DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION | 12 Months Ended |
Dec. 31, 2020shares | |
Entity Addresses [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-3132734 |
Entity Registrant Name | TERNIUM S.A. |
Entity Incorporation, State or Country Code | N4 |
Entity Address, Address Line One | 26, Boulevard Royal– 4th floor |
Entity Address, Postal Zip Code | -2449 |
Entity Address, City or Town | Luxembourg |
Entity Address, Country | LU |
Entity Common Stock, Shares Outstanding | 2,004,743,442 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Document Accounting Standard | International Financial Reporting Standards |
Entity Shell Company | false |
Entity Central Index Key | 0001342874 |
Current Fiscal Year End Date | --12-31 |
Document Period End Date | Dec. 31, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
American Depositary Shares | |
Entity Addresses [Line Items] | |
Title of 12(b) Security | American Depositary Shares |
Trading Symbol | TX |
Security Exchange Name | NYSE |
Ordinary Shares, par value $1.00 per share | |
Entity Addresses [Line Items] | |
Title of 12(b) Security | Ordinary Shares, par value $1.00 per share |
Trading Symbol | TX |
Security Exchange Name | NYSE |
Business Contact | |
Entity Addresses [Line Items] | |
Entity Address, Address Line One | 26, Boulevard Royal– 4th floor |
Entity Address, Postal Zip Code | -2449 |
Entity Address, City or Town | Luxembourg |
Entity Address, Country | LU |
Contact Personnel Name | Alejandra Hryszkiewicz |
City Area Code | 352 |
Local Phone Number | 26 68 31 52 |
Contact Personnel Fax Number | 352 26 53 83 49 |
Contact Personnel Email Address | luxembourg@ternium.com |
Consolidated Income Statements
Consolidated Income Statements - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Profit or loss [abstract] | |||
Net sales | $ 8,735,435 | $ 10,192,818 | $ 11,454,807 |
Cost of sales | (7,099,923) | (8,452,440) | (8,483,328) |
Gross profit | 1,635,512 | 1,740,378 | 2,971,479 |
Selling, general and administrative expenses | (762,882) | (897,475) | (876,764) |
Other operating income (expenses), net | 206,843 | 21,663 | 13,656 |
Profit (loss) from operating activities | 1,079,473 | 864,566 | 2,108,371 |
Finance expense | (46,644) | (88,284) | (131,172) |
Finance income | 49,421 | 29,071 | 21,236 |
Other financial income (expenses), net | 19,554 | (39,756) | (69,640) |
Equity in earnings of non-consolidated companies | 57,555 | 60,967 | 102,772 |
Profit before income tax expense | 1,159,359 | 826,564 | 2,031,567 |
Income tax expense | (291,488) | (196,519) | (369,435) |
Profit for the year | 867,871 | 630,045 | 1,662,132 |
Attributable to: | |||
Owners of the parent | 778,468 | 564,269 | 1,506,647 |
Non-controlling interest | $ 89,403 | $ 65,776 | $ 155,485 |
Weighted average number of shares outstanding (in shares) | 1,963,076,776 | 1,963,076,776 | 1,963,076,776 |
Basic and diluted earnings per share for profit attributable to the owners of the parent (expressed in $ per share) | $ 0.40 | $ 0.29 | $ 0.77 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of comprehensive income [abstract] | |||
Profit for the year | $ 867,871 | $ 630,045 | $ 1,662,132 |
Items that may be reclassified subsequently to profit or loss: | |||
Currency translation adjustment | 160 | (41,455) | (376,220) |
Currency translation adjustment from participation in non-consolidated companies | (109,079) | (20,470) | (73,761) |
Changes in the fair value of financial instruments at fair value through other comprehensive income | (3,100) | (877) | (1,036) |
Income tax related to financial instruments at fair value | 1,230 | 0 | 122 |
Changes in the fair value of derivatives classified as cash flow hedges | (266) | (750) | (132) |
Income tax relating to cash flow hedges | 80 | 225 | (73) |
Other comprehensive income items | (966) | 669 | (897) |
Other comprehensive income items from participation in non-consolidated companies | 400 | 6 | 499 |
Items that will not be reclassified subsequently to profit or loss: | |||
Remeasurement of post employment benefit obligations | (36,907) | (67,601) | (38,263) |
Income tax relating to remeasurement of post employment benefit obligations | 10,790 | 19,312 | 9,259 |
Remeasurement of post employment benefit obligations from participation in non-consolidated companies | 15,081 | (18,918) | (3,780) |
Other comprehensive loss for the year, net of tax | (122,577) | (129,859) | (484,282) |
Total comprehensive income for the year | 745,294 | 500,186 | 1,177,850 |
Attributable to: | |||
Owners of the parent | 666,667 | 445,473 | 1,176,964 |
Non-controlling interest | $ 78,627 | $ 54,713 | $ 886 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Non-current assets | |||
Property, plant and equipment, net | $ 6,504,681 | $ 6,539,581 | |
Intangible assets, net | 908,583 | 943,838 | |
Investments in non-consolidated companies | 471,306 | 513,648 | |
Other investments | 2,881 | 3,253 | |
Deferred tax assets | 158,703 | 163,538 | |
Receivables, net | 243,306 | 592,565 | |
Trade receivables, net | 0 | 897 | |
Non-current assets | 8,289,460 | 8,757,320 | |
Current assets | |||
Receivables, net | 288,609 | 334,713 | |
Derivative financial instruments | 1,572 | 1,196 | |
Inventories, net | 2,001,781 | 2,158,298 | |
Trade receivables, net | 918,438 | 949,672 | |
Other investments | 813,527 | 212,271 | |
Cash and cash equivalents | [1] | 537,882 | 519,965 |
Current assets other than non-current assets or disposal groups classified as held for sale or as held for distribution to owners | 4,561,809 | 4,176,115 | |
Non-current assets classified as held for sale | 4,966 | 2,098 | |
Current assets | 4,566,775 | 4,178,213 | |
Total Assets | 12,856,235 | 12,935,533 | |
EQUITY | |||
Capital and reserves attributable to the owners of the parent | 7,286,115 | 6,611,665 | |
Non-controlling interest | 1,157,038 | 1,103,208 | |
Total Equity | 8,443,153 | 7,714,873 | |
Non-current liabilities | |||
Provisions | 80,570 | 613,352 | |
Deferred tax liabilities | 346,485 | 403,278 | |
Other liabilities | 551,856 | 507,603 | |
Trade payables | 1,145 | 1,174 | |
Derivative financial instruments | 523 | 17 | |
Lease liabilities | 251,617 | 298,219 | |
Borrowings | 1,327,289 | 1,628,892 | |
Non-current liabilities | 2,559,485 | 3,452,535 | |
Current liabilities | |||
Current income tax liabilities | 110,499 | 47,053 | |
Other liabilities | 249,836 | 240,934 | |
Trade payables | 1,049,337 | 876,803 | |
Derivative financial instruments | 5,835 | 3,007 | |
Lease liabilities | 42,486 | 40,546 | |
Borrowings | 395,604 | 559,782 | |
Current liabilities | 1,853,597 | 1,768,125 | |
Total Liabilities | 4,413,082 | 5,220,660 | |
Total Equity and Liabilities | $ 12,856,235 | $ 12,935,533 | |
[1] | It includes restricted cash of $54, $69 and $2,216 as of December 31, 2020, 2019 and 2018, respectively. In addition, the Company had other investments with a maturity of more than three months for $813,527, $212,271 and $44,529 as of December 31, 2020, 2019 and 2018, respectively. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, AdjustmentIFRS 9 | Cumulative Effect, Period of Adoption, AdjustmentIAS 29 | Cumulative Effect, Period of Adoption, Adjusted Balance | Capital stock | Capital stockCumulative Effect, Period of Adoption, Adjusted Balance | [1],[2] | Treasury shares | Treasury sharesCumulative Effect, Period of Adoption, Adjusted Balance | [1],[2] | Initial public offering expenses | Initial public offering expensesCumulative Effect, Period of Adoption, Adjusted Balance | [1] | Reserves | ReservesCumulative Effect, Period of Adoption, AdjustmentIFRS 9 | [1],[3] | ReservesCumulative Effect, Period of Adoption, Adjusted Balance | [1],[3] | Capital stock issue discount | Capital stock issue discountCumulative Effect, Period of Adoption, Adjusted Balance | [1],[4] | Currency translation adjustment | Currency translation adjustmentCumulative Effect, Period of Adoption, Adjusted Balance | [1] | Retained earnings | Retained earningsCumulative Effect, Period of Adoption, AdjustmentIFRS 9 | [1] | Retained earningsCumulative Effect, Period of Adoption, AdjustmentIAS 29 | [1] | Retained earningsCumulative Effect, Period of Adoption, Adjusted Balance | [1] | Total | TotalCumulative Effect, Period of Adoption, AdjustmentIFRS 9 | [1] | TotalCumulative Effect, Period of Adoption, AdjustmentIAS 29 | [1] | TotalCumulative Effect, Period of Adoption, Adjusted Balance | [1] | Non-controlling interest | Non-controlling interestCumulative Effect, Period of Adoption, AdjustmentIFRS 9 | Non-controlling interestCumulative Effect, Period of Adoption, AdjustmentIAS 29 | Non-controlling interestCumulative Effect, Period of Adoption, Adjusted Balance | Acquisition reserve | ||||||||||
Beginning balance at Dec. 31, 2017 | $ 5,852,771 | $ 507 | $ 690,326 | $ 6,543,604 | $ 2,004,743 | [1],[2] | $ 2,004,743 | $ (150,000) | [1],[2] | $ (150,000) | $ (23,295) | [1] | $ (23,295) | $ 1,416,121 | [1],[3] | $ 450 | $ 1,416,571 | $ (2,324,866) | [1],[4] | $ (2,324,866) | $ (2,403,664) | [1] | $ (2,403,664) | $ 6,491,385 | [1] | $ (147) | $ 421,502 | $ 6,912,740 | $ 5,010,424 | [1] | $ 303 | $ 421,502 | $ 5,432,229 | $ 842,347 | $ 204 | $ 268,824 | $ 1,111,375 | ||||||||||||||||
Changes in equity [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit for the year | 1,662,132 | 1,506,647 | [1] | 1,506,647 | [1] | 155,485 | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | (449,981) | (298,813) | [1] | (298,813) | [1] | (151,168) | |||||||||||||||||||||||||||||||||||||||||||||||
Remeasurement of post employment benefit obligations | (32,784) | (29,418) | [1],[3] | (29,418) | [1] | (3,366) | |||||||||||||||||||||||||||||||||||||||||||||||
Cash flow hedges and others, net of tax | (205) | (288) | [1],[3] | (288) | [1] | 83 | |||||||||||||||||||||||||||||||||||||||||||||||
Others | (1,312) | (1,164) | [1],[3] | (1,164) | [1] | (148) | |||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income for the year | 1,177,850 | (30,870) | [1],[3] | (298,813) | [1] | 1,506,647 | [1] | 1,176,964 | [1] | 886 | |||||||||||||||||||||||||||||||||||||||||||
Dividends paid in cash | [5] | (215,938) | (215,938) | [1] | (215,938) | [1] | 0 | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends paid in cash to non-controlling interest | [6] | (20,940) | (20,940) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2018 | $ 7,484,576 | 2,004,743 | [1],[2],[7] | $ (150,000) | [1],[2],[7] | (23,295) | [1] | 1,385,701 | [1],[3],[8] | (2,324,866) | [9],[10] | (2,702,477) | [1] | 8,203,449 | [1] | 6,393,255 | [1] | 1,091,321 | |||||||||||||||||||||||||||||||||||
Other comprehensive income [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends paid, per share (in dollars per share) | $ 0.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends paid, USD per ADS (in dollars per share) | $ 1.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends not paid on Treasury Shares | $ 4,600 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares authorised (in shares) | 3,500,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Par value per share (in dollars per share) | $ 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued (in shares) | 2,004,743,442 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares in entity held by entity or by its subsidiaries or associates | 41,666,666 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal reserve | $ 200,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Undistributable reserve | 1,400,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve of cash flow hedges, net of tax | 500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other reserves | $ (88,500) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit for the year | 630,045 | 564,269 | [10] | 564,269 | [10] | 65,776 | |||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | (61,925) | (57,569) | [10] | (57,569) | [10] | (4,356) | |||||||||||||||||||||||||||||||||||||||||||||||
Remeasurement of post employment benefit obligations | (67,207) | (60,730) | [8],[10] | (60,730) | [10] | (6,477) | |||||||||||||||||||||||||||||||||||||||||||||||
Cash flow hedges and others, net of tax | (525) | (268) | [8],[10] | (268) | [10] | (257) | |||||||||||||||||||||||||||||||||||||||||||||||
Others | (202) | (229) | [8],[10] | (229) | [10] | 27 | |||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income for the year | 500,186 | (61,227) | [8],[10] | 0 | [9],[10] | (57,569) | [10] | 564,269 | [10] | 445,473 | [10] | 54,713 | |||||||||||||||||||||||||||||||||||||||||
Dividends paid in cash | [11] | (235,569) | (235,569) | [10] | (235,569) | [10] | 0 | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends paid in cash to non-controlling interest | [12] | (28,530) | (28,530) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of non-controlling interest | (5,790) | 8,506 | [8],[10],[13] | 8,506 | [10],[13] | (14,296) | [13] | ||||||||||||||||||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2019 | $ 7,714,873 | 2,004,743 | [7],[10],[14],[15] | $ (150,000) | [7],[10],[14],[15] | (23,295) | [10],[14] | 1,332,980 | [8],[10],[14],[16] | (2,324,866) | [9],[10],[14] | (2,760,046) | [10],[14] | 8,532,149 | [10],[14] | 6,611,665 | [10],[14] | 1,103,208 | |||||||||||||||||||||||||||||||||||
Other comprehensive income [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends paid, per share (in dollars per share) | $ 0.12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends paid, USD per ADS (in dollars per share) | $ 1.20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends not paid on Treasury Shares | $ 5,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares authorised (in shares) | 3,500,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Par value per share (in dollars per share) | $ 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued (in shares) | 2,004,743,442 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares in entity held by entity or by its subsidiaries or associates | 41,666,666 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal reserve | $ 200,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Undistributable reserve | 1,400,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve of cash flow hedges, net of tax | (100) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other reserves | (80,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit for the year | 867,871 | 778,468 | [14] | 778,468 | [14] | 89,403 | |||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | (108,919) | (100,983) | [14] | (100,983) | [14] | (7,936) | |||||||||||||||||||||||||||||||||||||||||||||||
Remeasurement of post employment benefit obligations | (11,036) | (9,340) | [14],[16] | (9,340) | [14] | (1,696) | |||||||||||||||||||||||||||||||||||||||||||||||
Cash flow hedges and others, net of tax | (186) | (95) | [14],[16] | (95) | [14] | (91) | |||||||||||||||||||||||||||||||||||||||||||||||
Others | (2,436) | (1,383) | [14],[16] | (1,383) | [14] | (1,053) | |||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income for the year | 745,294 | (10,818) | [14],[16] | (100,983) | [14] | 778,468 | [14] | 666,667 | [14] | 78,627 | |||||||||||||||||||||||||||||||||||||||||||
Acquisition of non-controlling interest | [17] | (17,014) | 7,783 | [14],[16] | 7,783 | [14] | (24,797) | ||||||||||||||||||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2020 | $ 8,443,153 | $ 2,004,743 | [14],[15] | $ (150,000) | [14],[15] | $ (23,295) | [14] | $ 1,329,945 | [14],[16] | $ (2,324,866) | [14],[18] | $ (2,861,029) | [14] | $ 9,310,617 | [14] | $ 7,286,115 | [14] | $ 1,157,038 | |||||||||||||||||||||||||||||||||||
Other comprehensive income [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares authorised (in shares) | 3,500,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Par value per share (in dollars per share) | $ 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued (in shares) | 2,004,743,442 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares in entity held by entity or by its subsidiaries or associates | 41,666,666 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal reserve | $ 200,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Undistributable reserve | 1,400,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve of cash flow hedges, net of tax | $ (200) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other reserves | $ (72,200) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[1] | Shareholders’ equity is determined in accordance with accounting principles generally accepted in Luxembourg. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[2] | The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $1.00 per share. As of December 31, 2018, there were 2,004,743,442 shares issued. All issued shares are fully paid. Also, as of December 31, 2018, the Company held 41,666,666 shares as treasury shares. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[3] | Include mainly legal reserve under Luxembourg law for $200.5 million, undistributable reserves under Luxembourg law for $1.4 billion, hedge accounting reserve, net of tax effect, for $0.5 million and reserves related to the acquisition of non-controlling interest in subsidiaries for $(88.5) million. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[4] | Represents the difference between book value of non-monetary contributions received from shareholders under Luxembourg GAAP and IFRS. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[5] | Represents $0.11 per share ($1.10 per ADS). Related to the dividends distributed on May 2, 2018, and as 41,666,666 shares are held as treasury shares by Ternium, the dividends attributable to these treasury shares amounting to $4.6 million were included in equity as less dividend paid. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[6] | Corresponds to the dividends paid by Ternium Argentina S.A. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[7] | The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $1.00 per share. As of December 31, 2019, there were 2,004,743,442 shares issued. All issued shares are fully paid. Also, as of December 31, 2019, the Company held 41,666,666 shares as treasury shares. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[8] | Include mainly legal reserve under Luxembourg law for $200.5 million, undistributable reserves under Luxembourg law for $1.4 billion, hedge accounting reserve, net of tax effect, for $(0.1) million and reserves related to the acquisition of non-controlling interest in subsidiaries for $(80.0) million. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[9] | Represents the difference between book value of non-monetary contributions received from shareholders under Luxembourg GAAP and IFRS. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[10] | Shareholders’ equity is determined in accordance with accounting principles generally accepted in Luxembourg. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[11] | Represents $0.12 per share ($1.20 per ADS). Related to the dividends distributed on May 6, 2019, and as 41,666,666 shares are held as treasury shares by Ternium, the dividends attributable to these treasury shares amounting to $5.0 million were included in equity as less dividend paid. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[12] | Corresponds to the dividends paid by Ternium Argentina S.A. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[13] | Corresponds to the acquisition of non-controlling interest participation of Ternium Argentina S.A.. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[14] | Shareholders’ equity determined in accordance with accounting principles generally accepted in Luxembourg is disclosed in Note 24 (iii). | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[15] | The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $1.00 per share. As of December 31, 2020, there were 2,004,743,442 shares issued. All issued shares are fully paid. Also, as of December 31, 2020, the Company held 41,666,666 shares as treasury shares. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[16] | Include mainly legal reserve under Luxembourg law for $200.5 million, undistributable reserves under Luxembourg law for $1.4 billion, hedge accounting reserve, net of tax effect, for $(0.2) million and reserves related to the acquisition of non-controlling interest in subsidiaries for $(72.2) million. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[17] | Corresponds to the acquisition of non-controlling interest participation of Ternium Argentina S.A.. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[18] | Represents the difference between book value of non-monetary contributions received from shareholders under Luxembourg GAAP and IFRS. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||||
Cash flows from operating activities | ||||||
Profit for the year | $ 867,871 | $ 630,045 | $ 1,662,132 | |||
Adjustments for: | ||||||
Depreciation and amortization | 631,051 | 661,112 | 589,299 | |||
Income tax accruals less payments | 66,561 | (208,805) | (154,366) | |||
Equity in earnings of non-consolidated companies | (57,555) | (60,967) | (102,772) | |||
Interest accruals less payments | 6,991 | 3,405 | (13,014) | |||
ICMS provision recovery, net of reversal of related asset | (186,010) | 0 | 0 | |||
Changes in provisions | 623 | (1,544) | (7,659) | |||
Changes in working capital | [1] | 352,795 | 572,684 | (228,577) | ||
Net foreign exchange results and others | 78,919 | 51,689 | (5,778) | |||
Net cash provided by operating activities | 1,761,246 | 1,647,619 | 1,739,265 | |||
Cash flows from investing activities | ||||||
Capital expenditures | (560,013) | (1,052,252) | (520,250) | |||
Recovery/(Loans) to non-consolidated companies | 0 | 24,480 | ||||
Recovery/(Loans) to non-consolidated companies | (24,480) | |||||
(Increase)/Decrease in other investments | (600,884) | (163,800) | 86,857 | |||
Proceeds from the sale of property, plant and equipment | 1,044 | 788 | 861 | |||
Acquisition of non-controlling interest | (17,014) | (5,790) | 0 | |||
Net cash used in investing activities | (1,176,867) | (1,196,574) | (457,012) | |||
Cash flows from financing activities | ||||||
Dividends paid in cash to company’s shareholders | 0 | (235,569) | (215,938) | |||
Dividends paid in cash to non-controlling interests | 0 | (28,530) | (20,940) | |||
Finance lease payments | (42,144) | (38,569) | (7,565) | |||
Proceeds from borrowings | 245,668 | 1,529,766 | 1,188,731 | |||
Repayments of borrowings | (709,778) | (1,377,605) | (2,266,560) | |||
Net cash used in financing activities | (506,254) | (150,507) | (1,322,272) | |||
Increase (Decrease) in cash and cash equivalents | 78,125 | 300,538 | (40,019) | |||
Movement in cash and cash equivalents | ||||||
Beginning of period | 519,965 | [2] | 250,541 | [2] | 337,779 | |
Effect of exchange rate changes and inflation adjustment | (60,208) | (31,114) | (47,219) | |||
End of period | [2] | 537,882 | 519,965 | 250,541 | ||
Non-cash transactions: | ||||||
Acquisition of PP&E under lease contract agreements | 6,101 | 21,963 | 73,828 | |||
Non-cash items impacting working capital | (18,000) | (70,000) | (74,500) | |||
Restricted cash | 54 | 69 | 2,216 | |||
Other deposits with maturity of more than three months | $ 813,527 | $ 212,271 | $ 44,529 | |||
[1] | The working capital is impacted by non-cash movement of $ (18.0) million as of December 31, 2020 ($(70.0) million and $(74.5) million as of December 31, 2019 and 2018, respectively) due to the variations in the exchange rates used by subsidiaries with functional currencies different from the U.S. dollar. | |||||
[2] | It includes restricted cash of $54, $69 and $2,216 as of December 31, 2020, 2019 and 2018, respectively. In addition, the Company had other investments with a maturity of more than three months for $813,527, $212,271 and $44,529 as of December 31, 2020, 2019 and 2018, respectively. |
GENERAL INFORMATION
GENERAL INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of general information about financial statements [Abstract] | |
