 billion.
Consolidation of Usiminas
The third quarter of 2023 will be the first quarter in which Ternium will have fully consolidated Usiminas into its financial statements. As a result, Ternium's consolidated third quarter of 2023 financial information will be materially different when compared to the second quarter of 2023.
For context, Usiminas reported steel shipments of 972 thousand tons, iron ore shipments of 2.4 million tons, net sales of $1.4 billion, operating income of $13.8 million and net income of $58.1 million for its second quarter of 2023. Currently, Ternium has an economic participation of 23.3% in Usiminas. Consequently, beginning in the third quarter of 2023, Ternium's profit attributable to non-controlling interest will also include results from the 76.7% economic participation in Usiminas that is not owned by Ternium's shareholders.
Outlook
Excluding the impact of the consolidation of Usiminas on Ternium's financial results, Ternium expects third quarter EBITDA to decrease compared to the second quarter, with higher shipments partially offset by a lower EBITDA margin that will result from a decrease in international prices and slightly higher cost per ton.
In Mexico, the company anticipates higher sequential shipments in the third quarter, driven by continued strength in the automotive and white-goods industrial sectors. In addition, Mexico's commercial market remains stable, with no significant accumulation of inventories in the commercial value chain.
In Argentina, Ternium expects shipments in the third quarter to remain at the same level as in the second quarter. However, the company anticipates that high inflation, constraints to imports of raw materials, the significantly unstable macroeconomic environment and upcoming election-related uncertainty would negatively impact domestic steel market activity and demand in the second half of 2023.
Analysis of Second Quarter of 2023 Results
Net sales in the second quarter of 2023 were $3.9 billion, 7% higher than net sales in the first quarter of 2023 and 13% lower than net sales in the second quarter of 2022. The following table outlines Ternium's consolidated net sales for the aforementioned periods:
| Net Sales | ||||||||||||||||
$ million | 2Q23 | 1Q23 | Dif | 2Q22 | Dif | |||||||||||
Mexico | 2,457 | 2,206 | 11 | % | 2,456 | 0 | % | |||||||||
Southern Region | 870 | 854 | 2 | % | 990 | -12 | % | |||||||||
Other markets | 480 | 494 | -3 | % | 905 | -47 | % | |||||||||
Total steel products | 3,806 | 3,554 | 7 | % | 4,352 | -13 | % | |||||||||
Other products* | 65 | 69 | -7 | % | 86 | -24 | % | |||||||||
Total steel segment | 3,871 | 3,623 | 7 | % | 4,438 | -13 | % | |||||||||
Total mining segment | 110 | 85 | 29 | % | 111 | -1 | % | |||||||||
Total steel and mining segments | 3,981 | 3,708 | 7 | % | 4,548 | -12 | % | |||||||||
Intersegment eliminations | (110 | ) | (85 | ) | 29 | % | (111 | ) | -1 | % | ||||||
Total net sales | 3,871 | 3,623 | 7 | % | 4,438 | -13 | % | |||||||||
*The item "Other products" primarily includes electricity sales in Brazil and Mexico.
| Shipments | ||||||||||||||||||||
Thousand tons | 2Q23 | 1Q23 | Dif | 2Q22 | Dif | |||||||||||||||
Mexico | 2,031 | 2,066 | -2 | % | 1,679 | 21 | % | |||||||||||||
Southern Region | 563 | 544 | 4 | % | 601 | -6 | % | |||||||||||||
Other markets | 388 | 455 | -15 | % | 677 | -43 | % | |||||||||||||
Total steel segment | 2,982 | 3,065 | -3 | % | 2,957 | 1 | % | |||||||||||||
Total mining segment | 867 | 799 | 8 | % | 837 | 4 | % | |||||||||||||
Revenue / ton | ||||||||||||||||||||
$/ton | 2Q23 | 1Q23 | Dif | 2Q22 | Dif | |||||||||||||||
Mexico | 1,209 | 1,068 | 13 | % | 1,463 | -17 | % | |||||||||||||
Southern Region | 1,545 | 1,570 | -2 | % | 1,647 | -6 | % | |||||||||||||
Other markets | 1,237 | 1,085 | 14 | % | 1,337 | -7 | % | |||||||||||||
Total steel segment | 1,276 | 1,159 | 10 | % | 1,471 | -13 | % | |||||||||||||
Total mining segment | 127 | 106 | 19 | % | 132 | -4 | % | |||||||||||||
Cost of sales was $2.8 billion in the second quarter of 2023, $141.3 million lower sequentially, principally due to a $187.0 million, or 8%, decrease in raw materials and consumables used, mainly reflecting lower purchased slab and energy costs, and a 3% decrease in steel shipments; partially offset by a $45.7 million increase in other costs, including a $34.1 million increase in maintenance expenses and a $6.4 million increase in services and fees. Compared to the second quarter of 2022, cost of sales decreased $219.5 million, principally due to a $138.0 million, or 6%, decrease in raw materials and consumables used, mainly reflecting lower raw material and energy costs; and to a $81.4 million decrease in other costs, including a $107.2 million decrease in labor costs primarily in connection with Ternium Mexico employees' profit sharing scheme, and a $22.0 million increase in maintenance expenses.