GENERAL INFORMATION | 1. GENERAL INFORMATION Ternium S.A. (the “Company” or “Ternium”), was incorporated on December 22, 2003 to hold investments in flat and long steel manufacturing and distributing companies. The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $1.00 per share. As of December 31, 2020, there were 2,004,743,442 shares issued. All issued shares are fully paid. Ternium’s American Depositary Shares ("ADSs") trade on the New York Stock Exchange under the symbol “TX”. The Company was initially established as a public limited liability company (société anonyme) under Luxembourg’s 1929 holding company regime. Until termination of such regime on December 31, 2010, holding companies incorporated under the 1929 regime (including the Company) were exempt from Luxembourg corporate and withholding tax over dividends distributed to shareholders. On January 1, 2011, the Company became an ordinary public limited liability company (société anonyme) and, effective as from that date, the Company is subject to all applicable Luxembourg taxes (including, among others, corporate income tax on its worldwide income) and its dividend distributions will generally be subject to Luxembourg withholding tax. However, dividends received by the Company from subsidiaries in high income tax jurisdictions, as defined under Luxembourg law, will continue to be exempt from corporate income tax in Luxembourg under Luxembourg’s participation exemption. As part of the Company’s corporate reorganization in connection with the termination of Luxembourg’s 1929 holding company regime, on December 6, 2010, the Company contributed its equity holdings in all its subsidiaries and all its financial assets to its Luxembourg wholly-owned subsidiary Ternium Investments S.à.r.l., or Ternium Investments, in exchange for newly issued corporate units of Ternium Investments. As the assets contributed were recorded at their historical carrying amount in accordance with Luxembourg GAAP, the Company’s December 2010 contribution of such assets to Ternium Investments resulted in a non-taxable revaluation of the accounting value of the Company’s assets under Luxembourg GAAP. The amount of the December 2010 revaluation was equal to the difference between the historical carrying amounts of the assets contributed and the value at which such assets were contributed and amounted to $4.0 billion. However, for the purpose of these consolidated financial statements, the assets contributed by Ternium to its wholly-owned subsidiary Ternium Investments were recorded based on their historical carrying amounts in accordance with IFRS, with no impact on the financial statements. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of notes and other explanatory information [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION a) Basis of presentation These consolidated financial statements have been prepared in accordance with IFRS (International Financial Reporting Standards) issued and effective or issued and early adopted as at the time of preparing these statements (February 2021), as issued by the International Accounting Standards Board and in conformity with International Financial Reporting Standards as adopted by the European Union (“EU”). These consolidated financial statements are presented in thousands of United States dollars (“$”), except otherwise indicated. These Consolidated financial statements fairly present the consolidated equity and consolidated financial situation of Ternium as of December 31, 2020, and the consolidated results of its operations, the Changes in the Consolidated Statement of Comprehensive Income, the Changes in Consolidated Net Equity and the Consolidated Cash Flows of Ternium for the year then ended. Elimination of all material intercompany transactions and balances between the Company and their respective subsidiaries has been made in consolidation. These consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss. These consolidated financial statements have been approved for issue by the Board of Directors on February 23, 2021. The Directors have the power to amend and reissue the consolidated financial statements. Detailed below are the companies whose financial statements have been consolidated and accounted for interest in these consolidated financial statements. 2. BASIS OF PRESENTATION (continued) Company Country of Organization Main activity Percentage of ownership 2020 2019 2018 Ternium S.A. Luxembourg Holding 100.00 % 100.00 % 100.00 % Ternium Investments S.à.r.l. Luxembourg Holding 100.00 % 100.00 % 100.00 % Ternium Internacional España S.L. (1) Spain Holding and marketing of steel products 100.00 % 100.00 % 100.00 % Ternium USA Inc. (1) USA Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium Solutions S.A. (formerly Tericer Trading S.A.) (1) Uruguay Other services 100.00 % 100.00 % 100.00 % Ternium Internationaal B.V. (1) Netherlands Marketing of steel products 100.00 % 100.00 % 100.00 % Ternium Argentina S.A. (2) Argentina Manufacturing and selling of flat steel products 62.46 % 61.50 % 60.94 % Impeco S.A. (3) Argentina Manufacturing of pipe products 62.49 % 61.54 % 60.97 % Prosid Investments S.A. (4) Uruguay Holding 62.46 % 61.51 % 60.94 % Ternium Mexico S.A. de C.V. (5) Mexico Manufacturing and selling of steel products 89.21 % 88.94 % 88.78 % Hylsa S.A. de C.V. (6) Mexico Manufacturing and selling of steel products 89.21 % 88.94 % 88.78 % Las Encinas S.A. de C.V. (6) Mexico Exploration, exploitation and pelletizing of iron ore 89.21 % 88.94 % 88.78 % Ferropak Comercial S.A. de C.V. (6) Mexico Scrap services company 89.21 % 88.94 % 88.78 % Transamerica E. & I. Trading Corp. (6) USA Scrap services company 89.21 % 88.94 % 88.78 % Técnica Industrial S.A. de C.V. (6) Mexico Services 89.21 % 88.94 % 88.78 % Galvacer Chile S.A. (6) Chile Distributing company 89.21 % 88.94 % 88.78 % Ternium Gas México S.A. de C.V. (7) Mexico Energy services company 89.21 % 88.94 % 88.78 % Consorcio Minero Benito Juarez Peña Colorada S.A.de C.V. (8) Mexico Exploration, exploitation and pelletizing of iron ore 44.61 % 44.47 % 44.39 % Peña Colorada Servicios S.A. de C.V. (8) Mexico Services 44.61 % 44.47 % 44.39 % Exiros B.V. (8) Netherlands Procurement and trading services 50.00 % 50.00 % 50.00 % Servicios Integrales Nova de Monterrey S.A. de C.V. (9) Mexico Medical and Social Services 66.47 % 66.26 % 66.14 % Ternium Internacional Nicaragua S.A. Nicaragua Manufacturing and selling of steel products 99.38 % 99.38 % 99.38 % Ternium Internacional Honduras S.A. de C.V. Honduras Manufacturing and selling of steel products 99.18 % 99.18 % 99.18 % Ternium Internacional El Salvador S.A. de C.V. El Salvador Manufacturing and selling of steel products 99.92 % 99.92 % 99.92 % Ternium Internacional Costa Rica S.A. Costa Rica Manufacturing and selling of steel products 99.98 % 99.98 % 99.98 % Ternium Internacional Guatemala S.A. (10) Guatemala Manufacturing and selling of steel products 99.98 % 99.98 % 99.98 % Ternium Colombia S.A.S. (10) Colombia Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium del Cauca S.A.S. (10) Colombia Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium Siderúrgica de Caldas S.A.S. (10) Colombia Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium del Atlántico S.A.S (10) Colombia Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium Procurement S.A. (10) Uruguay Marketing of steel products and procurement services 100.00 % 100.00 % 100.00 % Technology & Engineering Services S.A. (10) Uruguay Engineering and other services 100.00 % 100.00 % 100.00 % Tenigal S. de R.L. de C.V. (11) Mexico Manufacturing and selling of steel products 51.00 % 51.00 % 51.00 % Ternium Treasury Services S.A. Uruguay Financial Services 100.00 % 100.00 % 100.00 % Soluciones Integrales de Gestión S.A. (12) Argentina Other services 100.00 % 100.00 % 100.00 % 2. BASIS OF PRESENTATION (continued) Company Country of Organization Main activity Percentage of ownership 2020 2019 2018 Ternium Participaçoes S.A. (12) Brazil Holding 100.00 % 100.00 % 100.00 % Ternium Brasil Ltda. (13) Brazil Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium International Inc. (14) Panama Marketing of steel products — 100.00 % 100.00 % Ternium Investments Switzerland AG (15) Switzerland Holding — 100.00 % 100.00 % Ternium Internacional S.A. (16) Uruguay Marketing of steel products — 100.00 % 100.00 % Ternium Staal B.V. (17) Netherlands Holding and marketing of steel products — 100.00 % 100.00 % Imsamex Ecuador S.A. (18) Ecuador Distributing company — — 88.78 % Ternium Solutions A.G. (19) Switzerland Other services — — 100.00 % Ternium Ingeniería y Servicios de México S.A. de C.V. (20) Mexico Engineering and other services — — 99.89 % Ternium International USA Corporation (21) USA Marketing of steel products — — 100.00 % (1) Indirectly through Ternium Investments S.à.r.l. Total voting rights held: 100.00%. (2) Indirectly through Ternium Internacional España S.L. Total voting rights held 62.46%. Before that, indirectly through Ternium Internacional España S.L. total voting rights was 61.50%. in 2019 and 60.94% in 2018. (3) Indirectly through Ternium Argentina S.A. and Soluciones Integrales de Gestión S.A. Total voting rights held 100.00%. (4) Indirectly through Ternium Argentina S.A. and Ternium Procurement S.A. Total voting rights held 100.00%. (5) Indirectly through Ternium Argentina S.A. and Ternium Internacional España S.L. Total voting rights held 100.00%. (6) Indirectly through Ternium Mexico S.A. de C.V. Total voting rights held: 100.00%. (7) Indirectly through Ternium Mexico S.A. de C.V. and Tenigal S. de R.L. de C.V. Total voting rights held: 100.00%. (8) Total voting rights held: 50.00%. The Company recognizes the assets, liabilities, revenue and expenses in relation to its interest in the joint operation. (9) Indirectly through Ternium Mexico S.A. de C.V. Total voting rights held: 74.50%. (10) Indirectly through Ternium Internacional España S.L. Total voting rights held: 100.00%. (11) Indirectly through Ternium Internacional España S.L. Total voting rights held: 51.00%. (12) Indirectly through Ternium Investments S.à r.l. and Ternium Internacional España S.L. Total voting rights held: 100.00%. (13) Since the second quarter of 2020, indirectly through Ternium Internacional España S.L. Total voting rights held: 100.00%. Before that, indirectly through Ternium Investments S.à r.l.. (14) This company was dissolved as of December 7, 2020. (15) This company was dissolved as of December 4, 2020. (16) This company was dissolved as of July 14, 2020. (17) Merged into Ternium Internacional España S.L. as of May 27, 2020, effective as of January 1, 2020. (18) This company was dissolved as of December 19, 2019. (19) This company was dissolved as of July 3, 2019. (20) This company was dissolved as of March 29, 2019. (21) Merged with Ternium USA Inc. during the first quarter of 2019. The most important non-controlling interest is related to the investment in Ternium Argentina S.A., which is a company listed in the Buenos Aires Stock Exchange (see note 30). All the information related to this investment could be found in the Buenos Aires Stock Exchange webpage. |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of significant accounting policies [Abstract] | |
ACCOUNTING POLICIES | ACCOUNTING POLICIES The following is a summary of the principal accounting policies followed in the preparation of these Consolidated Financial Statements: (a) Group accounting (1) Subsidiary companies and transactions with non-controlling interests Subsidiaries are all entities over which the Company has control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases. The Company uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at the fair values at the acquisition date. Indemnification assets are recognized at the same time that the Company recognizes the indemnified item and measures them on the same basis as the indemnified item, subject to the need for a valuation allowance for uncollectible amounts. The Company measures the value of a reacquired right recognized as an intangible asset on the basis of the remaining contractual term of the related contract regardless of whether market participants would consider potential contractual renewals in determining its fair value. On an acquisition-by-acquisition basis, the Company recognizes any non-controlling interest in the acquiree at the non-controlling interest's proportionate share of the acquiree's net assets. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Company's share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognized directly in the income statement. The measurement period is the earlier of the date that the acquirer receives the information that it is looking for or cannot obtain the information and one year after the acquisition date. Where the accounting for a business combination is not complete by the end of the reporting period in which the business combination occurred provisional amounts are reported. The Company treats transactions with non-controlling interests as transactions with equity owners of the Company. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. 3. ACCOUNTING POLICIES (continued) When the Company ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss. Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. However, the fact that the functional currency of some subsidiaries is their respective local currency, generates some financial gains (losses) arising from intercompany transactions, that are included in the consolidated income statement under Other financial expenses, net. (2) Investments in non-consolidated companies Associated companies are those entities in which Ternium has significant influence, but which it does not control. Joint arrangements are understood as combinations in which there are contractual agreements by virtue of which two or more companies hold an interest in companies that undertake operations or hold assets in such a way that any financial or operating decision is subject to the unanimous consent of the partners. A joint arrangement is classed as a joint operation if the parties hold rights to its assets and have obligations in respect of its liabilities or as a joint venture if the venturers hold rights only to the investee's net assets. Investments in non-consolidated companies (associated companies and joint ventures) are accounted for using the equity method of accounting. Under this method, interests in joint ventures and associates are initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the Company’s share of the post-acquisition profits or losses in the income statement, and its share of post-acquisition changes in reserves recognized in reserves and in other comprehensive income in the income statement. Unrealized gains on transactions among the Company and its non-consolidated companies are eliminated to the extent of the Company’s interest in such non-consolidated companies; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. When the Company’s share of losses in a non-consolidated company equals or exceeds its interest in such non-consolidated company, the Company does not recognize further losses unless it has incurred obligations or made payments on behalf of such non-consolidated company. The Company’s investment in associates and joint ventures includes notional goodwill identified on acquisition. The Company determines at each reporting date whether there is any objective evidence that the investment is impaired. If this is the case, the group calculates the amount of impairment as the difference between the recoverable amount of the investment and its carrying value and recognizes the amount within “Equity on earnings (losses) of non-consolidated companies”. 3. ACCOUNTING POLICIES (continued) (b) Foreign currency translation (1) Functional and presentation currency Items included in the financial statements of each of the Company's subsidiaries and associated companies are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). Except for the non-consolidated companies whose functional currencies are their local currencies, Ternium determined that the functional currency of its subsidiaries is the U.S. dollar. Although Ternium is located in Luxembourg, it operates in several countries with different currencies. The $ is the currency that best reflects the economic substance of the underlying events and circumstances relevant to Ternium as a whole. (2) Subsidiary companies The results and financial position of all the group entities (except for the ones which operated in a hyperinflationary economy) that have a functional currency different from the presentation currency, are translated into the presentation currency as follows: (i) assets and liabilities are translated at the closing rate of each statement of financial position; (ii) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and (iii) all resulting translation differences are recognized within other comprehensive income. In the case of a sale or other disposition of any such subsidiary, any accumulated translation differences would be recognized in the income statement as part of the gain or loss on sale. (3) Transactions in currencies other than the functional currency Transactions in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the date of the transactions or valuation where items are re-measured. At the end of each reporting period: (i) monetary items denominated in currencies other than the functional currency are translated using the closing rates, (ii) non-monetary items that are measured in terms of historical cost in a currency other than the functional currency are translated using the exchange rates prevailing at the date of the transactions; and (iii) non-monetary items that are measured at fair value in a currency other than the functional currency are translated using the exchange rates prevailing at the date when the fair value was determined. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in currencies other than the functional currency are recorded as gains and losses from foreign exchange and included in "Other financial income (expenses), net" in the consolidated income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the "fair value gain or loss," while translation differences on non-monetary financial assets such as equities classified as fair value through other comprehensive income are included in other gains/(losses). 3. ACCOUNTING POLICIES (continued) (c) Financial instruments Non derivative financial instruments Non derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables. The Company classifies its financial instruments in the following measurement categories: – Amortized cost: instruments that are held for collection or repayment of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income and expenses from these financial instruments are included in finance income or expense using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in finance income or expense, together with foreign exchange gains and losses. Impairment losses are presented as separate line items in the statement of profit or loss. – Fair value through other comprehensive income (“FVOCI”): financial assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the statement of profit or loss. – Fair value through profit or loss (“FVPL”): financial instruments that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented net within other gains/(losses) in the period in which it arises. The classification depends on the Company’s business model for managing the financial instruments and the contractual terms of the cash flows. For financial instruments measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at FVOCI. At initial recognition, the Company measures a financial instrument at its fair value plus, in the case of a financial instrument not at FVPL, transaction costs that are directly attributable to the acquisition of the financial instrument. Transaction costs of financial instruments carried at FVPL are expensed in profit or loss. Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. 3. ACCOUNTING POLICIES (continued) The classification depended on the nature and purpose of the financial assets and was determined at the time of initial recognition. Financial assets and liabilities were recognized and derecognized on the settlement date. Financial assets were initially measured at fair value, net of transaction costs, except for those financial assets classified as financial assets at fair value through profit or loss. Financial liabilities, including borrowings, were initially measured at fair value, net of transaction costs and subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis. Impairment of financial assets The Company assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the receivables, see note 3 (i) for further details. For loans and receivables category and for held-to-maturity investments, the amount of the loss was measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset was reduced and the amount of the loss was recognized in the consolidated income statement. If, in a subsequent period, the amount of the impairment loss decreased and the decrease could be related objectively to an event occurring after the impairment was recognized, the reversal of the previously recognized impairment loss was recognized in the consolidated income statement. Derivative financial instruments Information about accounting for derivative financial instruments and hedging activities is included in Note 28 "Financial Risk management" and Note 3 (y). 3. ACCOUNTING POLICIES (continued) (d) Property, plant and equipment (1) Property, plant and equipment Land and buildings comprise mainly factories and offices. All property, plant and equipment are recognized at historical acquisition or construction cost less accumulated depreciation and accumulated impairment (if applicable), except for land, which is carried at acquisition cost less accumulated impairment (if applicable). There are no material residual values for property, plant and equipment items. Major overhaul and rebuilding expenditures are recognized as a separate asset when future economic benefits are expected from the item, and the cost can be measured reliably. Ordinary maintenance expenses on manufacturing properties are recorded as cost of products sold in the period in which they are incurred. Where a tangible fixed asset comprises major components having different useful lives, these components are accounted for as separate items. Spare parts are included in property, plant and equipment. Depreciation method is reviewed at each year end. Depreciation is calculated using the straight-line method to amortize the cost of each asset to its residual value over its estimated useful life as follows: Land No depreciation Buildings and improvements 10-50 years Production equipment 5-40 years Vehicles, furniture and fixtures and other equipment 3-20 years Property, plant and equipment used in mining activities are depreciated over its useful life or over the remaining life of the mine if shorter and there is no alternative use possible. The assets' useful lives are reviewed, and adjusted if appropriate, at each year end. The re-estimation of assets useful lives by the Company did not materially affect depreciation charges in 2020, 2019 and 2018. Gains and losses on disposals are determined by comparing the proceeds with the corresponding carrying amounts and are included in the income statement. If the carrying amount of an asset were greater than its estimated recoverable amount, it would be written down to its recoverable amount (see Note 3 (f) "Impairment"). Amortization charges are included in cost of sales, selling, general and administrative expenses. 3. ACCOUNTING POLICIES (continued) (2) Right-of-use assets The Company is a party to lease contracts for: – Land – Plants and equipment for the production of industrial gases and other production materials. – Transportation and maintenance equipment. – Warehouses and office spaces. These leases are recognized, measured and presented in accordance to IFRS 16 “Leases”, following the guidelines described below. Accounting by the lessee The Company recognizes a right-of-use asset and a lease liability at the commencement date of each lease contract that grants the right to control the use of an identified asset during a period of time. The commencement date is the date in which the lessor makes an underlying asset available for use by the lessee. The Company applied exemptions for leases with a duration lower than 12 months, with a value lower than thirty thousand dollars and/or with clauses related to variable payments. These leases have been considered as short-term leases and, accordingly, no right-of-use asset or lease liability have been recognized. At initial recognition, the right-of-use asset is measured considering: – The value of the initial measurement of the lease liability; – Any lease payments made at or before the commencement date, less any lease incentives; and – Any initial direct costs incurred by the lessee. After initial recognition, the right-of-use assets are measured at cost, less any accumulated depreciation and/or impairment losses, and adjusted for any re-measurement of the lease liability. Depreciation of the right-of-use asset is calculated using the straight-line method over the estimated duration of the lease contract, as follows: Buildings and facilities 1-29 years Machinery 1-12 years If the lease transfers ownership of the underlying asset to the Company by the end of the lease term, or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. Accounting by the lessor When the Company is acting as a lessor, each of its leases is classified as either operating or finance lease: – Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. – Leases where all substantial risks and rewards of ownership are transferred by the lessor to the lessee are classified as finance leases. 3. ACCOUNTING POLICIES (continued) (e) Intangible assets (1) Information system projects Generally, costs associated with developing or maintaining computer software programs are recognized as an expense as incurred. However, costs directly related to the acquisition and implementation of information systems are recognized as intangible assets if they have a probable economic benefit exceeding the cost beyond one year and comply with the recognition criteria of IAS 38. Information system projects recognized as assets are amortized using the straight-line method over their useful lives, not exceeding a period of 3 years. Amortization charges are included in cost of sales, selling, general and administrative expenses. (2) Mining assets Mining assets include: (a) Mining licenses acquired; (b) Capitalized exploration and evaluation costs, reclassified from exploration and evaluation costs (see note 3 (e) 3); and (c) Capitalized developmental stripping costs (see note 3 (u)). Mining licenses were recognized as separate intangible assets upon the acquisition of the investment in Mexico and comprise the right to exploit the mines and are recognized at its fair value at acquisition date less accumulated amortization. These mining concessions were granted for a 50-year period; following the expiration of the initial concession term, the concessions are renewable for an additional 50-year term in accordance with, and subject to the procedures set forth in, applicable Mexican mining law. Amortization charge is calculated by using the unit-of-production method, on the basis of actual mineral extracted in each period compared to the estimated mineral reserves, and is included in cost of sales. Any change in the estimation of reserves is accounted for prospectively. The resulting amortization rate for the years ended December 31, 2020, 2019 and 2018, is approximately 4%, 5% and 8% per year, respectively. 3. ACCOUNTING POLICIES (continued) (3) Exploration and evaluation costs Exploration and evaluation activities involve the search for iron ore resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation costs are measured at cost. Costs directly associated with exploration and evaluation activities are capitalized as intangible assets until the determination of reserves is evaluated. The costs associated to the acquisition of machinery and equipment are recognized as property, plant and equipment. If it is determined that commercial discovery has been achieved, costs incurred are reclassified into Mining assets and amortization starts once production begins. Exploration costs are tested for impairment annually or whenever there are indicators that impairment exists. Indicators of impairment include, but are not limited to: – Rights to explore in an area have expired or will expire in the near future without renewal; – No further exploration and evaluation is planned or budgeted; – A decision to discontinue exploration and evaluation in an area because of the absence of commercial reserves; and – Sufficient data exists to indicate that the book value will not be fully recovered from future development and production. When analyzing the existence of impairment indicators, the exploration and evaluation areas from the mining cash-generating units will be evaluated. (4) Goodwill Goodwill represents the excess of the acquisition cost over the fair value of Ternium's participation in acquired companies' net assets at the acquisition date. Under IFRS 3, goodwill is considered to have an indefinite life and not amortized, but is subject to annual impairment testing. Goodwill is allocated to Cash-generating units ("CGU") for the purpose of impairment testing. The allocation is made to those cash-generating units expected to benefit from the business combination which generated the goodwill being tested. The impairment losses on goodwill cannot be reversed. As of December 31, 2020 and 2019, the carrying amount of goodwill allocated to the Mexico CGUs was $662.3 million, of which $619.8 million corresponds to steel operations and $42.5 million to mining operations. (5) Research and development Research expenditures are recognized as expenses as incurred. Development costs are recorded as cost of sales in the income statement as incurred because they do not fulfill the criteria for capitalization. Research and development expenditures for the years ended December 31, 2020, 2019 and 2018 totaled $8.3 million, $10.0 million and $8.9 million, respectively. 3. ACCOUNTING POLICIES (continued) (6) Customer relationships acquired in a business combination In accordance with IFRS 3 and IAS 38, Ternium has recognized the value of customer relationships separately from goodwill in connection with the acquisitions of Grupo Imsa and Ternium Colombia S.A.S. These customer relationships were amortized using the straight-line method over a useful life of approximately 10 years. As of December 31, 2018, these assets were fully amortized. In accordance with IFRS 3 and IAS 38, Ternium has recognized the value of customer relationships in connection with the acquisition of Ternium Staal B.V. as of September 7, 2017. The value of the slab commitment agreement by which Ternium Investments S.