Selling, General & Administrative (SG&A) expenses in the second quarter of 2023 were $304.3 million, or 8% of net sales, an increase of $11.3 million compared to SG&A in the first quarter of 2023, and a decrease of $6.2 million compared to SG&A in the second quarter of 2022.
Operating income in the second quarter of 2023 was $731.7 million, or 19% of net sales, compared to operating income of $357.4 million, or 10% of net sales, in the first quarter of 2023, and operating income of $1.1 billion, or 24% of net sales, in the second quarter of 2022.
Net financial results were a loss of $18.0 million in the second quarter of 2023, including a net foreign exchange loss of $24.9 million primarily related to the negative impact of the appreciation of the Mexican Peso and Colombian Peso against the US dollar (6% and 10% in the period, respectively) on Ternium's Mexican and Colombian subsidiaries net local currency positions. Net financial results in the first quarter of 2023 and the second quarter of 2022 were a gain of $7.8 million and a gain of $37.2 million, respectively.
The equity in the results of non-consolidated companies was a gain of $27.3 million in the second quarter of 2023, lower than a gain of $34.9 million in the first quarter of 2023 and a gain of $49.3 million in the prior-year second quarter, mainly reflecting a decrease in the results of Ternium's investment in Usiminas.
Income tax expense in the second quarter of 2023 was $5.2 million, with a 1% effective tax rate, mainly due to positive deferred tax results at Ternium's Mexican subsidiaries, as the Mexican Peso appreciated against the US dollar in the period. Income tax results in the first quarter of 2023 and the prior-year second quarter were a gain of $79.4 million and an expense of $221.4 million, respectively.
Analysis of First Half of 2023 Results
Net sales in the first half of 2023 were $7.5 billion, 14% lower than net sales in the first half of 2022. The following table outlines Ternium's consolidated net sales for the first half of 2023 and 2022:
| Net Sales (million $) | Shipments (thousand tons) | Revenue/ton ($/ton) | ||||||||||||||||||||||||||
| 1H23 | 1H22 | Dif. | 1H23 | 1H22 | Dif. | 1H23 | 1H22 | Dif. | ||||||||||||||||||||
Mexico | 4,663 | 4,719 | -1 | % | 4,098 | 3,252 | 26 | % | 1,138 | 1,451 | -22 | % | ||||||||||||||||
Southern Region | 1,724 | 1,886 | -9 | % | 1,107 | 1,188 | -7 | % | 1,557 | 1,587 | -2 | % | ||||||||||||||||
Other markets | 974 | 1,960 | -50 | % | 843 | 1,468 | -43 | % | 1,155 | 1,335 | -13 | % | ||||||||||||||||
Total steel products | 7,360 | 8,564 | -14 | % | 6,048 | 5,909 | 2 | % | 1,217 | 1,449 | -16 | % | ||||||||||||||||
Other products* | 134 | 179 | -25 | % | ||||||||||||||||||||||||
Steel segment | 7,495 | 8,742 | -14 | % | ||||||||||||||||||||||||
Mining segment | 195 | 214 | -9 | % | 1,667 | 1,734 | -4 | % | 117 | 123 | -5 | % | ||||||||||||||||
Intersegment eliminations | (195 | ) | (213 | ) | -9 | % | ||||||||||||||||||||||
Net sales | 7,495 | 8,743 | -14 | % | ||||||||||||||||||||||||
*The item "Other products" primarily includes electricity sales in Brazil and Mexico.
Cost of sales was $5.8 billion in the first half of 2023, a decrease of $222.9 million compared to the first half of 2022. This was primarily due to a $185.7 million, or 4%, decrease in raw materials and consumables used, mainly reflecting lower raw material and energy costs, partially offset by a 2% increase in steel volumes; and to a $37.2 million decrease in other costs including a $79.2 million decrease in labor costs mainly in connection with Ternium Mexico employees' profit sharing scheme, a $30.3 million increase in maintenance expenses and a $12.9 million increase in services and fees.
Selling, General & Administrative (SG&A) expenses in the first half of 2023 were $597.2 million, or 8% of net sales, an increase of $5.4 million compared to SG&A expenses in the first half of 2022.
Operating income in the first half of 2023 was $1.1 billion, or 15% of net sales, compared to operating income of $2.1 billion, or 24% of net sales, in the first half of 2022.
Net financial results were a loss of $10.2 million in the first half of 2023, mainly reflecting a $40.4 million net foreign exchange loss, a $9.8 million loss related to changes in the fair value of financial assets and a $49.7 million net financial interest result gain. The net foreign exchange loss in the first half of 2023 was primarily related to the negative impact of the appreciation of the Mexican Peso and Colombian Peso against the US dollar (13% and 15% in the period, respectively) on Ternium's Mexican and Colombian subsidiaries net local currency positions. Net financial results in the first half of 2022 were a loss of $23.7 million.
The equity in the results of non-consolidated companies was a gain of $62.2 million in the first half of 2023, lower than a gain of $108.0 million in the first half of 2022 mainly reflecting a decrease in the results of Ternium's investment in Usiminas.
Income tax results in the first half of 2023 were a gain of $74.3 million, mainly due to positive deferred tax results at Ternium's Mexican subsidiaries, as the Mexican Peso appreciated against the US dollar in the period. Income tax expense in the first half of 2022 was $400.8 million.
Cash Flow and Liquidity
Net cash provided by operating activities in the first half of 2023 was $660.2 million. Working capital increased by $386.9 million in the first half of 2023 as a result of an aggregate $288.4 million increase in inventories and an aggregate $232.1 million increase in trade and other receivables, partially offset by an aggregate $133.6 million net increase in accounts payable and other liabilities. The inventory value increase in the first half of 2023 was due to a $260.2 million higher steel volume and a $52.6 million increase in raw materials, supplies and others, partially offset by a $24.4 million lower cost of steel.
Capital expenditures in the first half of 2023 were $395.4 million, $109.8 million higher than in the first half of 2022. During the period, Ternium advanced diverse projects throughout its main facilities, including those for further improving environmental and safety conditions, and for the development of the new expansion projects in Ternium's industrial center in Pesquería, Mexico.
In the first half of 2023, Ternium's free cash flow was $264.8 million. In the period, the company paid dividends to shareholders of $353.4 million and dividends in kind to non-controlling interest of $233.5 million. As of June 30, 2023, Ternium's net cash position was $2.2 billion, including Ternium Argentina's total position of cash and cash equivalents and other investments of $1.0 billion.
Net cash provided by operating activities in the second quarter of 2023 was $47.9 million. Working capital increased by $604.9 million in the second quarter of 2023 as a result of a $461.0 million increase in inventories, an aggregate $89.3 million net increase in trade and other receivables, and an aggregate $54.6 million net decrease in accounts payable and other liabilities. The inventory value increase in the second quarter of 2023 was due to a $414.1 million higher steel volume, and a $104.6 million higher cost of steel, partially offset by a $57.8 million decrease in raw materials, supplies and others. In the second quarter of 2023, Ternium had negative free cash flow of $149.6 million.
Conference Call and Webcast
Ternium will host a conference call on August 2, 2023, at 8:30 a.m. ET in which management will discuss second 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.