à r.l. is entitled to invoice, under certain conditions, the price difference between slabs and hot rolled coils will be amortized using the units of slabs sold method. (7) Trademarks acquired in a business combination In accordance with IFRS 3 and IAS 38, Ternium has recognized the value of trademarks separately from goodwill in connection with the acquisitions of Grupo Imsa and Ternium Colombia S.A.S. As of December 31, 2018, these assets were fully amortized. Trademarks are amortized using the straight-line method over a useful life of between 5 to 10 years. (f) Impairment Assets that have an indefinite useful life (including goodwill) are not subject to amortization and are tested annually for impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets that are subject to amortization and investments in affiliates are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less cost to sell and the value in use. To carry out these tests, assets are grouped at the lowest levels for which there are separately identifiable cash flows (each, a CGU). When evaluating long-lived assets for potential impairment, the Company estimates the recoverable amount based on the value in use of the corresponding CGU. The value in use of each CGU is determined on the basis of the present value of net future cash flows which will be generated by the assets tested. Determining the present value of future cash flows involves highly sensitive estimates and assumptions specific to the nature of each CGU's activities, including estimates and assumptions relating to amount and timing of projected future cash flows, expected changes in market prices, expected changes in the demand of Ternium products and services, selected discount rate and selected tax rate. Ternium uses, for the steel segment impairment tests, cash flow projections for the next five years based on past performance and expectations of market development; thereafter, it uses a perpetuity rate. For the mining segment impairment tests, Ternium uses cash flow projections for the whole lives of the mines based on past performance and expectations of market development. Application of the discounted cash flow (DCF) method to determine the value in use of a CGU begins with a forecast of all expected future net cash flows. Variables considered in forecasts include the gross domestic product (GDP) growth rates of the country under study and their correlation with steel demand, level of steel prices and estimated raw material costs as observed in industry reports. 3. ACCOUNTING POLICIES (continued) Cash flows are discounted at rates that reflect specific country and currency risks associated with the cash flow projections. The discount rates used are based on the weighted average cost of capital (WACC), which is considered to be a good indicator of cost of capital. As of December 31, 2020 the discount rate used to test goodwill allocated to the Steel and Mining Mexico CGUs for impairment was 8.87% (as of December 31, 2019, 9.80%). As a result of the above factors, actual cash flows and values could vary significantly from the forecasted future cash flows and related values derived using discounting techniques. Based on the information currently available, however, Ternium believes that it is not reasonably possible that the variation would cause the carrying amount to exceed the recoverable amount of the CGUs. Considering the economic situation in Argentina, the increase in the inflation rates, the devaluation of the Argentine peso and a weaker industrial environment as of June 30, 2020, the Company decided to assess the recoverability of its investments in Argentina, resulting in no impairment charges to be recognized. As of June 30, 2020, the discount rate used to test the investment in Argentine subsidiaries for impairment was 14.3% ( 14.3%. as of December 31, 2019). Also, considering the economic situation in Brazil as of June 30, 2020, the Company decided to assess the recoverability of its investments in Brazil, resulting in no impairment charges to be recognized. As of June 30, 2020, the discount rate used to test the investment in the Brazilian subsidiary for impairment was 10.3%. As of December 31, 2020, no new impairment triggers were detected in these CGUs and, consequently, no impairment tests were prepared. During the years 2020, 2019 and 2018, no impairment provisions were recorded in connection with assets that have an indefinite useful life (including goodwill). (g) Other investments Other investments consist primarily of investments in financial debt instruments and equity investments where the Company holds a minor equity interest and does not exert significant influence. All purchases and sales of investments are recognized on the settlement date, which is not significantly different from the trade date, which is the date that Ternium commits to purchase or sell the investment. Income from financial instruments at fair value through profit or loss is recognized in Other financial income (expenses), net in the consolidated income statement. The fair value of quoted investments is based on current bid prices. If the market for a financial investment is not active or the securities are not listed, the Company estimates the fair value by using standard valuation techniques. Dividends from investments in equity instruments are recognized in the income statement when the Company's right to receive payments is established. Certain fixed income financial instruments purchased by the Company have been categorized as at fair value through other comprehensive income. The results of these financial investments are recognized in Finance Income in the Consolidated Income Statement using the effective interest method. Unrealized gains and losses other than impairment and foreign exchange results are recognized in Other comprehensive income. On maturity or disposal, net gain and losses previously deferred in Other comprehensive income are recognized in Finance Income in the Consolidated Income Statement. 3. ACCOUNTING POLICIES (continued) (h) Inventories Inventories are stated at the lower of cost (calculated using the first-in-first-out "FIFO" method) or net realizable value. The cost of finished goods and goods in process comprises raw materials, direct labor, depreciation, other direct costs and related production overhead costs. It excludes borrowing |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of entity's operating segments [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION REPORTABLE OPERATING SEGMENTS The Company is organized in two reportable segments: Steel and Mining. The Steel segment includes the sales of steel products, which comprises slabs, hot rolled coils and sheets, cold rolled coils and sheets, tin plate, welded pipes, hot dipped galvanized and electro-galvanized sheets, pre-painted sheets, billets (steel in its basic, semi-finished state), wire rod and bars and other tailor-made products to serve its customers’ requirements. It also includes the sales of energy. The Steel segment comprises four operating segments: Mexico, Southern Region, Brazil and Other markets. These four segments have been aggregated considering the economic characteristics and financial effects of each business activity in which the entity engages; the related economic environment in which it operates; the type or class of customer for the products; the nature of the products; and the production processes. The Mexico operating segment comprises the Company’s businesses in Mexico. The Southern region operating segment manages the businesses in Argentina, Paraguay, Chile, Bolivia and Uruguay. The Brazil operating segment includes the business generated in Brazil. The Other markets operating segment includes businesses mainly in United States, Colombia, China and Guatemala. The Mining segment includes the sales of mining products, mainly iron ore and pellets, and comprises the mining activities of Las Encinas, an iron ore mining company in which Ternium holds a 100% equity interest and the 50% of the operations and results performed by Peña Colorada, another iron ore mining company in which Ternium maintains that same percentage over its equity interest. Both mining operations are located in Mexico. For Peña Colorada, the Company recognizes its assets, liabilities, revenue and expenses in relation to its interest in the joint operation. Ternium’s Chief Operating Decision Maker (CEO) holds monthly meetings with senior management, in which operating and financial performance information is reviewed, including financial information that differs from IFRS principally as follows: – The use of direct cost methodology to calculate the inventories, while under IFRS is at full cost, including absorption of production overheads and depreciation. – The use of costs based on previously internally defined cost estimates, while, under IFRS, costs are calculated at historical cost (with the FIFO method). – Other timing and non-significant differences. Most information on segment assets is not disclosed as it is not reviewed by the CEO. 4. SEGMENT INFORMATION (continued) Year ended December 31, 2020 Steel Mining Inter-segment eliminations Total IFRS Net sales 8,679,513 390,541 (334,619) 8,735,435 Cost of sales (7,172,635) (268,905) 341,617 (7,099,923) Gross profit 1,506,878 121,636 6,998 1,635,512 Selling, general and administrative expenses (740,056) (22,826) — (762,882) Other operating income, net 208,965 (2,122) — 206,843 Operating income - IFRS 975,787 96,688 6,998 1,079,473 Management view Net sales 8,679,513 384,255 (328,333) 8,735,435 Operating income 1,046,623 101,937 689 1,149,249 Reconciliation items: Differences in Cost of sales (69,776) Operating income - IFRS 1,079,473 Financial income (expense), net 22,331 Equity in earnings (losses) of non-consolidated companies 57,555 Income before income tax expense - IFRS 1,159,359 Depreciation and amortization - IFRS (580,807) (50,244) — (631,051) Year ended December 31, 2019 Steel Mining Inter-segment eliminations Total IFRS Net sales 10,186,171 364,058 (357,411) 10,192,818 Cost of sales (8,552,493) (259,535) 359,588 (8,452,440) Gross profit 1,633,679 104,523 2,177 1,740,378 Selling, general and administrative expenses (885,146) (12,330) — (897,475) Other operating expenses, net 21,931 (268) — 21,663 Operating income - IFRS 770,466 91,924 2,177 864,566 Management view Net sales 10,230,650 417,619 (410,972) 10,237,297 Operating income 841,169 146,636 2,177 989,982 Reconciliation items: Differences in Cost of sales 99,315 Effect of inflation adjustment (Note 3 (cc)) (224,731) Operating income - IFRS 864,566 Financial income (expense), net (98,969) Equity in earnings (losses) of non-consolidated companies 60,967 Income before income tax expense - IFRS 826,564 Depreciation and amortization - IFRS (612,744) (48,368) — (661,112) 4. SEGMENT INFORMATION (continued) Year ended December 31, 2018 Steel Mining Inter-segment eliminations Total IFRS Net sales 11,453,420 282,000 (280,613) 11,454,807 Cost of sales (8,524,890) (239,893) 281,455 (8,483,328) Gross profit 2,928,530 42,107 842 2,971,479 Selling, general and administrative expenses (860,881) (15,883) — (876,764) Other operating expenses, net 12,950 706 — 13,656 Operating income - IFRS 2,080,599 26,930 842 2,108,371 Management view Net sales 11,723,883 333,892 (332,505) 11,725,270 Operating income 1,768,115 91,418 (6,213) 1,853,319 Reconciliation items: Differences in Cost of sales 541,492 Effect of inflation adjustment (Note 3 (cc)) (286,440) Operating income - IFRS 2,108,371 Financial income (expense), net (179,576) Equity in earnings (losses) of non-consolidated companies 102,772 Income before income tax expense - IFRS 2,031,567 Depreciation and amortization - IFRS (537,885) (51,415) — (589,299) GEOGRAPHICAL INFORMATION The Company has revenues attributable to the Company’s country of incorporation (Luxembourg), related to a contract acquired as a part of the acquisition of the participation in Ternium Brasil Ltda. For purposes of reporting geographical information, net sales are allocated based on the customer’s location. Allocation of depreciation and amortization is based on the geographical location of the underlying assets. Year ended December 31, 2020 Mexico Southern region Brazil and Other markets Total Net sales 4,660,278 1,762,785 2,312,372 8,735,435 Non-current assets (1) 4,726,342 919,490 1,767,432 7,413,264 Year ended December 31, 2019 Mexico Southern region Brazil and Other markets Total Net sales 5,477,690 1,704,132 3,010,996 10,192,818 Non-current assets (1) 4,584,802 1,008,860 1,889,757 7,483,419 Year ended December 31, 2018 Mexico Southern region Brazil and Other markets Total Net sales 6,345,137 1,941,168 3,168,502 11,454,807 Non-current assets (1) 4,093,288 1,071,705 1,665,140 6,830,133 (1) Includes Property, plant and equipment and Intangible assets. 4. SEGMENT INFORMATION (continued) REVENUES BY PRODUCT Year ended December 31, 2020 2019 2018 Semi-finished (1) 3,632 51,496 103,099 Slabs 1,047,311 1,753,090 1,818,235 Hot rolled (2) 2,880,055 3,275,941 3,961,144 Cold rolled 1,101,963 1,165,406 1,264,940 Coated (3) 3,015,132 3,263,463 3,506,040 Roll-formed and tubular (4) 413,337 380,688 437,514 Other products (5) 274,005 302,734 363,835 TOTAL SALES 8,735,435 10,192,818 11,454,807 (1) Semi-finished includes billets and round bars. (2) Hot rolled includes hot rolled flat products, merchant bars, reinforcing bars, stirrups and rods. (3) Coated includes tin plate and galvanized products. (4) Roll-formed and tubular includes tubes, beams, insulated panels, roofing and cladding, roof tiles, steel decks and pre-engineered metal building systems. (5) Other products include mainly sales of energy and pig iron. |
COST OF SALES
COST OF SALES | 12 Months Ended |
Dec. 31, 2020 | |
Analysis of income and expense [abstract] | |
COST OF SALES | COST OF SALES Year ended December 31, 2020 2019 2018 Inventories at the beginning of the year 2,158,298 2,689,829 2,550,930 Effect of initial inflation adjustment (Note 3 (cc)) — — 191,708 Translation differences — (21,919) (413,436) Plus: Charges for the year Raw materials and consumables used and 5,359,938 6,165,654 6,961,704 Services and fees 112,924 151,373 158,551 Labor cost 546,045 611,615 699,447 Depreciation of property, plant and equipment 527,283 508,934 456,522 Amortization of intangible assets 14,624 17,805 25,374 Maintenance expenses 371,368 467,090 519,625 Office expenses 6,131 8,513 8,586 Insurance 10,641 9,674 8,769 Change of obsolescence allowance (1,279) 8,413 17,322 Recovery from sales of scrap and by-products (20,892) (23,793) (27,744) Others 16,623 17,550 15,799 Less: Inventories at the end of the year (2,001,781) (2,158,298) (2,689,829) Cost of Sales 7,099,923 8,452,440 8,483,328 |
SELLING, GENERAL AND ADMINISTRA
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 12 Months Ended |
Dec. 31, 2020 | |
Analysis of income and expense [abstract] | |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Year ended December 31, 2020 2019 2018 Services and fees (1) 53,220 79,283 76,066 Labor cost 192,854 215,418 241,552 Depreciation of property, plant and equipment 15,920 16,034 13,561 Amortization of intangible assets 73,224 118,339 93,842 Maintenance and expenses 4,275 4,894 5,096 Taxes 97,075 104,014 95,072 Office expenses 27,314 35,956 35,663 Freight and transportation 283,808 307,958 300,676 Increase (decrease) of allowance for doubtful accounts 336 (293) 1,629 Others 14,856 15,872 13,607 Selling, general and administrative expenses 762,882 897,475 876,764 (1) For the year ended December 31, 2020, it includes fees accrued for professional services rendered by PwC to Ternium S.A. and its subsidiaries that amounted to $3,289, including $3,132 for audit services, $41 for audit-related services, $95 for tax services and $21 for all other services. For the year ended December 31, 2019, it includes fees accrued for professional services rendered by PwC to Ternium S.A. and its subsidiaries that amounted to $3,804, including $3,485 for audit services, $54 for audit-related services, $190 for tax services and $75 for all other services. For the year ended December 31, 2018, it includes fees accrued for professional services rendered by PwC to Ternium S.A. and its subsidiaries that amounted to $4,704, including $3,937 for audit services, $61 for audit-related services, $281 for tax services and $425 for all other services. |
LABOR COSTS (Included Cost of s
LABOR COSTS (Included Cost of sales and Selling, General and Administrative expenses) | 12 Months Ended |
Dec. 31, 2020 | |
Labor Costs [Abstract] | |
LABOR COSTS (Included Cost of sales and Selling, General and Administrative expenses) | LABOR COSTS (Included Cost of sales and Selling, General and Administrative expenses) Year ended December 31, 2020 2019 2018 Wages, salaries and social security costs 677,541 759,678 884,536 Termination benefits 25,265 28,269 26,601 Post-employment benefits (Note 20 (i)) 36,093 39,086 29,862 Labor costs 738,899 827,033 940,999 As of December 31, 2020, 2019 and 2018, the quantity of employees was 20,173, 19,863 and 20,660, respectively. |
OTHER OPERATING INCOME (EXPENSE
OTHER OPERATING INCOME (EXPENSES), NET | 12 Months Ended |
Dec. 31, 2020 | |
Other operating income (expenses), net [Abstract] | |
OTHER OPERATING INCOME (EXPENSES), NET | OTHER OPERATING INCOME (EXPENSES), NET Year ended December 31, 2020 2019 2018 Results of sundry assets 1,363 258 1,895 Provision for legal claims and other matters (Note 18 and 24 (ii)) — 1,997 7,625 Recovery of provision related to the ICMS action of unconstitutionality (Note 24 (i) (g)) (1) 380,075 — — Other operating income 20,093 19,408 4,136 Other operating income 401,531 21,663 13,656 Reversal of the asset in connection with the ICMS provision (Note 24 (i) (g)) (1) (194,065) — — Provision for legal claims and other matters (Note 18 and 24 (ii)) (623) — — Other operating expense (194,688) — — Other operating income (expenses), net 206,843 21,663 13,656 (1) It includes the gain generated by the recovery of the provision for contingencies related to the ICMS action of unconstitutionality ($380,075), partially compensated by the reversal of the related credit ($194,065). For more information about this case, see note 24 (i) (g)). |
OTHER FINANCIAL INCOME (EXPENSE
OTHER FINANCIAL INCOME (EXPENSES), NET | 12 Months Ended |
Dec. 31, 2020 | |
Other financial income (expenses), net [Abstract] | |
OTHER FINANCIAL INCOME (EXPENSES), NET | OTHER FINANCIAL INCOME (EXPENSES), NET Year ended December 31, 2020 2019 2018 Interest expense (46,644) (88,284) (131,172) Finance expense (46,644) (88,284) (131,172) Interest income 49,421 29,071 21,236 Finance income 49,421 29,071 21,236 Net foreign exchange gain (loss) 3,379 (136,897) (177,645) Inflation adjustment results — 117,956 191,427 Change in fair value of financial assets 6,104 — — Derivative contract results 11,933 (10,831) (99,259) Others (1,862) (9,984) 15,837 Other financial income (expenses), net 19,554 (39,756) (69,640) |
INCOME TAX EXPENSE
INCOME TAX EXPENSE | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of income tax [Abstract] | |
INCOME TAX EXPENSE | INCOME TAX EXPENSE Income tax expense for each of the years presented is as follows: Year ended December 31, 2020 2019 2018 Current tax Current tax (338,408) (256,460) (588,773) Effect of changes in tax law (1) — 4,178 (28,596) Deferred tax (Note 19) Deferred tax 39,895 38,785 232,485 Effect of changes in tax law (1) — 16,979 — Recovery of income tax (2) 7,025 — 15,449 Income tax expense (291,488) (196,519) (369,435) (1) For 2019, it includes mainly the application of the new tax law in Argentina that enables the tax inflation adjustment. The reduction of the tax rate in Argentina enacted in 2017 was modified in 2019, setting the corporate income tax rate to 30% for the year 2020 and to 25% from the year 2021 going forward. For 2018, it includes mainly the option exercised by the Company of the asset revaluation for tax purpose in Argentina, for which an amount of $28.6 million was included. (2) It includes the recovery of tax credits in Ternium Brasil Ltda. Income tax expense for the years ended December 31, 2020, 2019 and 2018 differed from the amount computed by applying the statutory income tax rate in force in each country in which the company operates to pre-tax income as a result of the following: Year ended December 31, 2020 2019 2018 Income before income tax 1,159,359 826,564 2,031,567 Income tax expense at statutory tax rate (350,896) (247,592) (604,493) Non taxable income 118,540 71,101 102,870 Non deductible expenses — (476) (16,201) Effect of currency translation on tax base (1) (66,157) 33,133 161,536 Increase of unrecognized tax losses carried-forward — (73,842) — Recovery of income tax 7,025 — 15,449 Effect of changes in tax law — 21,157 (28,596) Income tax expense (291,488) (196,519) (369,435) (1) Ternium applies the liability method to recognize deferred income tax on temporary differences between the tax bases of assets and their carrying amounts in the financial statements. By application of this method, Ternium recognizes gains and losses on deferred income tax due to the effect of the change in the value on the tax basis in subsidiaries, which have a functional currency different to their local currency, mainly Mexico and Argentina. Tax rates used to perform the reconciliation between tax expense (income) and accounting profit are those in effect at each relevant date or period in each applicable jurisdiction. Deferred income taxes are calculated in full on temporary differences under the liability method using the tax rate of the applicable country. Changes in deferred income tax are as follows: As of December 31, 2020 2019 At the beginning of the year (239,740) (340,207) Translation differences (36) 25,166 Effect of changes in tax law (note 10) — 16,979 Credits directly to other comprehensive income 12,100 19,537 Deferred tax credit (note 10) 39,894 38,785 At the end of the year (187,782) (239,740) 19. DEFERRED INCOME TAX (continued) The changes in deferred tax assets and liabilities (prior to offsetting the balances within the same tax jurisdiction) during the year are as follows: Deferred tax liabilities PP&E Inventories Intangible assets Other Total at At the beginning of the year (437,376) (63,460) (17,109) (1,189) (519,134) Translation differences 46 — — — 46 Income statement credit (charge) 11,190 33,273 (3,601) (832) 40,030 At the end of the year (426,140) (30,187) (20,710) (2,021) (479,058) Deferred tax assets Provisions Trade receivables Tax losses (1) Other Total at At the beginning of the year 45,654 10,200 42,766 180,774 279,394 Translation differences — — — (82) (82) Credits directly to other comprehensive income — — — 12,100 12,100 Income statement credit (charge) 6,688 (1,014) (11,682) 5,873 (136) At the end of the year 52,342 9,186 31,084 198,665 291,276 (1) As of December 31, 2020, the recognized deferred tax assets on tax losses amount to $31,084 and there are net unrecognized deferred tax assets of $0.2 billion and unrecognized tax losses amounting to $1.0 billion. These two last effects are connected to the acquisition of Ternium Brasil Ltda. Deferred tax liabilities PP&E Inventories Intangible assets Other Total at At the beginning of the year (522,455) (41,316) (15,926) (1,088) (580,785) Translation differences 27,077 2,604 316 — 29,997 Income statement credit (charge) 58,002 (24,748) (1,499) (101) 31,654 At the end of the year (437,376) (63,460) (17,109) (1,189) (519,134) Deferred tax assets Provisions Trade receivables Tax losses (2) Other Total at At the beginning of the year 72,947 11,265 33,382 122,984 240,578 Translation differences (572) (539) — (3,720) (4,831) Credits directly to other comprehensive income — — — 19,537 19,537 Effect of changes in tax law — — — 16,979 16,979 Income statement credit (charge) (26,721) (526) 9,384 24,994 7,131 At the end of the year 45,654 10,200 42,766 180,774 279,394 (2) As of December 31, 2019, the recognized deferred tax assets on tax losses amount to $42,766 and there are net unrecognized deferred tax assets of $0.4 billion and unrecognized tax losses amounting to $1.4 billion. These two last effects are connected to the acquisition of Ternium Brasil Ltda. Deferred tax assets and liabilities are offset when the entity a) has a legally enforceable right to set off the recognized amounts; and b) intends to settle the tax on a net basis or to realize the asset and settle the liability simultaneously. 19. DEFERRED INCOME TAX (continued) The amounts shown in the statement of financial position (prior to offsetting the balances within the same tax jurisdiction) include the following: As of December 31, 2020 2019 Deferred tax assets to be recovered after more than 12 months 200,639 203,607 Deferred tax assets to be recovered within 12 months 90,637 75,787 Deferred tax liabilities to be settled after more than 12 months (446,891) (454,763) Deferred tax liabilities to be settled within 12 months (32,167) (64,371) (187,782) (239,740) |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of detailed information about property, plant and equipment [abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | PROPERTY, PLANT AND EQUIPMENT, NET (1) Property, plant and equipment, net Year ended December 31, 2020 Land Buildings Production equipment Vehicles, furniture and fixtures Work in progress Spare parts Right-of-use Total Values at the beginning of the year Cost 594,435 3,412,904 6,931,970 268,398 1,119,348 140,028 355,928 12,823,011 Accumulated depreciation — (1,618,882) (4,377,389) (218,033) — (19,656) (49,470) (6,283,430) Net book value at January 1, 2020 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 Opening net book value 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 Translation differences (134) (297) (68) (37) (6) — — (542) Additions — 18,552 1,487 2,345 482,606 20,362 6,101 531,453 Capitalized borrowing costs — — — — 13,100 — — 13,100 Disposals / Consumptions — (183) (124) (1,106) (3,775) (13,782) (3,254) (22,224) Indexation — — — — — — (9,388) (9,388) Transfers (1,540) 137,379 247,824 23,352 (407,911) (3,200) — (4,096) Depreciation charge — (136,217) (339,050) (16,761) — (7,628) (43,547) (543,203) Closing net book value 592,761 1,813,256 2,464,650 58,158 1,203,362 116,124 256,370 6,504,681 Values at the end of the year Cost 592,761 3,567,732 7,179,626 289,877 1,203,362 143,309 349,003 13,325,670 Accumulated depreciation — (1,754,476) (4,714,976) (231,719) — (27,185) (92,633) (6,820,989) Net book value at December 31, 2020 592,761 1,813,256 2,464,650 58,158 1,203,362 116,124 256,370 6,504,681 Year ended December 31, 2019 Land Buildings Production equipment Vehicles, furniture and fixtures Work in progress Spare parts Right-of-use Total Values at the beginning of the year Cost 587,174 3,303,174 6,748,644 264,782 617,950 124,220 55,288 11,701,232 Accumulated depreciation — (1,520,976) (4,126,060) (217,394) — (13,275) (5,918) (5,883,623) Net book value at January 1, 2019 587,174 1,782,198 2,622,584 47,388 617,950 110,945 49,370 5,817,609 Opening net book value 587,174 1,782,198 2,622,584 47,388 617,950 110,945 49,370 5,817,609 Effect of initial recognition under IFRS 16 — — — — — — 280,493 280,493 Translation differences (596) (16,174) (9,959) (316) (1,716) (1,089) (1,263) (31,113) Additions 7,531 9,367 2,063 4,821 923,599 38,476 40,864 1,026,721 Capitalized borrowing costs — — — — 16,085 — — 16,085 Disposals / Consumptions — (750) (117) (1,204) (2,988) (21,489) (18,901) (45,449) Transfers 326 154,544 264,122 14,843 (433,582) (50) — 203 Depreciation charge — (135,163) (324,112) (15,167) — (6,421) (44,105) (524,968) Closing net book value 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 Values at the end of the year Cost 594,435 3,412,904 6,931,970 268,398 1,119,348 140,028 355,928 12,823,011 Accumulated depreciation — (1,618,882) (4,377,389) (218,033) — (19,656) (49,470) (6,283,430) Net book value at December 31, 2019 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 11. PROPERTY, PLANT AND EQUIPMENT, NET (continued) (2) Right-of-use assets Right-of-use assets Buildings Production equipment Vehicles, furniture and fixtures Total Values at the beginning of the year Cost 245,752 110,176 — 355,928 Accumulated depreciation (28,895) (20,575) — (49,470) Net book value at January 1, 2020 216,857 89,601 — 306,458 Opening net book value 216,857 89,601 — 306,458 Net additions 2,416 3,685 — 6,101 Disposal/Derecognition (1,666) (1,588) — (3,254) Indexation (7,024) (2,364) — (9,388) Depreciation charge (29,424) (14,123) — (43,547) Closing net book value 181,159 75,211 — 256,370 Values at the end of the year Cost 239,211 109,792 — 349,003 Accumulated depreciation (58,052) (34,581) — (92,633) Net book value at December 31, 2020 181,159 75,211 — 256,370 Right-of-use assets Buildings Production equipment Vehicles, furniture and fixtures Total Values at the beginning of the year Cost — 55,288 — 55,288 Accumulated depreciation — (5,918) — (5,918) Net book value at January 1, 2019 — 49,370 — 49,370 Opening net book value — 49,370 — 49,370 Effect of initial recognition under IFRS 16 226,936 52,469 1,088 280,493 Translation differences (115) (1,148) — (1,263) Net additions 18,931 21,933 — 40,864 Disposal/Derecognition — (18,094) (807) (18,901) Depreciation charge (28,895) (14,929) (281) (44,105) Closing net book value 216,857 89,601 — 306,458 Values at the end of the year Cost 245,752 110,176 — 355,928 Accumulated depreciation (28,895) (20,575) — (49,470) Net book value at December 31, 2019 216,857 89,601 — 306,458 The cost related to variable-lease payments that do not depend on an index or rate amounted to $10.6 million for the year ended December 31, 2020 ($17.4 million for the year ended December 31, 2019). The expenses related to leases for which the Company applied the practical expedient described in paragraph 5 (a) of IFRS 16 (leases with contract term of less than 12 months) amounted to $0.8 million for the year ended December 31, 2020 ($ 3.4 million for the year ended December 31, 2019). |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of detailed information about intangible assets [abstract] | |