Consolidated Income Statement
$ million | 2Q23 | 1Q23 | 2Q22 | 1H23 | 1H22 | |||||||||||
| (Unaudited) | ||||||||||||||||
Net sales | 3,871 | 3,623 | 4,438 | 7,495 | 8,743 | |||||||||||
Cost of sales | (2,839 | ) | (2,981 | ) | (3,059 | ) | (5,820 | ) | (6,043 | ) | ||||||
Gross profit | 1,032 | 643 | 1,379 | 1,674 | 2,699 | |||||||||||
Selling, general and administrative expenses | (304 | ) | (293 | ) | (310 | ) | (597 | ) | (592 | ) | ||||||
Other operating income, net | 4 | 8 | 3 | 12 | 23 | |||||||||||
Operating income | 732 | 357 | 1,071 | 1,089 | 2,130 | |||||||||||
Finance expense | (18 | ) | (16 | ) | (7 | ) | (34 | ) | (14 | ) | ||||||
Finance income | 42 | 41 | 16 | 83 | 40 | |||||||||||
Other financial (expense) income, net | (42 | ) | (17 | ) | 29 | (60 | ) | (50 | ) | |||||||
Equity in earnings of non-consolidated companies | 27 | 35 | 49 | 62 | 108 | |||||||||||
Profit before income tax results | 741 | 400 | 1,158 | 1,141 | 2,214 | |||||||||||
Income tax results | (5 | ) | 79 | (221 | ) | 74 | (401 | ) | ||||||||
Profit for the period | 736 | 480 | 936 | 1,215 | 1,814 | |||||||||||
Attributable to: | ||||||||||||||||
Owners of the parent | 627 | 374 | 799 | 1,001 | 1,575 | |||||||||||
Non-controlling interest | 109 | 105 | 137 | 214 | 239 | |||||||||||
Profit for the period | 736 | 480 | 936 | 1,215 | 1,814 | |||||||||||
Consolidated Statement of Financial Position
$ million | June 30, 2023 | December 31, 2022 | ||||||
| (Unaudited) | ||||||||
Property, plant and equipment, net | 6,324 | 6,262 | ||||||
Intangible assets, net | 968 | 944 | ||||||
Investments in non-consolidated companies | 939 | 822 | ||||||
Other investments | 103 | 101 | ||||||
Deferred tax assets | 349 | 200 | ||||||
Receivables, net | 409 | 319 | ||||||
Total non-current assets | 9,093 | 8,648 | ||||||
Receivables, net | 719 | 663 | ||||||
Derivative financial instruments | - | 0 | ||||||
Inventories, net | 3,759 | 3,470 | ||||||
Trade receivables, net | 1,412 | 1,181 | ||||||
Other investments | 2,032 | 1,875 | ||||||
Cash and cash equivalents | 920 | 1,653 | ||||||
Total current assets | 8,842 | 8,842 | ||||||
Non-current assets classified as held for sale | 2 | 2 | ||||||
Total assets | 17,937 | 17,492 | ||||||
Capital and reserves attributable to the owners of the parent | 12,387 | 11,846 | ||||||
Non-controlling interest | 1,923 | 1,922 | ||||||
Total Equity | 14,310 | 13,768 | ||||||
Provisions | 85 | 81 | ||||||
Deferred tax liabilities | 25 | 163 | ||||||
Other liabilities | 603 | 538 | ||||||
Trade payables | 1 | 1 | ||||||
Lease liabilities | 179 | 190 | ||||||
Borrowings | 515 | 533 | ||||||
Total non-current liabilities | 1,409 | 1,506 | ||||||
Current income tax liabilities | 109 | 136 | ||||||
Other liabilities | 350 | 345 | ||||||
Trade payables | 1,322 | 1,188 | ||||||
Derivative financial instruments | 14 | 1 | ||||||
Lease liabilities | 46 | 49 | ||||||
Borrowings | 378 | 499 | ||||||
Total current liabilities | 2,219 | 2,217 | ||||||
Total liabilities | 3,627 | 3,723 | ||||||
Total equity and liabilities | 17,937 | 17,492 | ||||||
Consolidated Statement of Cash Flows
$ million | 2Q23 | 1Q23 | 2Q22 | 1H23 | 1H22 | |||||||||||
| (Unaudited) | ||||||||||||||||
Profit for the period | 736 | 480 | 936 | 1,215 | 1,814 | |||||||||||
Adjustments for: | ||||||||||||||||
Depreciation and amortization | 151 | 151 | 153 | 301 | 303 | |||||||||||
Income tax accruals less payments | (117 | ) | (157 | ) | (396 | ) | (273 | ) | (1,084 | ) | ||||||
Equity in earnings of non-consolidated companies | (27 | ) | (35 | ) | (49 | ) | (62 | ) | (108 | ) | ||||||
Interest accruals less payments | (40 | ) | (36 | ) | 2 | (76 | ) | 4 | ||||||||
Changes in provisions | 1 | (1 | ) | 1 | 0 | (2 | ) | |||||||||
Changes in working capital | (605 | ) | 218 | (681 | ) | (387 | ) | (350 | ) | |||||||
Net foreign exchange results and others | (51 | ) | (7 | ) | 29 | (58 | ) | 110 | ||||||||
Net cash provided by (used in) operating activities | 48 | 612 | (5 | ) | 660 | 687 | ||||||||||
Capital expenditures | (198 | ) | (198 | ) | (161 | ) | (395 | ) | (286 | ) | ||||||
Decrease (increase) in other investments | 219 | (668 | ) | (277 | ) | (449 | ) | (195 | ) | |||||||
Proceeds from the sale of property, plant & equipment | - | 1 | - | 1 | 1 | |||||||||||
Dividends received from non-consolidated companies | 15 | - | 29 | 15 | 29 | |||||||||||
Acquisition of non-controlling interest | - | - | (4 | ) | - | (4 | ) | |||||||||
Net cash provided by (used in) investing activities | 37 | (865 | ) | (413 | ) | (828 | ) | (455 | ) | |||||||
Dividends paid in cash to company's shareholders | (353 | ) | - | (353 | ) | (353 | ) | (353 | ) | |||||||
Finance lease payments | (13 | ) | (14 | ) | (13 | ) | (27 | ) | (25 | ) | ||||||
Proceeds from borrowings | 27 | 46 | 74 | 73 | 154 | |||||||||||
Repayments of borrowings | (31 | ) | (196 | ) | (339 | ) | (227 | ) | (541 | ) | ||||||
Net cash used in financing activities | (371 | ) | (164 | ) | (631 | ) | (535 | ) | (766 | ) | ||||||
Decrease in cash and cash equivalents | (286 | ) | (417 | ) | (1,049 | ) | (703 | ) | (535 | ) | ||||||
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.