INTANGIBLE ASSETS, NET | INTANGIBLE ASSETS, NET Year ended December 31, 2020 Information system projects Mining assets Exploration and evaluation costs Customer relationships and other contractual rights Trademarks Goodwill Total Values at the beginning of the year Cost 342,857 256,736 19,522 604,929 73,935 662,307 1,960,286 Accumulated depreciation (268,476) (152,219) — (521,818) (73,935) — (1,016,448) Net book value at January 1, 2020 74,381 104,517 19,522 83,111 — 662,307 943,838 Opening net book value 74,381 104,517 19,522 83,111 — 662,307 943,838 Additions 25,698 2,034 23,845 — — — 51,577 Transfers 1,021 17,141 (17,146) — — — 1,016 Depreciation charge (25,259) (11,078) — (51,511) — — (87,848) Closing net book value 75,841 112,614 26,221 31,600 — 662,307 908,583 Values at the end of the year Cost 369,468 275,912 26,221 604,929 73,935 662,307 2,012,772 Accumulated depreciation (293,627) (163,298) — (573,329) (73,935) — (1,104,189) Net book value at December 31, 2020 75,841 112,614 26,221 31,600 — 662,307 908,583 Year ended December 31, 2019 Information system projects Mining assets Exploration and evaluation costs Customer relationships and other contractual rights Trademarks Goodwill Total Values at the beginning of the year Cost 320,600 216,203 23,209 604,931 73,935 662,307 1,901,185 Accumulated depreciation (248,839) (139,915) — (425,972) (73,935) — (888,661) Net book value at January 1, 2019 71,761 76,288 23,209 178,959 — 662,307 1,012,524 Opening net book value 71,761 76,288 23,209 178,959 — 662,307 1,012,524 Translation differences (463) — — — — — (463) Additions 31,812 12,580 24,265 — — — 68,657 Transfers (738) 27,954 (27,952) — — — (736) Depreciation charge (27,991) (12,305) — (95,848) — — (136,144) Closing net book value 74,381 104,517 19,522 83,111 — 662,307 943,838 Values at the end of the year Cost 342,857 256,736 19,522 604,929 73,935 662,307 1,960,286 Accumulated depreciation (268,476) (152,219) — (521,818) (73,935) — (1,016,448) Net book value at December 31, 2019 74,381 104,517 19,522 83,111 — 662,307 943,838 |
INVESTMENTS IN NON-CONSOLIDATED
INVESTMENTS IN NON-CONSOLIDATED COMPANIES | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of interests in other entities [Abstract] | |
INVESTMENTS IN NON-CONSOLIDATED COMPANIES | INVESTMENTS IN NON-CONSOLIDATED COMPANIES As of December 31, 2020 2019 At the beginning of the year 513,648 495,241 Equity in earnings of non-consolidated companies 57,555 60,967 Other comprehensive income (93,598) (39,449) Dividends from non-consolidated companies (6,299) (3,111) At the end of the year 471,306 513,648 The principal investments in non-consolidated companies, all of which are unlisted, except for Usiminas, are: Company Country of incorporation Main activity Voting rights at Value at December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS Brazil Manufacturing and selling of steel products 34.39 % 34.39 % 422,948 486,643 Techgen S.A. de C.V. Mexico Provision of electric power 48.00 % 48.00 % 42,625 21,573 Other non-consolidated companies (1) 5,733 5,432 471,306 513,648 (1) It includes the investment held in Finma S.A.I.F., Techinst S.A., Recrotek S.R.L. de C.V. and Gas Industrial de Monterrey S.A. de C.V. (a) Usinas Siderurgicas de Minas Gerais S.A. – USIMINAS As of December 31, 2020, Ternium, through its subsidiaries, owns a total of 242.6 million ordinary shares and 8.5 million preferred shares, representing 20.4% of the issued and outstanding share capital of Usinas Siderurgicas de Minas Gerais S.A. – USIMINAS (“Usiminas”), the largest flat steel producer in Brazil for the energy, automotive and other industries. Ternium, through its subsidiaries, together with Tenaris S.A.’s Brazilian subsidiary Confab Industrial S.A. (“TenarisConfab”), are part of Usiminas’ control group, comprising the so-called T/T Group. As at December 31, 2020, the Usiminas control group holds, in the aggregate, 483.6 million ordinary shares bound to the Usiminas shareholders’ agreement, representing approximately 68.6% of Usiminas’ voting capital. The Usiminas control group, which is bound by a long-term shareholders’ agreement that governs the rights and obligations of Usiminas’ control group members, is currently composed of three sub-groups: the T/T Group; the NSC Group, comprising Nippon Steel Corporation (“NSC”), Metal One Corporation and Mitsubishi Corporation; and Usiminas’ pension fund Previdência Usiminas. The T/T Group holds approximately 47.1% of the total shares held by the control group (39.5% corresponding to the Ternium entities and the other 7.6% corresponding to TenarisConfab); the NSC Group holds approximately 45.9% of the total shares held by the control group; and Previdência Usiminas holds the remaining 7%. 13. INVESTMENTS IN NON-CONSOLIDATED COMPANIES (continued) The corporate governance rules reflected in the Usiminas shareholders agreement provide, among other things, that Usiminas’ executive board will be composed of six members, including the chief executive officer and five vice-presidents, with Ternium and NSC nominating three members each. The right to nominate Usiminas’ chief executive officer alternates between Ternium and NSC at every 4-year interval, with the party that does not nominate the chief executive officer having the right to nominate the chairman of Usiminas’ board of directors for the same 4-year period. The Usiminas shareholders agreement also provides for an exit mechanism consisting of a buy-and-sell procedure—exercisable at any time after November 16, 2022 and applicable with respect to shares held by NSC and the T/T Group—, which would allow either Ternium or NSC to purchase all or a majority of the Usiminas shares held by the other shareholder. As of December 31, 2020, the closing price of the Usiminas ordinary and preferred shares, as quoted on the BM&F Bovespa Stock Exchange, was BRL 15.69 (approximately $3.02; December 31, 2019: BRL9.87 - $2.45) per ordinary share and BRL14.61 (approximately $2.81; December 31, 2019: BRL9.51 - $2.36) per preferred share, respectively. Accordingly, as of December 31, 2020, Ternium’s ownership stake had a market value of approximately $756.3 million ($614.1 million as of December 31, 2019) and a carrying value of $422.9 million ($486.6 million as of December 31, 2019). The Company reviews periodically the recoverability of its investment in Usiminas. To determine the recoverable value, the Company estimates the value in use of the investment by calculating the present value of the expected cash flows or its fair value less costs of disposal. As of December 31, 2020 and 2019, the value of the investment in Usiminas is comprised as follows: USIMINAS Value of investment As of December 31, 2020 As of December 31, 2019 At the beginning of the year 486,643 480,084 Share of results (1) 35,580 48,502 Other comprehensive income (93,237) (38,896) Dividends (6,038) (3,047) At the end of the year 422,948 486,643 (1) It includes the adjustment of the values associated to the purchase price allocation. The investment in Usiminas is based in the following calculation: Usiminas' shareholders' equity 2,860,944 Percentage of interest of the Company over shareholders' equity 20.41 % Interest of the Company over shareholders' equity 583,799 Purchase price allocation 46,664 Goodwill 200,018 Impairment (407,533) Total Investment in Usiminas 422,948 On February 12, 2021, Usiminas issued its annual accounts as of and for the year ended December 31, 2020. 13. INVESTMENTS IN NON-CONSOLIDATED COMPANIES (continued) Summarized balance sheet (in million $) As of December 31, 2020 As of December 31, 2019 Assets Non-current 3,487 4,336 Current 1,339 1,721 Other current investments 276 166 Cash and cash equivalents 661 311 Total Assets 5,763 6,534 Liabilities Non-current 540 718 Non-current borrowings 1,122 1,237 Current 836 687 Current borrowings 26 30 Total Liabilities 2,524 2,672 Non-controlling interest 378 378 Shareholders' equity 2,861 3,484 Summarized income statement (in million $) Year ended December 31, 2020 Year ended December 31, 2019 Net sales 3,133 3,790 Cost of sales (2,509) (3,312) Gross Profit 624 478 Selling, general and administrative expenses (161) (181) Other operating income (loss), net 61 (100) Operating income 524 197 Financial expenses, net (234) (132) Equity in earnings of associated companies 30 46 Profit (Loss) before income tax 320 111 Income tax benefit (97) (16) Net profit (loss) before non-controlling interest 223 95 Non-controlling interest in other subsidiaries (117) (41) Net profit (loss) for the year 106 54 (b) Techgen S.A. de C.V. Techgen is a Mexican natural gas-fired combined cycle electric power plant in the Pesquería area of the State of Nuevo León, Mexico. The company started producing energy on December 1st, 2016 and is fully operational. As of February 2017, Ternium, Tenaris, and Tecpetrol International S.A. (a wholly-owned subsidiary of San Faustin S.A., the controlling shareholder of both Ternium and Tenaris) completed their investments in Techgen. Techgen is currently owned 48% by Ternium, 30% by Tecpetrol and 22% by Tenaris. Ternium and Tenaris also agreed to enter into power supply and transportation agreements with Techgen, pursuant to which Ternium and Tenaris will contract 78% and 22%, respectively, of Techgen’s power capacity of 900 megawatts. Techgen stated in its annual accounts as of and for the year ended December 31, 2020, that revenues amounted to $314 million ($344 million as of December 31, 2019), net profit from continuing operations to $44 million ($24 million as of December 31, 2019), non-current assets to $833 million ($875 million as of December 31, 2019), current assets to $59 million ($48 million as of December 31, 2019), non-current liabilities to $709 million ($791 million as of December 31, 2019), current liabilities to $95 million ($87 million as of December 31, 2019) and shareholders’ equity to $89 million ($45 million as of December 31, 2019). During 2017 and 2016, Techgen’s shareholders made additional investments in Techgen, in the form of subordinated loans, which in the case of Ternium amounted to $127.4 million as of December 31, 2020, and which are due in June 2026. For commitments from Ternium in connection with Techgen, see note 24. |
RECEIVABLES, NET - NON CURRENT
RECEIVABLES, NET - NON CURRENT AND CURRENT | 12 Months Ended |
Dec. 31, 2020 | |
Receivables, net [Abstract] | |
RECEIVABLES, NET - NON CURRENT AND CURRENT | RECEIVABLES, NET – NON CURRENT AND CURRENT As of December 31, 2020 2019 Receivables with related parties (Notes 25 and 13 (b)) 126,908 126,948 Employee advances and loans 2,326 1,572 Advances to suppliers for the purchase of property, plant and equipment 14,078 50,079 Advances to suppliers for the purchase of property, plant and equipment with related parties (Note 25) 2,452 7,827 Other receivables — 254,446 Other tax credits 97,202 150,721 Others 340 972 Receivables, net – Non-current 243,306 592,565 As of December 31, 2020 2019 Value added tax 188,027 162,121 Income tax credits 8,205 60,402 Other tax credits 29,834 38,913 Employee advances and loans 4,355 3,667 Advances to suppliers 12,009 10,134 Advances to suppliers with related parties (Note 25) 11,927 16,126 Expenses paid in advance 8,160 9,781 Government tax refunds on exports 6,499 14,805 Receivables with related parties (Note 25) 7,446 3,696 Others 12,147 15,068 Receivables, net – Current 288,609 334,713 |
TRADE RECEIVABLES, NET - NON CU
TRADE RECEIVABLES, NET - NON CURRENT AND CURRENT | 12 Months Ended |
Dec. 31, 2020 | |
Trade and other receivables [abstract] | |
TRADE RECEIVABLES, NET - NON CURRENT AND CURRENT | TRADE RECEIVABLES, NET – NON CURRENT AND CURRENT As of December 31, 2020 2019 Trade receivables — 897 Trade receivables, net – Non-current — 897 Current accounts 832,544 920,937 Trade receivables with related parties (Note 25) 96,394 41,696 Allowance for doubtful accounts (Note 18) (10,500) (12,961) Trade receivables, net - Current 918,438 949,672 Trade receivables, net as of December 31, 2020 Total Fully performing Past due Guaranteed 387,718 373,384 14,334 Not guaranteed 541,220 518,914 22,306 Trade receivables 928,938 892,298 36,640 Allowance for doubtful accounts (Note 18) (10,500) — (10,500) Trade receivables, net 918,438 892,298 26,140 Trade receivables, net as of December 31, 2019 Total Fully performing Past due Guaranteed 469,087 424,052 45,035 Not guaranteed 494,443 453,184 41,259 Trade receivables 963,530 877,236 86,294 Allowance for doubtful accounts (Note 18) (12,961) — (12,961) Trade receivables, net 950,569 877,236 73,333 |
INVENTORIES, NET
INVENTORIES, NET | 12 Months Ended |
Dec. 31, 2020 | |
Subclassifications of assets, liabilities and equities [abstract] | |
INVENTORIES, NET | INVENTORIES, NET As of December 31, 2020 2019 Raw materials, materials and spare parts 606,429 731,901 Goods in process 838,403 975,553 Finished goods 313,257 396,401 Goods in transit 302,302 116,610 Obsolescence allowance (Note 18) (58,610) (62,167) Inventories, net 2,001,781 2,158,298 |
CASH, CASH EQUIVALENTS AND OTHE
CASH, CASH EQUIVALENTS AND OTHER INVESTMENTS - NON CURRENT AND CURRENT | 12 Months Ended |
Dec. 31, 2020 | |
Cash, cash equivalents and other investments [Abstract] | |
CASH, CASH EQUIVALENTS AND OTHER INVESTMENTS - NON CURRENT AND CURRENT | CASH, CASH EQUIVALENTS AND OTHER INVESTMENTS – NON CURRENT AND CURRENT As of December 31, 2020 2019 Investments in debt instruments and other 2,629 3,001 Other investments 252 252 Other investments, net – Non-current 2,881 3,253 As of December 31, 2020 2019 (i) Other investments Other deposits with maturity of more than three months 813,527 212,271 Other investments - Current 813,527 212,271 (ii) Cash and cash equivalents Cash and banks 129,500 115,575 Restricted cash 54 69 Short-term bank deposits 259,020 199,877 Other deposits with maturity of less than three months 149,308 204,444 Cash and cash equivalents 537,882 519,965 |
ALLOWANCES AND PROVISIONS - NON
ALLOWANCES AND PROVISIONS - NON CURRENT AND CURRENT | 12 Months Ended |
Dec. 31, 2020 | |
Provisions [abstract] | |
ALLOWANCES AND PROVISIONS - NON CURRENT AND CURRENT | ALLOWANCES AND PROVISIONS – NON CURRENT AND CURRENT Provisions and allowances - Non current Liabilities Liabilities Legal claims and other matters Asset retirement obligation Year ended December 31, 2020 Values at the beginning of the year 613,352 26,556 Translation differences (151,466) (1,049) Additions 3,760 16,166 Reversals (384,933) — Uses (143) — At December 31, 2020 80,570 41,673 Year ended December 31, 2019 Values at the beginning of the year 643,950 24,554 Translation differences (25,701) 1,077 Additions 2,689 925 Reversals (4,417) — Uses (3,169) — At December 31, 2019 613,352 26,556 18. ALLOWANCES AND PROVISIONS – NON CURRENT AND CURRENT (continued) Provisions and allowances - Current Deducted from assets Liabilities Allowance for doubtful accounts Obsolescence allowance Asset retirement obligation Year ended December 31, 2020 Values at the beginning of the year 12,961 62,167 8,502 Translation differences (1,789) — (1,241) Additions 1,437 11,009 3,633 Reversals (1,101) (12,288) — Uses (1,008) (2,278) (6,379) At December 31, 2020 10,500 58,610 4,515 Year ended December 31, 2019 Values at the beginning of the year 14,346 55,454 9,851 Translation differences (285) (458) 348 Additions 787 18,036 5,201 Reversals (1,080) (9,623) — Uses (807) (1,242) (6,898) At December 31, 2019 12,961 62,167 8,502 |
DEFERRED INCOME TAX
DEFERRED INCOME TAX | 12 Months Ended |
Dec. 31, 2020 | |
Deferred income tax [Abstract] | |
DEFERRED INCOME TAX | INCOME TAX EXPENSE Income tax expense for each of the years presented is as follows: Year ended December 31, 2020 2019 2018 Current tax Current tax (338,408) (256,460) (588,773) Effect of changes in tax law (1) — 4,178 (28,596) Deferred tax (Note 19) Deferred tax 39,895 38,785 232,485 Effect of changes in tax law (1) — 16,979 — Recovery of income tax (2) 7,025 — 15,449 Income tax expense (291,488) (196,519) (369,435) (1) For 2019, it includes mainly the application of the new tax law in Argentina that enables the tax inflation adjustment. The reduction of the tax rate in Argentina enacted in 2017 was modified in 2019, setting the corporate income tax rate to 30% for the year 2020 and to 25% from the year 2021 going forward. For 2018, it includes mainly the option exercised by the Company of the asset revaluation for tax purpose in Argentina, for which an amount of $28.6 million was included. (2) It includes the recovery of tax credits in Ternium Brasil Ltda. Income tax expense for the years ended December 31, 2020, 2019 and 2018 differed from the amount computed by applying the statutory income tax rate in force in each country in which the company operates to pre-tax income as a result of the following: Year ended December 31, 2020 2019 2018 Income before income tax 1,159,359 826,564 2,031,567 Income tax expense at statutory tax rate (350,896) (247,592) (604,493) Non taxable income 118,540 71,101 102,870 Non deductible expenses — (476) (16,201) Effect of currency translation on tax base (1) (66,157) 33,133 161,536 Increase of unrecognized tax losses carried-forward — (73,842) — Recovery of income tax 7,025 — 15,449 Effect of changes in tax law — 21,157 (28,596) Income tax expense (291,488) (196,519) (369,435) (1) Ternium applies the liability method to recognize deferred income tax on temporary differences between the tax bases of assets and their carrying amounts in the financial statements. By application of this method, Ternium recognizes gains and losses on deferred income tax due to the effect of the change in the value on the tax basis in subsidiaries, which have a functional currency different to their local currency, mainly Mexico and Argentina. Tax rates used to perform the reconciliation between tax expense (income) and accounting profit are those in effect at each relevant date or period in each applicable jurisdiction. Deferred income taxes are calculated in full on temporary differences under the liability method using the tax rate of the applicable country. Changes in deferred income tax are as follows: As of December 31, 2020 2019 At the beginning of the year (239,740) (340,207) Translation differences (36) 25,166 Effect of changes in tax law (note 10) — 16,979 Credits directly to other comprehensive income 12,100 19,537 Deferred tax credit (note 10) 39,894 38,785 At the end of the year (187,782) (239,740) 19. DEFERRED INCOME TAX (continued) The changes in deferred tax assets and liabilities (prior to offsetting the balances within the same tax jurisdiction) during the year are as follows: Deferred tax liabilities PP&E Inventories Intangible assets Other Total at At the beginning of the year (437,376) (63,460) (17,109) (1,189) (519,134) Translation differences 46 — — — 46 Income statement credit (charge) 11,190 33,273 (3,601) (832) 40,030 At the end of the year (426,140) (30,187) (20,710) (2,021) (479,058) Deferred tax assets Provisions Trade receivables Tax losses (1) Other Total at At the beginning of the year 45,654 10,200 42,766 180,774 279,394 Translation differences — — — (82) (82) Credits directly to other comprehensive income — — — 12,100 12,100 Income statement credit (charge) 6,688 (1,014) (11,682) 5,873 (136) At the end of the year 52,342 9,186 31,084 198,665 291,276 (1) As of December 31, 2020, the recognized deferred tax assets on tax losses amount to $31,084 and there are net unrecognized deferred tax assets of $0.2 billion and unrecognized tax losses amounting to $1.0 billion. These two last effects are connected to the acquisition of Ternium Brasil Ltda. Deferred tax liabilities PP&E Inventories Intangible assets Other Total at At the beginning of the year (522,455) (41,316) (15,926) (1,088) (580,785) Translation differences 27,077 2,604 316 — 29,997 Income statement credit (charge) 58,002 (24,748) (1,499) (101) 31,654 At the end of the year (437,376) (63,460) (17,109) (1,189) (519,134) Deferred tax assets Provisions Trade receivables Tax losses (2) Other Total at At the beginning of the year 72,947 11,265 33,382 122,984 240,578 Translation differences (572) (539) — (3,720) (4,831) Credits directly to other comprehensive income — — — 19,537 19,537 Effect of changes in tax law — — — 16,979 16,979 Income statement credit (charge) (26,721) (526) 9,384 24,994 7,131 At the end of the year 45,654 10,200 42,766 180,774 279,394 (2) As of December 31, 2019, the recognized deferred tax assets on tax losses amount to $42,766 and there are net unrecognized deferred tax assets of $0.4 billion and unrecognized tax losses amounting to $1.4 billion. These two last effects are connected to the acquisition of Ternium Brasil Ltda. Deferred tax assets and liabilities are offset when the entity a) has a legally enforceable right to set off the recognized amounts; and b) intends to settle the tax on a net basis or to realize the asset and settle the liability simultaneously. 19. DEFERRED INCOME TAX (continued) The amounts shown in the statement of financial position (prior to offsetting the balances within the same tax jurisdiction) include the following: As of December 31, 2020 2019 Deferred tax assets to be recovered after more than 12 months 200,639 203,607 Deferred tax assets to be recovered within 12 months 90,637 75,787 Deferred tax liabilities to be settled after more than 12 months (446,891) (454,763) Deferred tax liabilities to be settled within 12 months (32,167) (64,371) (187,782) (239,740) |
OTHER LIABILITIES - NON CURRENT
OTHER LIABILITIES - NON CURRENT AND CURRENT | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of other liabilities [Abstract] | |
OTHER LIABILITIES - NON CURRENT AND CURRENT | OTHER LIABILITIES – NON CURRENT AND CURRENT As of December 31, 2020 2019 (i) Other liabilities - Non current Post-employment benefits 432,648 405,935 Other employee benefits 52,647 44,496 Asset retirement obligation (note 18) (1) 41,673 26,556 Other 24,888 30,616 Other liabilities – Non-current 551,856 507,603 (1) The asset in connection with this liability is included in Property, plant and equipment. Post-employment benefits The amounts recognized in the consolidated statement of financial position are determined as follows: Post-employment benefits As of December 31, 2020 2019 Present value of unfunded obligations 432,648 405,935 Liability in the statement of financial position 432,648 405,935 The amounts recognized in the consolidated income statement are as follows: Post-employment benefits Year ended December 31, 2020 2019 Current service cost 9,954 11,776 Interest cost 26,139 27,310 Total included in labor costs 36,093 39,086 20. OTHER LIABILITIES – NON CURRENT AND CURRENT (continued) Changes in the liability recognized in the consolidated statement of financial position are as follows: Post-employment benefits As of December 31, 2020 2019 At the beginning of the year 405,935 312,293 Transfers, new participants and funding of the plan (2) (6) Total expense 36,093 39,086 Remeasurements 36,907 67,601 Effect of changes in demographic assumptions (545) 674 Effect of changes in financial assumptions 30,830 55,059 Effect of experience adjustments 6,622 11,868 Translation differences (21,722) 12,228 Contributions paid (24,563) (25,267) At the end of the year 432,648 405,935 The principal actuarial assumptions used were as follows: Year ended December 31, Mexico 2020 2019 Discount rate 6.50% 7.25% Compensation growth rate 6.00% - 7.00% 6.00% - 7.00% Year ended December 31, Argentina 2020 2019 Discount rate 6.00% - 7.00% 6.00% - 7.00% Compensation growth rate 2.00% - 3.00% 2.00% - 3.00% The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is as follows: Impact on defined benefit obligation Change in assumption Increase in assumption Decrease in assumption Discount rate 1.00 % -10.0 % 12.3 % Compensation growth rate 1.00 % 2.6 % -1.8 % Pension growth rate 1.00 % -1.2 % 1.4 % Life expectancy 1 year -1.3 % 1.6 % The estimated future payments for the next five years will be between $25.9 million and $34.0 million per year. 20. OTHER LIABILITIES – NON CURRENT AND CURRENT (continued) As of December 31, 2020 2019 (ii) Other liabilities - Current Payroll and social security payable 113,117 107,999 VAT liabilities 70,226 58,799 Other tax liabilities 41,738 38,153 Termination benefits 400 493 Related Parties (Note 25) 2,004 2,074 Asset retirement obligation (Note 18) 4,515 8,502 Others 17,836 24,914 Other liabilities – Current 249,836 240,934 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of detailed information about financial instruments [abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Net fair values of derivative financial instruments The net fair values of derivative financial instruments at December 31, 2020 and 2019 were as follows: As of December 31, 2020 2019 Contracts with positive fair value Foreign exchange contracts 1,572 1,196 1,572 1,196 Contracts with negative fair value Interest rate swap contracts (523) (17) Foreign exchange contracts (5,835) (3,007) (6,358) (3,024) Derivative financial instruments breakdown is as follows: (a) Interest rate contracts Fluctuations in market interest rates create a degree of risk by affecting the amount of the Company’s interest payments and the value of its floating-rate debt. As of December 31, 2020, most of the Company’s long-term borrowings were at variable rates. During 2012 and 2013, Tenigal entered into several forward starting interest rate swap agreements in order to fix the interest rate to be paid over an aggregate amount of $100 million, at an average rate of 1.92%. These agreements are effective from July 2014, will due on July 2022 and have been accounted for as cash flow hedges. As of December 31, 2020, the after-tax cash flow hedge reserve related to these agreements amounted to $(0.2) million. 21. DERIVATIVE FINANCIAL INSTRUMENTS (continued) Changes in fair value of derivative instruments designated as cash flow hedges for each of the years presented are included below: Cash flow hedges Gross amount Income tax Total At December 31, 2018 679 (202) 477 (Decrease) / Increase (475) 142 (333) Reclassification to income statement (276) 83 (193) At December 31, 2019 (72) 23 (49) (Decrease) / Increase (454) 136 (318) Reclassification to income statement 188 (56) 132 At December 31, 2020 (338) 103 (235) The gross amount of the pre-tax reserve recorded in other comprehensive income at December 31, 2020 (amounting to a loss of $0.2 million) is expected to be reclassified to the income statements in accordance to the payments of interests in connection with the borrowings hedged by these derivative contracts, during 2020 and up to the end of the life of the borrowing in 2022. (b) Foreign exchange contracts From time to time, Ternium’s subsidiaries enter into derivative agreements to manage their exposure to currencies other than the $, in accordance with the Company’s policy for derivative instruments. During 2020 and 2019, Ternium Argentina entered into several non-deliverable forward agreements in order to manage the exchange rate exposure generated by Argentine peso-denominated financial assets and liabilities. Furthermore, during 2020, 2019 and 2018, Ternium Colombia S.A.S. has entered into non-deliverable forward agreements to manage the exposure of certain actual and future trade receivables denominated in its local currency. As of December 31, 2020, the notional amount on these agreements amounted to $75.4 million. During 2020, 2019 and 2018, Ternium Mexico entered into several forward agreements in order to manage the exchange rate exposure generated by future payables in EUR related to the investment plan. As of December 31, 2020, the notional amount on these agreements amounted to $59.2 million. During 2020, 2019 and 2018, Ternium Investments S.à.r.l., entered into several forward agreements in order to manage the exchange rate exposure generated by the consolidated financial position in EUR. As of December 31, 2020, the notional amount on these agreements amounted to $4.9 million. Also, during 2020, Ternium Investments S.à r.l. entered into non-deliverable forward agreements to manage the exchange rate exposure generated by actual and future trade receivables denominated in Colombian pesos related to the commissioning of the plant and the business of its subsidiary, Ternium del Atlántico. As of December 31, 2020, the notional amount on these agreements amounted to $3.4 million. 21. DERIVATIVE FINANCIAL INSTRUMENTS (continued) The net fair values of the exchange rate derivative contracts as of December 31, 2020 and December 31, 2019 were as follows: Fair value at December 31, Currencies Contract Notional amount 2020 2019 EUR/$ ND Forward - Buy EUR 53.7 million EUR 1,572 1,196 COP/$ ND Forward - Sell COP 291.5 billion COP (5,835) (3,007) (4,263) (1,811) COP: Colombian pesos; EUR: E.U. euros; $: U.S. dollars. |