EBITDA equals net income adjusted to exclude net financial results, income tax results, depreciation and amortization. Adjusted EBITDA equals EBITDA adjusted to exclude the equity in earnings of non-consolidated companies. Adjusted EBITDA per ton equals adjusted EBITDA divided by steel shipments and Adjusted EBITDA Margin equals Adjusted EBITDA divided by net sales:
$ million | 2Q23 | 1Q23 | 2Q22 | 1H23 | 1H22 | ||||||||||
Net income | 736 | 480 | 936 | 1,215 | 1,814 | ||||||||||
Adjusted to exclude: | |||||||||||||||
Net financial results | 18 | (8 | ) | (37 | ) | 10 | 24 | ||||||||
Income tax results | 5 | (79 | ) | 221 | (74 | ) | 401 | ||||||||
Depreciation and amortization | 151 | 151 | 153 | 302 | 303 | ||||||||||
EBITDA | 910 | 544 | 1,273 | 1,453 | 2,542 | ||||||||||
Less: Equity in earnings of non-consolidated companies | (27 | ) | (35 | ) | (49 | ) | (62 | ) | (108 | ) | |||||
Adjusted EBITDA | 883 | 508 | 1,225 | 1,391 | 2,433 | ||||||||||
Divided by: steel shipments (000 tons) | 2,982 | 3,065 | 2,957 | 6,048 | 5,909 | ||||||||||
Adjusted EBITDA per ton ($) | 296 | 166 | 414 | 230 | 412 | ||||||||||
Divided by: net sales ($ million) | 3,871 | 3,623 | 4,438 | 7,495 | 8,743 | ||||||||||
Adjusted EBITDA Margin (%) | 23 | % | 14 | % | 28 | % | 19 | % | 28 | % |
Free cash flow equals net cash provided by (used in) operating activities less capital expenditures:
$ million | 2Q23 | 1Q23 | 2Q22 | 1H23 | 1H22 | |||||||||||
Net cash provided by (used in) operating activities | 48 | 612 | (5 | ) | 660 | 687 | ||||||||||
Less: capital expenditures | (198 | ) | (198 | ) | (161 | ) | (395 | ) | (286 | ) | ||||||
Free cash flow | (150 | ) | 414 | (166 | ) | 265 | 401 |
Net cash equals the consolidated position of cash and cash equivalents and other investments less borrowings:
$ billion | June 30, 2023 | March 31, 2023 | June 30, 2022 | |||||||||
Cash and cash equivalents2 | 0.9 | 1.2 | 0.7 | |||||||||
Plus: other investments (current and non-current)2 | 2.1 | 2.6 | 1.4 | |||||||||
Less: borrowings (current and non-current) | (0.9 | ) | (0.9 | ) | (1.1 | ) | ||||||
Net cash | 2.2 | 3.0 | 1.0 | |||||||||
2 Ternium Argentina's consolidated position of cash and cash equivalents and other investments amounted to $1.0, $1.5 and $1.1 billion as of June 30, 2023, March 31, 2023, and June 30, 2022, respectively.
Contact:
Sebastián Martí
Ternium - Investor Relations
+1 (866) 890 0443
+54 (11) 4018 8389
www.ternium.com
SOURCE: Ternium S.A.