LEASE LIABILITIES
LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of leases [Abstract] | |
LEASE LIABILITIES | LEASE LIABILITIES Lease liabilities Current Non Current Total Year ended December 31, 2019 Values at the beginning of the year 8,030 65,798 73,828 Effect of initial recognition under IFRS 16 34,848 245,645 280,493 Translation differences 2,659 (7,139) (4,480) Net proceeds 1,474 24,545 26,019 Repayments (38,569) — (38,569) Interest accrued 16,755 — 16,755 Interest paid (15,281) — (15,281) Reclassifications 30,630 (30,630) — As of December 31, 2019 40,546 298,219 338,765 Year ended December 31, 2020 Values at the beginning of the year 40,546 298,219 338,765 Translation differences 1,082 (753) 329 Net proceeds 192 2,978 3,170 Indexation (811) (8,687) (9,498) Repayments (42,144) — (42,144) Interest accrued 16,116 — 16,116 Interest paid (12,635) — (12,635) Reclassifications 40,140 (40,140) — As of December 31, 2020 42,486 251,617 294,103 22. LEASE LIABILITIES (continued) As of December 31, 2020 As of December 31, 2019 Commitments in relation to finance leases are payable as follows: Within one year 56,929 55,670 Later than one year but not later than five years 176,399 197,956 Later than five years 161,145 204,101 Minimum lease payments 394,473 457,727 Future finance charges (100,370) (118,962) Total Financial lease liabilities 294,103 338,765 The present value of finance lease liabilities is as follows: Within one year 42,486 40,546 Later than one year but not later than five years 134,857 149,830 Later than five years 116,760 148,389 Total minimum lease payments 294,103 338,765 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2020 | |
Borrowings [abstract] | |
BORROWINGS | BORROWINGS As of December 31, 2020 2019 (i) Non-current Bank borrowings 1,334,369 1,639,604 Less: debt issue costs (7,080) (10,712) 1,327,289 1,628,892 (ii) Current Bank borrowings 399,249 564,497 Less: debt issue costs (3,645) (4,715) 395,604 559,782 Total Borrowings 1,722,893 2,188,674 The maturity of borrowings is as follows: Expected Maturity Date 2021 2022 2023 and thereafter At December 31, (1) 2020 2019 Fixed Rate 129,949 — — 129,949 165,623 Floating Rate 265,655 659,942 667,347 1,592,944 2,023,051 Total 395,604 659,942 667,347 1,722,893 2,188,674 (1) As most borrowings incorporate floating rates that approximate market rates and the contractual repricing occurs mostly every 1 month, the fair value of the borrowings approximates their carrying amount and it is not disclosed separately. Fixed rate borrowings are uncommitted short-term revolving loans and their fair value approximates to their carrying amount. 23. BORROWINGS (continued) The weighted average interest rates - which incorporate instruments denominated mainly in U.S. dollars and which do not include the effect of derivative financial instruments nor the devaluation of these local currencies - at year-end were as follows: As of December 31, 2020 2019 Bank borrowings 1.43 % 2.94 % The nominal average interest rates shown above were calculated using the rates set for each instrument in its corresponding currency and weighted using the dollar-equivalent outstanding principal amount of said instruments at December 31, 2020 and 2019, respectively. Breakdown of borrowings by currency is as follows: As of December 31, Currencies Contract 2020 2019 $ Floating 1,557,483 1,977,617 $ Fixed 113,268 148,712 ARS Floating 8 10 MXN Floating 6,256 14,789 COP Floating 29,197 30,634 COP Fixed 16,681 16,912 1,722,893 2,188,674 $: U.S. dollars; ARS: Argentine pesos; COP: Colombian pesos; MXN: Mexican pesos. Ternium’s most significant borrowings as of December 31, 2020, were those incurred under Ternium México’s syndicated loan facilities, in order to finance the construction of its hot rolling mill, hot-dip galvanizing and painting lines in Pesqueria, under Tenigal’s syndicated loan facility, in order to finance the construction of its hot-dipped galvanizing mill in Pesquería, Mexico, under Ternium Investments S.à r.l., in order to finance the acquisition of Ternium Brasil, and under Ternium Brasil's syndicated loan facility, in order to finance solely activities related to its exports of goods: In $ million Date Borrower Type Original principal amount Outstanding principal amount as of December 31, 2020 Maturity Years 2012 and 2013 Tenigal Syndicated loan 200 50 July 2022 September 2017 Ternium Investments S.à r.l. Syndicated loan 1,500 400 September 2022 June 2018 Ternium Mexico Syndicated loan 1,000 500 June 2023 August 2019 Ternium Brasil Syndicated loan 500 500 August 2024 The main covenants on these loan agreements are limitations on liens and encumbrances, limitations on the sale of certain assets and compliance with financial ratios (i.e. leverage ratio). As of December 31, 2020, Ternium was in compliance with all of its covenants. |
CONTINGENCIES, COMMITMENTS AND
CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of commitments and contingencies [Abstract] | |
CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS | CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS Ternium is from time to time subject to various claims, lawsuits and other legal proceedings, including customer, employee, tax and environmental-related claims, in which third parties are seeking payment for alleged damages, reimbursement for losses, or indemnity. Management with the assistance of legal counsel periodically reviews the status of each significant matter and assesses potential financial exposure. Some of these claims, lawsuits and other legal proceedings involve highly complex issues, and often these issues are subject to substantial uncertainties and, therefore, the probability of loss and an estimation of damages are difficult to ascertain. Accordingly, with respect to a large portion of such claims, lawsuits and other legal proceedings, Ternium is unable to make a reliable estimate of the expected financial effect that will result from ultimate resolution of the proceeding. In those cases, Ternium has not accrued a provision for the potential outcome of these cases. If a potential loss from a claim, lawsuit or other proceeding is considered probable and the amount can be reasonably estimated, a provision is recorded. Accruals for loss contingencies reflect a reasonable estimate of the losses to be incurred based on information available to management as of the date of preparation of the financial statements and take into consideration litigation and settlement strategies. In a limited number of ongoing cases, Ternium was able to make a reliable estimate of the expected loss or range of probable loss and has accrued a provision for such loss but believes that publication of this information on a case-by-case basis would seriously prejudice Ternium’s position in the ongoing legal proceedings or in any related settlement discussions. Accordingly, in these cases, the Company has disclosed information with respect to the nature of the contingency but has not disclosed its estimate of the range of potential loss. The Company believes that the aggregate provisions recorded for potential losses in its consolidated financial statements are adequate based upon currently available information. However, if management’s estimates prove incorrect, current reserves could be inadequate and Ternium could incur a charge to earnings which could have a material adverse effect on Ternium’s results of operations, financial condition, net worth and cash flows. (i) Tax claims and other contingencies (a) Companhia Siderúrgica Nacional (CSN) – Tender offer litigation In 2013, the Company was notified of a lawsuit filed in Brazil by Companhia Siderúrgica Nacional, or CSN, and various entities affiliated with CSN against Ternium Investments, its subsidiary Ternium Argentina, and TenarisConfab. The entities named in the CSN lawsuit had acquired a participation in Usiminas in January 2012. The CSN lawsuit alleges that, under applicable Brazilian laws and rules, the acquirers were required to launch a tag-along tender offer to all non-controlling holders of Usiminas ordinary shares for a price per share equal to 80% of the price per share paid in such acquisition, or BRL 28.8, and seeks an order to compel the acquirers to launch an offer at that price plus interest. If so ordered, the offer would need to be made to 182,609,851 ordinary shares of Usiminas not belonging to Usiminas’ control group; Ternium Investments and Ternium Argentina’s respective shares in the offer would be 60.6% and 21.5%. 24. CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (continued) On September 23, 2013, the first instance court dismissed the CSN lawsuit, and on February 8, 2017, the court of appeals of São Paulo maintained the understanding of the first instance court. On March 6, 2017, CSN filed a motion for clarification against the decision of the court of appeals, which was rejected on July 19, 2017. On August 18, 2017, CSN filed with the court of appeals an appeal seeking the review and reversal of the decision issued by the court of appeals by the Superior Court of Justice. On March 5, 2018, the court of appeals ruled that CSN’s appeal did not meet the requirements for review by the Superior Court of Justice and rejected such appeal. On May 8, 2018, CSN appealed against such ruling and on January 22, 2019, the court of appeals rejected such appeal and ordered that the case be submitted to the Superior Court of Justice. On September 10, 2019, the Superior Court of Justice declared CSN’s appeal admissible. The Superior Court of Justice will review the case and will then render a decision on the merits. The Superior Court of Justice is restricted to the analysis of alleged violations to federal laws and cannot assess matters of fact. Ternium continues to believe that all of CSN’s claims and allegations are groundless and without merit, as confirmed by several opinions of Brazilian legal counsel, two decisions issued by the Brazilian securities regulator (CVM) in February 2012 and December 2016, and the first and second instance court decisions referred to above. Accordingly, no provision has been recorded in these Consolidated Financial Statements. (b) Shareholder claims relating to the October 2014 acquisition of Usiminas shares On April 14, 2015, the staff of CVM, determined that an acquisition of additional ordinary shares of Usiminas by Ternium Investments made in October 2014, triggered a requirement under applicable Brazilian laws and regulations for Usiminas’ controlling shareholders to launch a tender offer to all non-controlling holders of Usiminas ordinary shares. The CVM staff’s determination was made further to a request by NSSMC and its affiliates, who alleged that Ternium’s 2014 acquisition had exceeded a threshold that triggers the tender offer requirement. In the CVM staff’s view, the 2014 acquisition exceeded the applicable threshold by 5.2 million shares. On April 29, 2015, Ternium filed an appeal to be submitted to the CVM’s Board of Commissioners. On May 5, 2015, the CVM staff confirmed that the appeal would be submitted to the Board of Commissioners and that the effects of the staff’s decision would be stayed until such Board rules on the matter. On June 15, 2015, upon an appeal filed by NSSMC, the CVM staff changed its earlier decision and stated that the obligation to launch a tender offer would fall exclusively on Ternium. Ternium’s appeal has been submitted to the CVM’s Board of Commissioners and it is currently expected that such Board will rule on the appeal in 2021. In addition, on April 18, 2018, Ternium filed a petition with the CVM’s reporting Commissioner requesting that the applicable threshold for the tender offer requirement be recalculated taking into account the new ordinary shares issued by Usiminas in connection with its 2016 BRL 1 billion capital increase and that, in light of the replenishment of the threshold that would result from such recalculation, the CVM staff’s 2015 determination be set aside.In the event the appeal is not successful, under applicable CVM rules Ternium may elect to sell to third parties the 5.2 million shares allegedly acquired in excess of the threshold, in which case no tender offer would be required. 24. CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (continued) (c) Potential Mexican income tax adjustment In March 2015, the Mexican tax authorities, as part of a tax audit to Ternium Mexico with respect to fiscal year 2008, challenged the deduction by Ternium Mexico’s predecessor IMSA Acero of a tax loss arising from an intercompany sale of shares in December 2008. Although the tax authorities have not yet determined the amount of their claim, they have indicated in a preliminary report that they have observations that may result in an income tax adjustment currently estimated at approximately $54.2 million, including interest and fines. Additionally, in September 2018, the Mexican tax authority, as a result of a tax audit for the fiscal year 2011 to Ternium Mexico, as predecessor of APM, objected mainly the deduction of the tax loss remaining for the year 2008, for which the estimated income tax adjustment would be of approximately $26.6 million, including interest and fines. Ternium Mexico requested an injunction from the Mexican courts against the audit observations for the year 2008 and the fiscal credit of the year 2011, and also filed its defense and supporting documents with the Mexican tax authorities. The injunction for the year 2008 was resolved in Ternium Mexico's favor in August 2020; consequently, in November 2020, the Mexican tax authorities issued a new preliminary report which reiterates the same observations as before but with different arguments that may result in the same tax adjustment as described in the immediately preceding paragraph. The Company, based on the advice of counsel, believes that an unfavorable outcome in connection with this uncertain tax position is not probable and, accordingly, no provision has been recorded in these financial statements. (d) Putative class action Following the Company’s November 27, 2018 announcement that its chairman Paolo Rocca had been included in an Argentine court investigation known as the Notebooks Case (a decision subsequently reversed by a higher court), a putative class action complaint was filed in the U.S. District Court for the Eastern District of New York. On June 17, 2019, the lead plaintiff filed an amended complaint purportedly on behalf of purchasers of Ternium securities from May 1, 2014 through November 27, 2018. The individual defendants named in the amended complaint are our chairman, our former CEO, our current CEO and our CFO. That complaint alleged that during the class period, the Company and the individual defendants inflated the price of Ternium’s ADSs by failing to disclose that the nationalization proceeds received by Ternium when Sidor was expropriated by Venezuela were received or expedited as a result of alleged improper payments made to Argentine officials. On September 14, 2020, the court granted a motion to dismiss the claims against all defendants, with leave for plaintiff to file a second amended complaint. Because plaintiffs did not file a second amended complaint, on November 17, 2020, the case was dismissed with prejudice. The case is now closed. (e) Fishermen associations’ claims Civil contingencies include lawsuits brought by a number of fishermen associations on behalf of their associates, alleging that the dredge of Ternium Brasil’s deep-water port has had a negative impact on fish farming and exploitation activities in the Sepetiba Bay area in Rio de Janeiro and that, as a result, fishermen in that area had suffered damages. A provision in the amount of $24.5 million was recorded at the acquisition date in connection with this matter ($10.9 million and $14.1 million as of December 31, 2020 and 2019, respectively). 24. CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (continued) (f) Tax assessments relating to the use of certain ICMS tax credits The Imposto Sobre Operações Relativas à Circulação de Mercadorias e Serviços, or ICMS, is a Brazilian value-added tax on the services (inter-states) and the transfer of goods in Brazil. Payment of ICMS generates tax credits that, subject to applicable law, rules and regulations, may be either used to offset ICMS payment obligations generated in connection with domestic sales of products and services, or sold and transferred to third parties. The Rio de Janeiro State Treasury Office is challenging the use by Ternium Brasil of ICMS tax credits generated in connection with purchases of refractory materials in the period from December 2010 through December 2016, and intends to assess taxes and impose fines on Ternium Brasil on the argument that such materials may not be qualified as raw materials or intermediary products but as goods for consumption and, accordingly, ICMS tax credits generated in connection with their purchase are not available and may not be used to offset ICMS payment obligations generated in connection with Ternium Brasil’s domestic sales of carbon steel slabs. Ternium Brasil has appealed against the Rio de Janeiro State Treasury Office tax assessments and fines. A provision in the amount of $57.7 million was recorded as of the acquisition date in connection with this matter ($34.9 million and $45.0 million as of December 31, 2020 and 2019, respectively). (g) ICMS deferral tax benefit - Action of unconstitutionality On March 31, 2005, through State Law No. 4,529 (Law RJ 4529), the State of Rio de Janeiro granted Ternium Brasil a tax incentive consisting of a deferral of ICMS payable by Ternium Brasil in connection with the construction and operation of the company’s Rio de Janeiro steelmaking complex. The incentive applies in respect of the acquisition of fixed assets and certain raw materials (i.e. iron ore, pellets, alloys, coke, coal and scrap) and significantly reduces input ICMS credit accumulation by Ternium Brasil. The tax incentive was granted for a period of 20 years from the commencement of the construction works for Ternium Brasil’s Rio de Janeiro steel complex. In 2012, a Brazilian political party filed a direct action of unconstitutionality against Law RJ 4529 before the Brazilian Federal Supreme Court, claiming that the State Law should be declared unconstitutional because the tax incentive granted pursuant to Law RJ 4529 had not been approved by Brazil’s National Council of Fiscal Policy (Conselho Nacional de Política Fazendária, or CONFAZ). In August 2017, the Brazilian Congress enacted Supplementary Law No. 160/2017, instituting a mechanism through which the States may confirm any ICMS incentives they had granted in prior years without CONFAZ approval. In furtherance of such Supplementary Law, in December 2017 the Brazilian States adopted ICMS Convention 190/2017, establishing the applicable rules and deadlines for confirming such ICMS incentives. In accordance with the ICMS Convention 190/2017, the State of Rio de Janeiro published its list of ICMS incentives, including, among others, the ICMS benefit granted to Ternium Brasil, and filed with CONFAZ all relevant documents concerning such incentives. On July 27, 2018, the Governor of Rio de Janeiro issued Decree No. 46,378, pursuant to which the State of Rio de Janeiro reconfirmed, in accordance with ICMS Convention 190/2017, the ICMS tax benefits listed in its official gazette publication made pursuant to the Convention, including, among others, Ternium Brasil’s ICMS tax benefits. 24. CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (continued) In October 2018, the State of Rio de Janeiro and the Federation of Industries of the State of Rio de Janeiro filed petitions arguing that the action of unconstitutionality against Law RJ 4529 could not be judged by the Brazilian Federal Supreme Court since, following the revalidation of such law under Supplementary Law No.160/17 and the ICMS Convention 190/2017, such action of unconstitutionality had lost its purpose. On October 20, 2020, the Reporting Justice Minister of the Brazilian Federal Supreme Court in charge of the case ruled that the action of unconstitutionality against Law RJ 4529 was impaired by the supervening loss of its object, and on November 17, 2020, the Reporting Justice Minister’s ruling became final and not subject to any further recourses or appeals. The tax benefits accumulated under Ternium Brasil’s ICMS incentive amounted to approximately $1,089 million as of the acquisition date of Ternium Brasil on September 7, 2017. In accordance with the guidance in IFRS 3, the Company recorded as of the acquisition date a provision of $651.8 million (including estimated penalties and interest) in connection with this matter, together with an asset of $325.9 million arising from its right to recover 50% of the contingency amount from Thyssenkrupp. As at December 31, 2020, both the asset, which expired on September 7, 2020, of $194.1 million ($254.4 million as of December 31, 2019) recorded in the Company’s financial statements arising from its right to recover 50% of the contingency amount from Thyssenkrupp and the contingent liability of $380.1 million ($508.9 million as of December 31, 2019) recorded in its financial statements in connection with this matter have been derecognized. Accordingly, the Company recognized in the year ended December 31, 2020, a net gain in the amount of $186.0 million. (ii) Commitments The following are Ternium’s main off-balance sheet commitments: (a) Ternium Argentina signed agreements to cover 80% of its required iron ore, pellets and iron ore fines volumes until December 31, 2021, for an estimated total amount of $385.0 million. Although they do not set a minimum amount or a minimum commitment to purchase a fixed volume, under certain circumstances a penalty is established for the party that fails of: - 7% in case the annual operated volume is between 70% and 75% of the total volume of purchases of the Company; such percentage is applied over the difference between the actual purchased volume and the 80% of the total volume of purchases. - 15% in case the annual operated volume is lower than 70% of the total volume of purchases of the Company; such percentage is applied over the difference between the actual purchased volume and the 80% of the total volume of purchases. (b) Ternium Argentina has also signed various contracts for the provision of natural gas, including Tecpetrol, a related company of Ternium, assuming firm commitments for a total of $8.1 million payable until April 2021. Additionally, Ternium Argentina signed contracts for gas transportation with related companies Transportadora de Gas del Norte S.A. and Energy Consulting Services S.A., assuming firm commitments for a total of $28.5 million payable until April 2028. (c) Ternium Argentina signed an agreement with Air Liquide Argentina S.A. for the supply of oxygen, nitrogen and argon until 2021, for an aggregate amount of $18.7 million, which is due to terminate in 2034. 24. CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (continued) (d) On April 24, 2017, Ternium Mexico entered into a 25-year contract (effective as of December 1, 2016, through December 1, 2041) with Techgen, S.A. de C.V. for the supply of 699 MW (which represents 78% of Techgen’s capacity) and covers most of Ternium Mexico’s facilities electricity needs. Monthly payments are determined on the basis of capacity charges, operation costs, back-up power charges, and transmission charges. As of the seventh contract year (as long as Techgen’s existing or replacing bank facility has been repaid in full), Ternium Mexico has the right to suspend or early terminate the contract if the rate payable under the agreement is higher than the rate charged by Comisión Federal de Electricidad ("CFE") or its successors. Ternium Mexico may instruct Techgen to sell to any affiliate of Ternium Mexico, to CFE, or to any other third party all or any part of unused contracted energy under the agreement and Ternium Mexico will benefit from the proceeds of such sale. (e) On December 20, 2000, Hylsa (Ternium Mexico’s predecessor) entered into a 25-year contract with Iberdrola Energia Monterrey, S.A. de C.V. (“Iberdrola”), a Mexican subsidiary of Iberdrola Energía, S.A., for the supply of energy to four of Ternium Mexico’s plants. On March 31, 2008, two of those plants were terminated by Iberdrola. The contracted electrical demand as of December 31, 2020, is 51.7 MW. Iberdrola currently supplies approximately 7% of Ternium Mexico’s electricity needs under this contract. Although the contract was to be effective through 2027, on April 28, 2014, Ternium Mexico and Iberdrola entered into a new supply contract and terminated the previous one. In consideration of the termination of the previous contract, Iberdrola has granted Ternium Mexico a credit of $750 thousand per MW of the 111.2 MW originally contracted capacity, resulting over time in a total value of $83.4 million. In addition, Iberdrola agreed to recognize to Ternium México $15.0 million through discounted rates. The above-mentioned credit and discount ended in June 2019 and Ternium México's rates under the contract are now market rates with a 2.5% discount; however, Ternium Mexico is entitled to terminate the contract without penalty. On October 21, 2020, Ternium Mexico decided to terminate the contract effective November 15, 2021. (f) Ternium México issued a guarantee letter covering up to approximately $25.0 million of the obligations of Gas Industrial de Monterrey, S.A. de C.V. ("GIMSA"), under the natural gas trading agreement between GIMSA and BP Energía México ("BPEM"). The credit line granted by BPEM in connection with this natural gas trading agreement amounted to approximately $25.0 million. As of December 31, 2020, the outstanding amount under the natural gas trading agreement was $9.5 million, which is below the amount included in the guarantee letter issued by Ternium México. (g) On June, 2018, Ternium Mexico entered into a loan agreement with a syndicate of banks for a $1,000 million syndicated loan facility for the purpose of financing capital expenditures, the repayment or prepayment of existing debt, and other general corporate purposes. The Company entered the Facility on June 12, 2018, and the final maturity date is on June 12, 2023, being payable in eight consecutive and equal semi-annual installments commencing on December 13, 2019. The main financial covenant that the Facility requires to meet is the consolidated net senior leverage ratio to be not greater than 3.5 to 1.00. During 2019, the facility was fully disbursed ($400 million was disbursed during 2018 and $600 million by the end of June 2019). As of December 31, 2020, the outstanding value of this loan agreement was $500 million and the Company was in compliance with all of its covenants. 24. CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (continued) (h) Ternium Mexico issued a guarantee letter covering up to approximately $62.5 million of the obligations of Techgen, S.A. de C.V. (“Techgen”), under the Clean Energy Certificates trading agreement between Techgen and Enel Green Power (“ENEL”). The amount of the guarantee is equal to 78% of the amount payable by Techgen if Techgen decides to terminate the agreement prior to the expiration date (and therefore decreases as the term of the contract passes). The trading agreement was signed on May 25, 2018, and terminates on June 30, 2041. (i) In June 2008, Ternium Mexico entered into an industrial gas supply agreement with Praxair Mexico for the Guerrero and Juventud facilities until December 2024, for a total amount of $421 million. In 2011, an amendment agreement added the purchase of hydrogen for the Juventud facility, valid until April 2025 for an amount of $8.8 million as of December 31, 2020, and the Universidad facility, valid until July 2021 for an amount of $6.1 million as of December 31, 2020. As of December 31, 2020, the agreement considers a minimum annual oxygen consumption of 96 million cubic meters, valued at approximately $4.5 million per year. The Company is in compliance with the minimum annual quotas established, which represent less than half of the average annual consumption. (j) On May 9, 2018, Ternium Mexico entered into a 10-year contract (effective as of July 1, 2018) with Kinder Morgan Texas Pipeline L.L.C., Kinder Morgan Tejas Pipeline L.L.C. and Kinder Morgan Border Pipeline L.L.C. for the transportation of natural gas in the United States of America (Texas). The contracted capacity is 60,000 MMBTU/day and the annual cost is approximately $3.7 million. (k) On December 30, 2019, Ternium Mexico entered into a 15-year contract (effective as of July 1, 2021) with Kinder Morgan Texas Pipeline L.L.C., Kinder Morgan Tejas Pipeline L.L.C. and Kinder Morgan Gas Natural de México S. de R.L. de C.V. for the transportation of natural gas in the United States of America (Texas) and in Mexico. The contracted capacity is 31,000 MMBTU/day and the annual cost is approximately $4.8 million. (l) Techgen is a party to gas transportation capacity agreements with Kinder Morgan Gas Natural de Mexico, S. de R.L. de C.V., Kinder Morgan Texas Pipeline LLC and Kinder Morgan Tejas Pipeline LLC for the whole transportation capacity starting on August 1, 2016, and ending during the second half of 2036. As of December 31, 2020, the outstanding value of this commitment was approximately $221.8 million. Ternium’s exposure under the guarantee in connection with these agreements amounts to $106.5 million, corresponding to the 48% of the agreements’ outstanding value as of December 31, 2020. (m) Ternium issued two stand-by letters of credit covering 48% of the funding of a debt service reserve account under a syndicated loan agreement between Techgen and several banks led by Citigroup Global Markets Inc., Credit Agricole Corporate and Investment Bank, and Natixis, New York Branch acting as joint bookrunners. The loan agreement dated as of February 13, 2019, amounted to $640 million and the proceeds were used by Techgen to refinance in full all amounts owed under a previous syndicated loan between Techgen and several banks, which funds were used in the construction of the facility. As of December 31, 2020, the outstanding aggregated amount under the stand-by letters of credit was $44.6 million, as a result the amount guaranteed by Ternium was approximately $21.4 million. 24. CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (continued) (n) During 2006, CSA, the predecessor of Ternium Brasil, has entered into a 15-year contract denominated Contrato de comercialização de energia elétrica no ambiente regulado - CCEAR por disponibilidade to provide electric energy to 24 distributors starting on 2011. Under this contract, Ternium Brasil has to provide 200 MW average per year and the price is adjusted by the Brazilian inflation index. The penalty for not delivering the volume of energy of the contract is the difference between the spot price and the unit variable cost (calculated and published by the Agéncia Nacional de Energía Elétrica), calculated per hour. (o) Ternium Brasil signed an exclusivity agreement with Vale S.A. for the purchase of iron ore (pellets, sinter feed and lump ore), which is due to terminate in 2029. The total purchased volume, in accordance with the actual production capacity, is of approximately 8.0 million tons per year. Ternium Brasil has not the obligation to take or pay the mentioned volume and only should pay logistic costs in case of not purchasing the contracted volume. (p) Ternium Brasil, for its activity of energy generation through gas and steam turbines, signed on March 2017 a contract with GE Global Parts and Products GMBH, General Electric International Inc. and Alstom Energia Térmica e Indústria Ltda. for the maintenance services of such turbines (including the supply of spare parts) for a period of 20 years. As of December 31, 2020, the outstanding amount of this commitment was $171.3 million. (q) Ternium Brasil also signed on November 2007 a contract with Primetals Technologies Brazil Ltda. for the provision of maintenance services at a central workshop for the entire steel mill complex, including caster maintenance for the steel plant. As of December 31, 2020, the outstanding amount of the mentioned services was approximately $57.3 million and is due to terminate on November 2024. Ternium Brasil is currently using more hours than the minimum quantity of contracted hours. (r) Ternium Brasil is a party to a long-term contract with the Consortium formed by Air Liquide Brasil Ltda., AirSteel Ltda., White Martins Gases Industriais Ltda., White Martins Steel Ltda. and ThyssenKrupp MinEnergy GmbH for the supply of air, oxygen, nitrogen and argon to satisfy the requirements up to January 2029. The outstanding amount was approximately $228.9 million as of December 31, 2020. The contract has minimum daily-required volumes. (s) Ternium Brasil signed on January 2015 a contract with Naturgy (formerly Companhia Distribuidora de Gás do Rio de Janeiro) for the supply of natural gas, which was due to terminate on December 2019. This agreement was automatically renewed for another two years and is due to terminate on December 2021 and can be interrupted by common agreement due to free market conditions' changes. The outstanding amount was of $25.8 million (or 61.5 million m3) as of December 31, 2020. Ternium Brasil is currently purchasing more than the minimum volume required by the contract, which is 85% of the volume mentioned before. (t) Ternium Brasil signed on May 2019 a contract with LSI Logistica S.A. for mobile equipment rental. This agreement is due to terminate on May 2024 and the outstanding amount was $11.0 million as of December 31, 2020. The contract only has a penalty in case of anticipated termination. 24. CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (continued) (u) The acquisition of Ternium Brasil Ltda. was mainly financed through an unsecured 5-year syndicated facility in the principal amount of $1.5 billion granted to the Company’s subsidiary, Ternium Investments S.àr.l., by a syndicate of banks. The facility is to be repaid in eight consecutive and equal semi-annual installments, commencing on March 5, 2019, and has been guaranteed by the Company’s subsidiary, Ternium México, S.A. de C.V. The borrower and the guarantor are subject to certain covenants customary for transactions of this type, including limitations on liens and encumbrances, transactions with affiliates, consolidations and mergers and restrictions on investments. The guarantor is additionally subject to limitations on the sale of certain assets and compliance with a leverage ratio. There are no limitations to the payment of dividends applicable to the borrower or the guarantor, except, with respect to the borrower, upon an event of default under the facility. During 2018 and 2019, the Company made prepayments of principal for $375 million and $725 million, respectively. As of December 31, 2020, the outstanding value of this syndicated facility was $400 million and both the borrower and the guarantor were in compliance with all of its covenants. (iii) Restrictions on the distribution of profits In accordance with Luxembourg law, the Company is required to transfer a minimum of 5% of its net profit for each financial year to a legal reserve until such reserve equals 10% of the issued share capital. As of December 31, 2020, this reserve is fully allocated and additional allocations to the reserve are not required under Luxembourg law. Dividends may not be paid out of the legal reserve. The Company may pay dividends to the extent, among other conditions, that it has distributable retained earnings calculated in accordance with Luxembourg law and regulations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of related party [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS As of December 31, 2020, Techint Holdings S.à r.l. (“Techint”) owned 62.02% of the Company’s share capital and Tenaris Investments S.à r.l. (“Tenaris”) held 11.46% of the Company’s share capital. Each of Techint and Tenaris were controlled by San Faustin S.A., a Luxembourg company (“San Faustin”). Rocca & Partners Stichting Administratiekantoor Aandelen San Faustin (“RP STAK”), a private foundation (Stichting) located in the Netherlands, held voting rights in San Faustin sufficient in number to control San Faustin. No person or group of persons controls RP STAK. For commitments with Related parties, see note 24. The following transactions were carried out with related parties: Year ended December 31, 2020 2019 2018 (i) Transactions (a) Sales of goods and services Sales of goods to non-consolidated parties 432,511 515,123 774,526 Sales of goods to other related parties 15,972 77,375 141,230 Sales of services and others to non-consolidated parties 173 171 176 Sales of services and others to other related parties 1,009 1,060 1,286 449,665 593,729 917,218 (b) Purchases of goods and services Purchases of goods from non-consolidated parties 347,638 408,309 483,182 Purchases of goods from other related parties 83,738 71,324 50,928 Purchases of services and others from non-consolidated parties 9,421 14,563 10,266 Purchases of services and others from other related parties 75,483 155,289 90,536 Purchases of goods and services in connection with lease contracts from other related parties 201 8,859 — 516,481 658,343 634,912 (c) Financial results Income with non-consolidated parties 7,182 9,478 9,330 Expenses in connection with lease contracts from other related parties (1,484) (945) — 5,698 8,533 9,330 (d) Dividends received Dividends from non-consolidated parties 6,299 3,111 8,837 6,299 3,111 8,837 (e) Other income and expenses Income (expenses), net with non-consolidated parties 765 929 1,012 Income (expenses), net with other related parties 1,042 986 492 1,807 1,915 1,504 25. RELATED PARTY TRANSACTIONS (continued) As of December 31, 2020 2019 (ii) Year-end balances (a) Arising from sales/purchases of goods/services and other transactions Receivables from non-consolidated parties 227,074 167,312 Receivables from other related parties 3,674 5,027 Advances from non-consolidated parties 6,647 8,017 Advances to suppliers with other related parties 7,732 15,936 Payables to non-consolidated parties (30,407) (44,784) Payables to other related parties (29,095) (41,849) Lease liabilities with other related parties (3,550) (7,310) 182,075 102,349 (iii) Officers and Directors’ compensation During the year ended December 31, 2020 the cash compensation of Officers and Directors amounted to $13,736 (2019: $26,942). In addition, Officers received 1,180,000 Units for a total amount of $4,289 (2019: $3,546) in connection with the incentive retention program mentioned in note 3 (o)(3). |
OTHER REQUIRED DISCLOSURES
OTHER REQUIRED DISCLOSURES | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of additional information [Abstract] | |
OTHER REQUIRED DISCLOSURES | OTHER REQUIRED DISCLOSURES (a) Statement of comprehensive income Cash flow hedges Currency translation adjustment Gross amount Income tax Total At December 31, 2018 679 (202) 477 (3,707,019) (Decrease) / Increase (475) 142 (333) (61,925) Reclassification to income statement (276) 83 (193) — At December 31, 2019 (72) 23 (49) (3,768,944) (Decrease) / Increase (454) 136 (318) (108,919) Reclassification to income statement 188 (56) 132 — At December 31, 2020 (338) 103 (235) (3,877,863) 26. OTHER REQUIRED DISCLOSURES (continued) (b) Statement of cash flows Year ended December 31, 2020 2019 2018 (i) Changes in working capital (1) Inventories 156,517 510,972 (186,409) Receivables and others (29,539) 6,175 8,652 Trade receivables (12,110) 161,454 (123,388) Other liabilities 37,517 (95,131) 17,138 Trade payables 200,410 (10,786) 55,430 352,795 572,684 (228,577) (ii) Income tax accrual less payments Tax accrued (Note 10) 291,488 196,519 369,435 Taxes paid (224,927) (405,324) (523,801) 66,561 (208,805) (154,366) (iii) Interest accruals less payments Interest accrued (Note 9 and 22) 62,760 104,855 131,172 Interest paid (55,769) (101,450) (144,186) 6,991 3,405 (13,014) (1) Changes in working capital are shown net of the effect of exchange rate changes. (c) Financial debt reconciliation Financial debt Finance lease liabilities Short term borrowings Long term borrowings Total At December 31, 2018 (73,828) (399,856) (1,637,101) (2,110,785) Cash flows 53,850 231,967 (297,780) (11,963) Reclassifications — (306,262) 306,262 — Effect of initial recognition under IFRS 16 (280,493) — — (280,493) Acquisitions - finance leases (26,019) — — (26,019) Foreign exchange adjustments (8,834) (79,365) — (88,199) Other non cash movements (3,441) (6,266) (273) (9,980) At December 31, 2019 (338,765) (559,782) (1,628,892) (2,527,439) Cash flows 54,779 511,203 (3,655) 562,327 Reclassifications — (306,414) 306,414 — Acquisitions - finance leases (3,170) — — (3,170) Foreign exchange adjustments (329) 4,962 — 4,633 Other non cash movements (6,618) (45,573) (1,156) (53,347) At December 31, 2020 (294,103) (395,604) (1,327,289) (2,016,996) |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of significant accounting policies [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUCNEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS The following amendments, standards and interpretations have been applied on the year starting January 1, 2020: International Accounting Standard 1, “Presentation of Financial Statements”, and International Accounting Standard 8, “Accounting Policies, Changes in Accounting Estimates and Errors” - Amendments The IASB has issued amendments to IAS 1 “Presentation of Financial Statements” and IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” to clarify when information is material and to incorporate some of the guidance in IAS 1 about immaterial information. The amendments clarify that the reference to obscuring information addresses situations in which the effect is similar to omitting or misstating that information, that an entity assesses materiality in the context of the financial statements as a whole, and that the meaning of ‘primary users of general purpose financial statements’ is defined as ‘existing and potential investors, lenders and other creditors’ that must rely on general purpose financial statements for much of the financial information they need. The Company's management has assessed the effects of applying these amendments on the Company’s financial statements and has not identified any material impact in the application of these amendments. International Financial Reporting Standard 7, “Financial Instruments: Disclosures”, International Financial Accounting Standard 9, “Financial Instruments” and International Accounting Standard 39, “Financial Instruments: Recognition and Measurement” - Interest Rate Benchmark Reform The IASB has issued amendments to IFRS 7 “Financial Instruments: Disclosures”, IFRS 9 “Financial Instruments” and IAS 39 “Financial Instruments: Recognition and Measurement” which provide certain reliefs in relation to interest rate benchmark reforms. The reliefs relate to hedge accounting and have the effect that the reforms should not generally cause hedge accounting to terminate. However, any hedge ineffectiveness should continue to be recorded in the income statement. The Company's management has assessed the effects of applying these amendments on the Company’s financial statements and has not identified any material impact in the application of these amendments. The following standards, amendments to standards and interpretations are not mandatory for the financial year beginning January 1, 2020, and have not been early adopted: International Financial Reporting Standard 16, “Leases” – Amendments on Covid-19-related Rent Concessions In May 2020, the IASB made an amendment to IFRS 16 “Leases” in the context of the COVID-19 pandemic and its impact on rent concessions granted to lessees. Such concessions might take a variety of forms, including payment holidays and deferral of lease payments, which provides lessees with an option to treat qualifying rent concessions in the same way as they would if they were not lease modifications. In many cases, this will result in accounting for the concessions as variable lease payments in the period in which they are granted. Entities applying the practical expedients must disclose this fact, whether the expedient has been applied to all qualifying rent concessions or, if not, information about the nature of the contracts to which it has been applied, as well as the amount recognized in profit or loss arising from the rent concessions. 27. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (continued) The Company's management has assessed the effects of applying this amendment on the Company’s financial statements and has not identified any lease agreements which may be impacted by the application of this amendment. Other standards and interpretations non-significant for the Company’s financial statements: – Amendments to IFRS 3 – Definition of a business – Revised Conceptual Framework for Financial Reporting – Amendments to IAS 1 - Classification of Liabilities as Current or Non-current – Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before intended use – Amendments to IFRS 3 - Reference to the Conceptual Framework – Amendments to IAS 37 - Onerous Contracts – Cost of Fulfilling a Contract – Annual Improvements to IFRS Standards 2018–2020 cycle – Amendments to IFRS 10 and IAS 28 - Sale or contribution of assets between an investor and its associate or joint venture |
FINANCIAL RISK MANAGEMENT
FINANCIAL RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of notes and other explanatory information [Abstract] | |
FINANCIAL RISK MANAGEMENT | FINANCIAL RISK MANAGEMENT 1) Financial risk factors Ternium’s activities expose the Company to a variety of risks: market risk (including the effects of changes in foreign currency exchange rates, interest rates and commodities prices), credit risk and liquidity risk. Ternium’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance. Ternium’s subsidiaries may use derivative financial instruments to hedge certain risk exposures. 1.1) Market Risk (i) Foreign exchange rate risk Ternium operates and sells its products in different countries, and as a result is exposed to foreign exchange rate volatility. Ternium’s subsidiaries may use derivative contracts in order to hedge their exposure to exchange rate risk derived from their trade and financial operations. Ternium’s foreign exchange policy is to minimize the negative impact of fluctuations in the value of other currencies with respect to the U.S. dollar. Ternium’s subsidiaries monitor their net cash flows in currencies other than the U.S. dollar, and analyze potential hedging according to market conditions. This hedging can be carried out by netting positions or by financial derivatives. However, regulatory or legal restrictions in the countries in which Ternium’s subsidiaries operate, could limit the possibility of the Company carrying out its hedging policy. Ternium has foreign operations, whose net assets are exposed to foreign currency translation risk, some of which may impact net income. The following table shows a breakdown of Ternium’s assessed financial position exposure to currency risk as of December 31, 2020. Exposure to $ million EU euro (EUR) (98) Argentine peso (ARS) 101 Mexican peso (MXN) (591) Brazilian real (BRL) 111 Colombian peso (COP) (21) Other currencies (2) 28. FINANCIAL RISK MANAGEMENT (continued) The main relevant exposures correspond to: (a) Argentine peso vs. U.S. dollar If the Argentine peso had weakened by 1% against the U.S. dollar, it would have generated a pre-tax loss of $1.0 million as of December 31, 2020, and a pre-tax loss of $0.6 million as of December 31, 2019. (b) Mexican peso vs. U.S. dollar If the Mexican peso had weakened by 1% against the U.S. dollar, it would have generated a pre-tax gain of $5.9 million and $5.6 million as of December 31, 2020 and 2019, respectively. (c) Colombian peso vs. U.S. dollar If the Colombian peso had weakened by 1% against the U.S. dollar, it would have generated a pre-tax gain of $0.2 million and a pre-tax gain of $0.3 million as of December 31, 2020 and 2019, respectively. (d) Brazilian real vs. U.S. dollar If the Brazilian real had weakened by 1% against the U.S. dollar, it would have generated a pre-tax loss of $1.1 million and a pre-tax gain of $1.8 million as of December 31, 2020 and 2019, respectively. We estimate that if the Argentine peso, Mexican peso, Colombian peso and Brazilian real had weakened simultaneously by 1% against the U.S. dollar with all other variables held constant, total pre-tax income for the year would have been $4.0 million higher ($7.1 million higher as of December 31, 2019), as a result of foreign exchange gains/losses on translation of U.S. dollar-denominated financial position, mainly trade receivables, trade payables, lease liabilities, borrowings and other liabilities. Considering the same variation of the currencies against the U.S. dollar of all net investments in foreign operations amounting to $423 million, the currency translation adjustment included in total equity would have been $4.2 million lower, arising mainly from the adjustment on translation of the equity related to the Brazilian real during the year 2020. (ii) Interest rate risk Ternium manages its exposure to interest rate volatility through its financing alternatives and hedging instruments. Borrowings issued at variable rates expose the Company to the risk of increased interest expense in the event of a raise in market interest rates, while borrowings issued at fixed rates expose the Company to a variation in its fair value. The Company’s interest-rate risk mainly arises from long-term borrowings that bear variable-rate interest that is partially fixed through different derivative transactions, such as interest rate swaps. Ternium’s nominal weighted average interest rate for its debt instruments, which do not include neither the effect of derivative financial instruments, nor the devaluation of the local currencies, was 1.43% and 2.94% for 2020 and 2019, respectively. These rates were calculated using the rates set for each instrument in its corresponding currency and weighted using the dollar-equivalent outstanding principal amount of each instrument. Ternium’s total variable interest rate debt amounted to $1,593 million (92.5% of total borrowings) at December 31, 2020 and $2,023 million (92.4% of total borrowings) at December 31, 2019. If interest rates on the aggregate average notional of U.S. dollar denominated borrowings held during 2020, excluding borrowings with derivatives contracts mentioned in Note 21 (a), had been 100 basis points higher with all other variables held constant, total pre-tax income for the year ended December 31, 2020 would have been $20.3 million lower ($22.4 million lower as of December 31, 2019). 1.2) Credit risk Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions. Ternium’s subsidiaries have credit guidelines in place to ensure that derivative and treasury counterparties are limited to high credit quality financial institutions. Ternium invests in financial assets with a minimum credit rating of investment grade established by an international qualification agency renowned in the financial market, in line with corporate investment portfolio policies. Approximately 61.1% of the Company’s liquid financial assets correspond to investment grade rated instruments as of December 31, 2020, in comparison with approximately 92.6% as of December 31, 2019. The investments in financial assets are as follows: At December 31, 2020 At December 31, 2019 Cash and cash equivalents 537,882 519,965 Other Investments - Current and Non-Current 816,157 215,273 Fixed Income (time-deposit, zero-coupon bonds, commercial papers) 579,917 176,470 Deposit certificates 451,857 160,933 Commercial papers 128,060 15,537 Bonds and other fixed income 233,611 38,803 Non - U.S. government securities 135,671 914 Corporate securities 97,940 37,889 Other notes 2,629 — Ternium has no significant concentrations of credit risk from customers. No single customer accounts for more than ten percent of Ternium’s sales. Ternium’s subsidiaries have policies in place to ensure that sales are made to customers with an appropriate credit history, and that credit insurances, letters of credit or other instruments are requested to reduce credit risk whenever deemed necessary. The subsidiaries maintain allowances for potential credit losses. The utilization of credit limits is regularly monitored. Trade and other receivables are carried at face value less allowance for doubtful accounts, if applicable. This amount does not differ significantly from fair value. The other receivables do not contain significant impaired assets. As of December 31, 2020, trade receivables total $918.4 million ($950.6 million as of December 31, 2019). These trade receivables are collateralized by guarantees under letter of credit and other bank guarantees of $1.3 million ($3.4 million as of December 31, 2019), credit insurance of $422.8 million ($469.3 million as of December 31, 2019) and other guarantees of $7.3 million ($16.4 million as of December 31, 2019). As of December 31, 2020, trade receivables of $892.3 million ($877.2 million as of December 31, 2019) were fully performing. As of December 31, 2020, trade receivables of $36.6 million ($86.3 million as of December 31, 2019) were past due (mainly up to 180 days). 28. FINANCIAL RISK MANAGEMENT (continued) The amount of the allowance for doubtful accounts was $10.5 million as of December 31, 2020 ($13.0 million as of December 31, 2019). The carrying amounts of the Company’s trade and other receivables as of December 31, 2020, are denominated in the following currencies: Currency $ million US dollar ($) 798 EU euro (EUR) 14 Argentine peso (ARS) 12 Mexican peso (MXN) 160 Brazilian real (BRL) 397 Colombian peso (COP) 68 Other currencies 1 1,450 1.3) Liquidity risk Management maintains sufficient cash and marketable securities and credit facilities to finance normal operations. Management monitors rolling forecasts of the group’s liquidity reserve on the basis of expected cash flow. The table below analyses financial liabilities into relevant maturity groups based on the remaining period at the date of the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. $ million 2021 2022 2023 2024 Thereafter Borrowings 396 660 137 521 9 Interests to be accrued (1) 26 17 9 4 — Trade payables and other liabilities 1,024 13 8 7 38 Lease liabilities 42 42 42 28 140 Total 1,488 732 196 560 187 (1) These amounts do not include the effect of derivative financial instruments. As of December 31, 2020, total borrowings less cash and cash equivalents and other current and non-current investments amounted to $371.5 million. 1.4) Capital risk Ternium seeks to maintain an adequate debt/equity ratio considering the industry and the markets where it operates. The year-end ratio debt over debt plus equity is 0.17 and 0.22 as of December 31, 2020 and 2019, respectively. The Company does not have to comply with regulatory capital adequacy requirements as known in the financial services industry. 2) Financial instruments by category and fair value hierarchy level The accounting policies for financial instruments have been applied to the line items below. According to the scope and definitions set out in IFRS 7 and IAS 32, employers’ rights and obligations under employee benefit plans, and non-financial assets and liabilities such as advanced payments and income tax payables, are not included. As of December 31, 2020 (in $ thousands) Amortized Assets at fair value through profit or loss Assets at fair value through OCI Total (i) Assets as per statement of financial position Receivables 153,527 — — 153,527 Derivative financial instruments — 1,572 — 1,572 Trade receivables 918,438 — — 918,438 Other investments 579,917 2,629 233,611 816,157 Cash and cash equivalents 278,862 259,020 — 537,882 Total 1,930,744 263,221 233,611 2,427,576 As of December 31, 2020 (in $ thousands) Liabilities at fair value through profit or loss Amortized Total (ii) Liabilities as per statement of financial position Other liabilities — 86,070 86,070 Trade payables — 1,004,216 1,004,216 Derivative financial instruments 6,358 — 6,358 Finance lease liabilities — 294,103 294,103 Borrowings — 1,722,893 1,722,893 Total 6,358 3,107,282 3,113,640 As of December 31, 2019 (in $ thousands) Amortized Assets at fair value through profit or loss Assets at fair value through OCI Total (i) Assets as per statement of financial position Receivables 406,370 — — 406,370 Derivative financial instruments — 1,196 — 1,196 Trade receivables 950,569 — — 950,569 Other investments 176,470 — 38,803 215,273 Cash and cash equivalents 320,088 199,877 — 519,965 Total 1,853,497 201,073 38,803 2,093,373 As of December 31, 2019 (in $ thousands) Liabilities at fair value through profit or loss Amortized Total (ii) Liabilities as per statement of financial position Other liabilities — 88,403 88,403 Trade payables — 836,204 836,204 Derivative financial instruments 3,024 — 3,024 Finance lease liabilities — 338,765 338,765 Borrowings — 2,188,674 2,188,674 Total 3,024 3,452,046 3,455,070 28. FINANCIAL RISK MANAGEMENT (continued) Fair Value by Hierarchy Following the requirements contained in IFRS 13, Ternium categorizes each class of financial instrument measured at fair value in the statement of financial position into three levels, depending on the significance of the judgment associated with the inputs used in making the fair value measurements: – Level 1 comprises financial assets and financial liabilities whose fair values have been determined on the basis of quoted prices (unadjusted) in active markets for identical assets or liabilities. – Level 2 includes financial assets and financial liabilities for which fair values have been estimated using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). – Level 3 comprises financial instruments for which inputs to estimate fair value of the assets or liabilities are not based on observable market data (unobservable inputs). The following table presents the assets and liabilities that are measured at fair value as of December 31, 2020 and 2019: Fair value measurement as of December 31, 2020 Description Total Level 1 Level 2 Level 3 (*) Financial assets at fair value through profit or loss / OCI Cash and cash equivalents 259,020 259,020 — — Other investments 236,240 233,611 — 2,629 Derivative financial instruments 1,572 — 1,572 — Total assets 496,832 492,631 1,572 2,629 Financial liabilities at fair value through profit or loss / OCI Derivative financial instruments 6,358 — 6,358 — Total liabilities 6,358 — 6,358 — Fair value measurement as of December 31, 2019 Description Total Level 1 Level 2 Level 3 Financial assets at fair value through profit or loss / OCI Cash and cash equivalents 199,877 199,877 — — Other investments 38,803 38,803 — — Derivative financial instruments 1,196 — 1,196 — Total assets 239,876 238,680 1,196 — Financial liabilities at fair value through profit or loss / OCI Derivative financial instruments 3,024 — 3,024 — Total liabilities 3,024 — 3,024 — (*) The fair value of financial instruments classified as level 3 is not obtained from observable market information, but from measurements of the asset portfolio at market value provided by the fund manager. The evolution of such instruments during the year ended December 31, 2020, corresponds to the initial investment and to the changes in its fair value. 28. FINANCIAL RISK MANAGEMENT (continued) There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy and there were no transfers from Level 1 and Level 2 to Level 3. The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by Ternium is the current mid price. These instruments are included in Level 1 and comprise primarily corporate and sovereign debt securities. The fair value of financial instruments that are not traded in an active market (such as certain debt securities, certificates of deposits with original maturity of more than three months, forward and interest rate derivative instruments) is determined by using valuation techniques which maximize the use of observable market data when available and rely as little as possible on entity specific estimates. If all significant inputs required to value an instrument are observable, the instrument is included in Level 2. Ternium values its assets and liabilities included in this level using mid prices, interest rate curves, broker quotations, current exchange rates and forward rates volatilities obtained from market contributors as of the valuation date. If one or more of the significant inputs are not based on observable market data, the instruments are included in Level 3. Ternium values its assets and liabilities in this level using observable market inputs, information provided by fund managers and management assumptions which reflect the Company’s best estimate on how market participants would price the asset or liability at measurement date. 3) Accounting for derivative financial instruments and hedging activities Derivative financial instruments are initially recognized in the statement of financial position at cost and subsequently measured at fair value. Changes in fair value are disclosed under “Other financial income (expenses), net” line item in the income statement. Ternium does not hedge its net investments in foreign entities. Ternium designates certain derivatives as hedges of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction. These transactions are classified as cash flow hedges (mainly interest rate swaps). The effective portion of the fair value of derivatives that are designated and qualify as cash flow hedges is recognized within other comprehensive income. Amounts accumulated in other comprehensive income are recognized in the income statement in the same period than any offsetting losses and gains on the hedged item. The gain or loss relating to the ineffective portion is recognized immediately in the income statement. The fair value of Ternium derivative financial instruments (asset or liability) continues to be reflected on the statement of financial position. For transactions designated and qualifying for hedge accounting, Ternium documents at inception the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedge transactions. The Company also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. At December 31, 2020, the effective portion of designated cash flow hedges amounts to $(0.2) million (net of taxes) and is included as “Cash flow hedges” line item in the statement of comprehensive income. 28. FINANCIAL RISK MANAGEMENT (continued) The fair values of various derivative instruments used for hedging purposes are disclosed in Note 21. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Changes in the fair value of any derivative instruments that do not qualify for hedge accounting under IAS 39 are recognized immediately in the income statement. 4) Fair value estimation The estimated fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. For the purpose of estimating the fair value of financial assets and liabilities with maturities of less than one year, the Company uses the market value less any estimated credit adjustments. For other investments, the Company uses quoted market prices. As most borrowings incorporate floating rates that approximate market rates and the contractual repricing occurs mostly every one month, the fair value of the borrowings approximates their carrying amount and it is not disclosed separately. In assessing the fair value of derivatives and other financial instruments, Ternium uses a variety of methods, including, but not limited to, estimated discounted value of future cash flows using assumptions based on market conditions existing at each year end. |
THE COVID-19 PANDEMIC AND ITS I
THE COVID-19 PANDEMIC AND ITS IMPACT ON TERNIUM | 12 Months Ended |
Dec. 31, 2020 | |
Unusual or Infrequent Items, or Both, Disclosure1 [Abstract] | |
THE COVID-19 PANDEMIC AND ITS IMPACT ON TERNIUM | THE COVID-19 PANDEMIC AND ITS IMPACT ON TERNIUM A novel strain of coronavirus (SARS-CoV-2) was reported to have surfaced in China in December 2019, spreading to the rest of the world in the first quarter of 2020. In March 2020, the World Health Organization declared COVID-19, the disease caused by the SARS-CoV-2 virus, a global pandemic. The COVID-19 outbreak is impacting economic activity worldwide. As a result of the COVID-19 pandemic, the steel industry in the Americas experienced during the second quarter of 2020 significant decreases in capacity utilization to adapt to lockdowns and/or weak demand in most of its markets. This situation improved during the second half of 2020, and as of the end of the year most of the steel industry has significantly increased production levels. The second quarter was the hardest hit in 2020 by the effects of lower production and reduced shipments tied to the COVID-19 pandemic. Each jurisdiction where Ternium operates adopted specific measures in response to the pandemic and the Company adjusted its operations on a country-by-country basis to comply with applicable rules and requirements and adapt to a rapidly evolving scenario. Even though the effects of the pandemic in steel demand abated during the third quarter of 2020, and as of the issue date of these consolidated financial statements all of Ternium’s industrial facilities are back to normal production levels, uncertainty persists regarding the extent and timing of the future spread of COVID-19 and the imposition or relaxation of protective measures in the future. 29. THE COVID-19 PANDEMIC AND ITS IMPACT ON TERNIUM (continued) In order to safeguard the health and safety of its employees, customers and suppliers, Ternium continues to apply preventive measures, including remote working for a significant portion of white collar employees, implementing a special operations protocol to ensure social distancing and providing medical assistance and supplies to onsite employees. As of the date of these consolidated financial statements, remote work and other work arrangements have not materially adversely affected Ternium's ability to conduct operations. In addition, these alternative working arrangements have not adversely affected our financial reporting systems, internal control over financial reporting or disclosure controls and procedures. The Company took several measures during the second quarter of 2020 to cope with the pandemic, including the rescheduling of certain capital expenditures and the withdrawal of the annual dividend payment for the 2019 fiscal year. This, together with a significant improvement in the steel business environment during the second half of 2020, resulted in strengthened cash flows and financial condition as of the issue date of these consolidated financial statements. In 2020, cash flows from operating activities amounted to $1,761 million, and capital expenditures were $560 million. With total borrowings less cash and cash equivalents and other current and non-current investments of $371 million as of December 31, 2020 and a manageable debt amortization schedule, Ternium has in place non-committed credit facilities and management believes it has adequate access to the credit markets. Considering its financial position and the funds provided by operating activities, management believes that the Company has sufficient resources to satisfy its current working capital needs and service its debt. Management also believes that Ternium's liquidity and capital resources give adequate flexibility to manage the revised capital spending programs and address short-term changes in business conditions, and that it is unlikely that Ternium will not be able to meet its financial covenants. Similarly, management does not expect to disclose or incur any material COVID-19-related contingencies. |
FOREIGN EXCHANGE RESTRICTIONS I
FOREIGN EXCHANGE RESTRICTIONS IN ARGENTINE SUBSIDIARIES | 12 Months Ended |
Dec. 31, 2020 | |
All Currencies [Abstract] | |
FOREIGN EXCHANGE RESTRICTIONS IN ARGENTINE SUBSIDIARIES | FOREIGN EXCHANGE RESTRICTIONS IN ARGENTINA Ternium’s Argentine subsidiary, Ternium Argentina S.A., is currently operating in a complex and volatile economic environment. The recession the Argentine economy was going through at the end of 2019 coupled with the effects of the COVID-19 outbreak in March 2020 significantly affected economic activity and macroeconomic variables in the country. Starting in September 2019, the Argentine Central Bank has been imposing increasingly restrictive regulations on foreign exchange transactions, aimed at avoiding further deterioration of a low level of foreign currency reserves. These measures have not had a significant effect on Ternium Argentina’s ability to access the foreign exchange market for commercial payments. Access to the Argentine foreign exchange market to pay dividends and services to related parties requires prior central bank approval, which is granted on a very restricted basis. Current Argentine Central Bank regulations deter companies from converting its Argentine Pesos (ARS) holdings via alternate means due to consequent loss of access to the official foreign exchange market. Ternium Argentina stated in its annual accounts as of and for the year ended December 31, 2020, that revenues amounted to $1,823 million (2019: $1,789 million), net profit from continuing operations to $268 million (2019: $131 million), total assets to $3,268 million (2019: $2,969 million), total liabilities to $430 million (2019: $338 million) and shareholders’ equity to $2,838 million (2019: $2,631 million). 30. FOREIGN EXCHANGE RESTRICTIONS IN ARGENTINA (continued) Ternium Argentina’s financial position in ARS as of December 31, 2020, amounted to $278 million in monetary assets and $165 million in monetary liabilities. Our Argentine subsidiary’s ARS denominated assets and liabilities are valued at the prevailing official exchange rate. Although most of Ternium Argentina’s cash holdings are either denominated or payable in ARS, our exposure to the ARS as of December 31, 2020 was diminished due to hedging strategies using derivative instruments as well as the investment in US dollar and inflation-linked securities. As the context of volatility and uncertainty remains in place as of the issue date of these consolidated financial statements, additional Argentine Central Bank regulations that could be imposed in the future could further restrict our Argentine subsidiary’s ability to access the official foreign exchange market. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of significant accounting policies [Abstract] | |
Group accounting | Subsidiary companies and transactions with non-controlling interests Subsidiaries are all entities over which the Company has control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases. The Company uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at the fair values at the acquisition date. Indemnification assets are recognized at the same time that the Company recognizes the indemnified item and measures them on the same basis as the indemnified item, subject to the need for a valuation allowance for uncollectible amounts. The Company measures the value of a reacquired right recognized as an intangible asset on the basis of the remaining contractual term of the related contract regardless of whether market participants would consider potential contractual renewals in determining its fair value. On an acquisition-by-acquisition basis, the Company recognizes any non-controlling interest in the acquiree at the non-controlling interest's proportionate share of the acquiree's net assets. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Company's share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognized directly in the income statement. The measurement period is the earlier of the date that the acquirer receives the information that it is looking for or cannot obtain the information and one year after the acquisition date. Where the accounting for a business combination is not complete by the end of the reporting period in which the business combination occurred provisional amounts are reported. The Company treats transactions with non-controlling interests as transactions with equity owners of the Company. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. 3. ACCOUNTING POLICIES (continued) When the Company ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss. Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. However, the fact that the functional currency of some subsidiaries is their respective local currency, generates some financial gains (losses) arising from intercompany transactions, that are included in the consolidated income statement under Other financial expenses, net. (2) Investments in non-consolidated companies Associated companies are those entities in which Ternium has significant influence, but which it does not control. Joint arrangements are understood as combinations in which there are contractual agreements by virtue of which two or more companies hold an interest in companies that undertake operations or hold assets in such a way that any financial or operating decision is subject to the unanimous consent of the partners. A joint arrangement is classed as a joint operation if the parties hold rights to its assets and have obligations in respect of its liabilities or as a joint venture if the venturers hold rights only to the investee's net assets. Investments in non-consolidated companies (associated companies and joint ventures) are accounted for using the equity method of accounting. Under this method, interests in joint ventures and associates are initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the Company’s share of the post-acquisition profits or losses in the income statement, and its share of post-acquisition changes in reserves recognized in reserves and in other comprehensive income in the income statement. Unrealized gains on transactions among the Company and its non-consolidated companies are eliminated to the extent of the Company’s interest in such non-consolidated companies; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. When the Company’s share of losses in a non-consolidated company equals or exceeds its interest in such non-consolidated company, the Company does not recognize further losses unless it has incurred obligations or made payments on behalf of such non-consolidated company. The Company’s investment in associates and joint ventures includes notional goodwill identified on acquisition. The Company determines at each reporting date whether there is any objective evidence that the investment is impaired. If this is the case, the group calculates the amount of impairment as the difference between the recoverable amount of the investment and its carrying value and recognizes the amount within “Equity on earnings (losses) of non-consolidated companies”. |
Foreign currency translation | Functional and presentation currency Items included in the financial statements of each of the Company's subsidiaries and associated companies are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). Except for the non-consolidated companies whose functional currencies are their local currencies, Ternium determined that the functional currency of its subsidiaries is the U.S. dollar. Although Ternium is located in Luxembourg, it operates in several countries with different currencies. The $ is the currency that best reflects the economic substance of the underlying events and circumstances relevant to Ternium as a whole. (2) Subsidiary companies The results and financial position of all the group entities (except for the ones which operated in a hyperinflationary economy) that have a functional currency different from the presentation currency, are translated into the presentation currency as follows: (i) assets and liabilities are translated at the closing rate of each statement of financial position; (ii) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and (iii) all resulting translation differences are recognized within other comprehensive income. In the case of a sale or other disposition of any such subsidiary, any accumulated translation differences would be recognized in the income statement as part of the gain or loss on sale. (3) Transactions in currencies other than the functional currency Transactions in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the date of the transactions or valuation where items are re-measured. At the end of each reporting period: (i) monetary items denominated in currencies other than the functional currency are translated using the closing rates, (ii) non-monetary items that are measured in terms of historical cost in a currency other than the functional currency are translated using the exchange rates prevailing at the date of the transactions; and (iii) non-monetary items that are measured at fair value in a currency other than the functional currency are translated using the exchange rates prevailing at the date when the fair value was determined. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in currencies other than the functional currency are recorded as gains and losses from foreign exchange and included in "Other financial income (expenses), net" in the consolidated income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the "fair value gain or loss," while translation differences on non-monetary financial assets such as equities classified as fair value through other comprehensive income are included in other gains/(losses). |
Financial instruments | Non derivative financial instruments Non derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables. The Company classifies its financial instruments in the following measurement categories: – Amortized cost: instruments that are held for collection or repayment of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income and expenses from these financial instruments are included in finance income or expense using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in finance income or expense, together with foreign exchange gains and losses. Impairment losses are presented as separate line items in the statement of profit or loss. – Fair value through other comprehensive income (“FVOCI”): financial assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the statement of profit or loss. – Fair value through profit or loss (“FVPL”): financial instruments that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented net within other gains/(losses) in the period in which it arises. The classification depends on the Company’s business model for managing the financial instruments and the contractual terms of the cash flows. For financial instruments measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at FVOCI. At initial recognition, the Company measures a financial instrument at its fair value plus, in the case of a financial instrument not at FVPL, transaction costs that are directly attributable to the acquisition of the financial instrument. Transaction costs of financial instruments carried at FVPL are expensed in profit or loss. Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. 3. ACCOUNTING POLICIES (continued) The classification depended on the nature and purpose of the financial assets and was determined at the time of initial recognition. Financial assets and liabilities were recognized and derecognized on the settlement date. Financial assets were initially measured at fair value, net of transaction costs, except for those financial assets classified as financial assets at fair value through profit or loss. Financial liabilities, including borrowings, were initially measured at fair value, net of transaction costs and subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis. Impairment of financial assets The Company assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the receivables, see note 3 (i) for further details. For loans and receivables category and for held-to-maturity investments, the amount of the loss was measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset was reduced and the amount of the loss was recognized in the consolidated income statement. If, in a subsequent period, the amount of the impairment loss decreased and the decrease could be related objectively to an event occurring after the impairment was recognized, the reversal of the previously recognized impairment loss was recognized in the consolidated income statement. Derivative financial instruments Information about accounting for derivative financial instruments and hedging activities is included in Note 28 "Financial Risk management" and Note 3 (y). |
Property, plant and equipment | Property, plant and equipment Land and buildings comprise mainly factories and offices. All property, plant and equipment are recognized at historical acquisition or construction cost less accumulated depreciation and accumulated impairment (if applicable), except for land, which is carried at acquisition cost less accumulated impairment (if applicable). There are no material residual values for property, plant and equipment items. Major overhaul and rebuilding expenditures are recognized as a separate asset when future economic benefits are expected from the item, and the cost can be measured reliably. Ordinary maintenance expenses on manufacturing properties are recorded as cost of products sold in the period in which they are incurred. Where a tangible fixed asset comprises major components having different useful lives, these components are accounted for as separate items. Spare parts are included in property, plant and equipment. Depreciation method is reviewed at each year end. Depreciation is calculated using the straight-line method to amortize the cost of each asset to its residual value over its estimated useful life as follows: Land No depreciation Buildings and improvements 10-50 years Production equipment 5-40 years Vehicles, furniture and fixtures and other equipment 3-20 years Property, plant and equipment used in mining activities are depreciated over its useful life or over the remaining life of the mine if shorter and there is no alternative use possible. The assets' useful lives are reviewed, and adjusted if appropriate, at each year end. The re-estimation of assets useful lives by the Company did not materially affect depreciation charges in 2020, 2019 and 2018. Gains and losses on disposals are determined by comparing the proceeds with the corresponding carrying amounts and are included in the income statement. If the carrying amount of an asset were greater than its estimated recoverable amount, it would be written down to its recoverable amount (see Note 3 (f) "Impairment"). Amortization charges are included in cost of sales, selling, general and administrative expenses. 3. ACCOUNTING POLICIES (continued) (2) Right-of-use assets The Company is a party to lease contracts for: – Land – Plants and equipment for the production of industrial gases and other production materials. – Transportation and maintenance equipment. – Warehouses and office spaces. These leases are recognized, measured and presented in accordance to IFRS 16 “Leases”, following the guidelines described below. Accounting by the lessee The Company recognizes a right-of-use asset and a lease liability at the commencement date of each lease contract that grants the right to control the use of an identified asset during a period of time. The commencement date is the date in which the lessor makes an underlying asset available for use by the lessee. The Company applied exemptions for leases with a duration lower than 12 months, with a value lower than thirty thousand dollars and/or with clauses related to variable payments. These leases have been considered as short-term leases and, accordingly, no right-of-use asset or lease liability have been recognized. At initial recognition, the right-of-use asset is measured considering: – The value of the initial measurement of the lease liability; – Any lease payments made at or before the commencement date, less any lease incentives; and – Any initial direct costs incurred by the lessee. After initial recognition, the right-of-use assets are measured at cost, less any accumulated depreciation and/or impairment losses, and adjusted for any re-measurement of the lease liability. Depreciation of the right-of-use asset is calculated using the straight-line method over the estimated duration of the lease contract, as follows: Buildings and facilities 1-29 years Machinery 1-12 years If the lease transfers ownership of the underlying asset to the Company by the end of the lease term, or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. Accounting by the lessor When the Company is acting as a lessor, each of its leases is classified as either operating or finance lease: – Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. – Leases where all substantial risks and rewards of ownership are transferred by the lessor to the lessee are classified as finance leases. |
Intangible assets | Information system projects Generally, costs associated with developing or maintaining computer software programs are recognized as an expense as incurred. However, costs directly related to the acquisition and implementation of information systems are recognized as intangible assets if they have a probable economic benefit exceeding the cost beyond one year and comply with the recognition criteria of IAS 38. Information system projects recognized as assets are amortized using the straight-line method over their useful lives, not exceeding a period of 3 years. Amortization charges are included in cost of sales, selling, general and administrative expenses. (2) Mining assets Mining assets include: (a) Mining licenses acquired; (b) Capitalized exploration and evaluation costs, reclassified from exploration and evaluation costs (see note 3 (e) 3); and (c) Capitalized developmental stripping costs (see note 3 (u)). Mining licenses were recognized as separate intangible assets upon the acquisition of the investment in Mexico and comprise the right to exploit the mines and are recognized at its fair value at acquisition date less accumulated amortization. These mining concessions were granted for a 50-year period; following the expiration of the initial concession term, the concessions are renewable for an additional 50-year term in accordance with, and subject to the procedures set forth in, applicable Mexican mining law. Amortization charge is calculated by using the unit-of-production method, on the basis of actual mineral extracted in each period compared to the estimated mineral reserves, and is included in cost of sales. Any change in the estimation of reserves is accounted for prospectively. The resulting amortization rate for the years ended December 31, 2020, 2019 and 2018, is approximately 4%, 5% and 8% per year, respectively. 3. ACCOUNTING POLICIES (continued) (3) Exploration and evaluation costs Exploration and evaluation activities involve the search for iron ore resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation costs are measured at cost. Costs directly associated with exploration and evaluation activities are capitalized as intangible assets until the determination of reserves is evaluated. The costs associated to the acquisition of machinery and equipment are recognized as property, plant and equipment. If it is determined that commercial discovery has been achieved, costs incurred are reclassified into Mining assets and amortization starts once production begins. Exploration costs are tested for impairment annually or whenever there are indicators that impairment exists. Indicators of impairment include, but are not limited to: – Rights to explore in an area have expired or will expire in the near future without renewal; – No further exploration and evaluation is planned or budgeted; – A decision to discontinue exploration and evaluation in an area because of the absence of commercial reserves; and – Sufficient data exists to indicate that the book value will not be fully recovered from future development and production. When analyzing the existence of impairment indicators, the exploration and evaluation areas from the mining cash-generating units will be evaluated. (4) Goodwill Goodwill represents the excess of the acquisition cost over the fair value of Ternium's participation in acquired companies' net assets at the acquisition date. Under IFRS 3, goodwill is considered to have an indefinite life and not amortized, but is subject to annual impairment testing. Goodwill is allocated to Cash-generating units ("CGU") for the purpose of impairment testing. The allocation is made to those cash-generating units expected to benefit from the business combination which generated the goodwill being tested. The impairment losses on goodwill cannot be reversed. As of December 31, 2020 and 2019, the carrying amount of goodwill allocated to the Mexico CGUs was $662.3 million, of which $619.8 million corresponds to steel operations and $42.5 million to mining operations. (5) Research and development Research expenditures are recognized as expenses as incurred. Development costs are recorded as cost of sales in the income statement as incurred because they do not fulfill the criteria for capitalization. Research and development expenditures for the years ended December 31, 2020, 2019 and 2018 totaled $8.3 million, $10.0 million and $8.9 million, respectively. 3. ACCOUNTING POLICIES (continued) (6) Customer relationships acquired in a business combination In accordance with IFRS 3 and IAS 38, Ternium has recognized the value of customer relationships separately from goodwill in connection with the acquisitions of Grupo Imsa and Ternium Colombia S.A.S. These customer relationships were amortized using the straight-line method over a useful life of approximately 10 years. As of December 31, 2018, these assets were fully amortized. In accordance with IFRS 3 and IAS 38, Ternium has recognized the value of customer relationships in connection with the acquisition of Ternium Staal B.V. as of September 7, 2017. The value of the slab commitment agreement by which Ternium Investments S.à r.l. is entitled to invoice, under certain conditions, the price difference between slabs and hot rolled coils will be amortized using the units of slabs sold method. (7) Trademarks acquired in a business combination In accordance with IFRS 3 and IAS 38, Ternium has recognized the value of trademarks separately from goodwill in connection with the acquisitions of Grupo Imsa and Ternium Colombia S.A.S. As of December 31, 2018, these assets were fully amortized. Trademarks are amortized using the straight-line method over a useful life of between 5 to 10 years. |
Impairment | Assets that have an indefinite useful life (including goodwill) are not subject to amortization and are tested annually for impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets that are subject to amortization and investments in affiliates are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less cost to sell and the value in use. To carry out these tests, assets are grouped at the lowest levels for which there are separately identifiable cash flows (each, a CGU). When evaluating long-lived assets for potential impairment, the Company estimates the recoverable amount based on the value in use of the corresponding CGU. The value in use of each CGU is determined on the basis of the present value of net future cash flows which will be generated by the assets tested. Determining the present value of future cash flows involves highly sensitive estimates and assumptions specific to the nature of each CGU's activities, including estimates and assumptions relating to amount and timing of projected future cash flows, expected changes in market prices, expected changes in the demand of Ternium products and services, selected discount rate and selected tax rate. Ternium uses, for the steel segment impairment tests, cash flow projections for the next five years based on past performance and expectations of market development; thereafter, it uses a perpetuity rate. For the mining segment impairment tests, Ternium uses cash flow projections for the whole lives of the mines based on past performance and expectations of market development. Application of the discounted cash flow (DCF) method to determine the value in use of a CGU begins with a forecast of all expected future net cash flows. Variables considered in forecasts include the gross domestic product (GDP) growth rates of the country under study and their correlation with steel demand, level of steel prices and estimated raw material costs as observed in industry reports. 3. ACCOUNTING POLICIES (continued) Cash flows are discounted at rates that reflect specific country and currency risks associated with the cash flow projections. The discount rates used are based on the weighted average cost of capital (WACC), which is considered to be a good indicator of cost of capital. As of December 31, 2020 the discount rate used to test goodwill allocated to the Steel and Mining Mexico CGUs for impairment was 8.87% (as of December 31, 2019, 9.80%). As a result of the above factors, actual cash flows and values could vary significantly from the forecasted future cash flows and related values derived using discounting techniques. Based on the information currently available, however, Ternium believes that it is not reasonably possible that the variation would cause the carrying amount to exceed the recoverable amount of the CGUs. Considering the economic situation in Argentina, the increase in the inflation rates, the devaluation of the Argentine peso and a weaker industrial environment as of June 30, 2020, the Company decided to assess the recoverability of its investments in Argentina, resulting in no impairment charges to be recognized. As of June 30, 2020, the discount rate used to test the investment in Argentine subsidiaries for impairment was 14.3% ( 14.3%. as of December 31, 2019). Also, considering the economic situation in Brazil as of June 30, 2020, the Company decided to assess the recoverability of its investments in Brazil, resulting in no impairment charges to be recognized. As of June 30, 2020, the discount rate used to test the investment in the Brazilian subsidiary for impairment was 10.3%. As of December 31, 2020, no new impairment triggers were detected in these CGUs and, consequently, no impairment tests were prepared. During the years 2020, 2019 and 2018, no impairment provisions were recorded in connection with assets that have an indefinite useful life (including goodwill). |
Other investments | Other investments consist primarily of investments in financial debt instruments and equity investments where the Company holds a minor equity interest and does not exert significant influence. All purchases and sales of investments are recognized on the settlement date, which is not significantly different from the trade date, which is the date that Ternium commits to purchase or sell the investment. Income from financial instruments at fair value through profit or loss is recognized in Other financial income (expenses), net in the consolidated income statement. The fair value of quoted investments is based on current bid prices. If the market for a financial investment is not active or the securities are not listed, the Company estimates the fair value by using standard valuation techniques. Dividends from investments in equity instruments are recognized in the income statement when the Company's right to receive payments is established. Certain fixed income financial instruments purchased by the Company have been categorized as at fair value through other comprehensive income. The results of these financial investments are recognized in Finance Income in the Consolidated Income Statement using the effective interest method. Unrealized gains and losses other than impairment and foreign exchange results are recognized in Other comprehensive income. On maturity or disposal, net gain and losses previously deferred in Other comprehensive income are recognized in Finance Income in the Consolidated Income Statement. |
Inventories | Inventories are stated at the lower of cost (calculated using the first-in-first-out "FIFO" method) or net realizable value. The cost of finished goods and goods in process comprises raw materials, direct labor, depreciation, other direct costs and related production overhead costs. It excludes borrowing costs. Goods acquired in transit at year end are valued at supplier's invoice cost. The cost of iron ore produced in our mines comprises all direct costs necessary to extract and convert stockpiled inventories into raw materials, including production stripping costs, depreciation of fixed assets related to the mining activity and amortization of mining assets for those mines under production. The Company assesses the recoverability of its inventories considering their selling prices, if the inventories are damaged, or if they have become wholly or partially obsolete (see note 3 (bb) (4)). |
Trade receivables and other receivables | Trade and other receivables are recognized initially at fair value, generally the original invoice amount. The Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables are grouped based on shared credit risk characteristics and the days past due. The Company keeps an allowance for trade receivables, recorded in an asset account to offset the trade receivables in an amount estimated sufficient to cover the losses resulting from the impossibility for the debtors to cancel the amounts owed. This allowance for trade receivables is recorded with a charge to selling expenses. |
Cash and cash equivalents | Cash and cash equivalents and highly liquid short-term securities are carried at fair market value or at a historical cost which approximates fair market value. For purposes of the cash flow statement, cash and cash equivalents comprise cash, bank current accounts and short-term highly liquid investments (original maturity of three months or less at date of acquisition) and overdrafts. In the consolidated statement of financial position, bank overdrafts are included in borrowings within current liabilities. |
Non-current assets (disposal groups) classified as held for sale | Non-current assets (disposal groups) are classified as assets held for sale, complying with the recognition criteria of IFRS 5, and stated at the lower of carrying amount and fair value less cost to sell if their carrying amount is recovered principally through a sale transaction rather than through continuing use. The carrying value of non-current assets classified as held for sale, at December 31, 2020 and 2019 totals $5.0 million and $2.1 million, respectively, which corresponds principally to land and other real estate items. Sale is expected to be completed within a one-year period. |
Borrowings | Borrowings are recognized initially for an amount equal to the net proceeds received. In subsequent periods, borrowings are stated at amortized cost following the effective interest method |
Lease liabilities | The lease liability is initially measured at the present value of the lease payments that are not paid at such date, including the following concepts: – Fixed payments, less any lease incentives receivable; – Variable lease payments that depend on an index or rate, initially measured using the index or rate as of the commencement date; – Amounts expected to be payable by the lessee under residual value guarantees; – The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and – Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. Variable lease liabilities with payments dependent on external factors, such as minimum volumes sold or used, are not included in the initial measurement of the lease liabilities and such payments are recognized directly in profit and loss. Lease payments are discounted using incremental borrowing rates for the location and currency of each lease contract or, if available, the rate implicit in the lease contract. The finance cost is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The lease term determined by the Company comprises: – Non-cancelable period of lease contracts; – Periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and – Periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option. After the commencement date, the Company measures the lease liability by: – Increasing the carrying amount to reflect interest on the lease liability; – Reducing the carrying amount to reflect lease payments made; and – Re-measuring the carrying amount to reflect any reassessment or lease modifications. |
Income taxes - current and deferred | The current income tax charge is calculated on the basis of the tax laws in force in the countries in which Ternium and its subsidiaries operate. Management evaluates positions taken in tax returns with respect to situations in which applicable tax regulation could be subject to interpretation. A liability is recorded for tax benefits that were taken in the applicable tax return but have not been recognized for financial reporting. 3. ACCOUNTING POLICIES (continued) Deferred income taxes are calculated using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting, nor taxable profit or loss. The principal temporary differences arise on fixed assets, intangible assets, inventories valuation and provisions for pensions. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantially enacted at year end. Under IFRS, deferred income tax assets (liabilities) are classified as non-current assets (liabilities). Deferred tax assets are recognized to the extent it is probable that future taxable income will be available to offset temporary differences. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associated companies, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. |
Employee liabilities | Post-employment obligations The Company has defined benefit and defined contribution plans. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognized in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually (at year end) by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. Past-service costs are recognized immediately in income. For defined benefit plans, net defined benefit liability/asset is calculated based on the surplus or deficit derived by the difference between the defined benefit obligations less plan assets. 3. ACCOUNTING POLICIES (continued) For defined contribution plans, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available. Mexico Ternium Mexico has defined benefit and defined contribution plans. The valuation of the liabilities for the defined benefit employee retirement plans (pensions and seniority premiums) covers all employees and is based primarily on their years of service, their present age and their remuneration at the date of retirement. The cost of the employee retirement plans (pension, health-care expenses and seniority premiums) is recognized as an expense in the year in which services are rendered in accordance with actuarial studies made by independent actuaries. The formal retirement plans are congruent with and complementary to the retirement benefits established by the Mexican Institute of Social Security. Additionally, the Company has established a plan to cover health-care expenses of retired employees. The Company has established a commitment for the payment of pensions and seniority premiums, as well as for health-care expenses. The defined contribution plans provide a benefit equivalent to the capital accumulated with the company's contributions, which are provided as a match of employees' contributions to the plan. The plan provides vested rights according to the years of service and the cause of retirement. Argentina Ternium Argentina implemented an unfunded defined benefit employee retirement plan for certain senior officers. The plan is designed to provide certain benefits to those officers (additional to those contemplated under applicable Argentine labor laws) in case of termination of the employment relationship due to certain specified events, including retirement. This unfunded plan provides defined benefits based on years of service and final average salary. (2) Termination benefits Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company recognizes termination benefits when it is demonstrably committed to either: (i) terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or (ii) providing termination benefits as a result of an offer made to encourage voluntary redundancy. (3) Other compensation obligations Employee entitlements to annual leave and long-service leave are accrued as earned. 3. ACCOUNTING POLICIES (continued) During 2007, Ternium launched an incentive retention program (the "Program") applicable to certain senior officers and employees of the Company, who will be granted a number of Units throughout the duration of the Program. The value of each of these Units is based on Ternium's shareholders' equity (excluding non-controlling interest). Also, the beneficiaries of the Program are entitled to receive cash amounts based on (i) the amount of dividend payments made by Ternium to its shareholders, and (ii) the number of Units held by each beneficiary to the Program. Units vest ratably over a period of four years and will be redeemed by the Company ten years after grant date, with the option of an early redemption at seven years after grant date. From 2018 units were vest ratably over the same period and will be mandatorily redeemed by the Company seven years after grant date. As the cash payment of the benefit is tied to the book value of the shares, and not to their market value, Ternium valued this long-term incentive program as a long term benefit plan as classified in IAS 19. As of December 31, 2020 and 2019, the outstanding liability corresponding to the Program amounts to $43.4 million and $36.2 million, respectively. The total value of the units granted to date under the program, considering the number of units and the book value per share as of December 31, 2020 and 2019, is $43.3 million and $36.0 million, respectively. Under Mexican law, Ternium's subsidiaries are required to pay their employees an annual benefit which is determined as a percentage of taxable profit for the year. (4) Social security contributions Social security laws in force in the countries in which the Company operates provide for pension benefits to be paid to retired employees from government pension plans and/or private fund managed plans to which employees may elect to contribute. As stipulated by the respective laws, Ternium Argentina and Ternium Mexico make monthly contributions calculated based on each employee's salary to fund such plans. The related amounts are expensed as incurred. No additional liabilities exist once the contributions are paid. |
Provisions | Ternium has certain contingencies with respect to existing or potential claims, lawsuits and other proceedings. Unless otherwise specified, Ternium accrues a provision for a present legal or constructive obligation as a result of a past event, when it is probable that future cost could be incurred and that cost can be reasonably estimated. Generally, accruals are based on developments to date, Ternium's estimates of the outcomes of these matters and the advice of Ternium's legal advisors. |
Trade payables | Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. |
Revenue recognition and other income | Revenue is recognized at a point of time from sales to direct customers upon the satisfaction of performance obligations, which occurs when control of the goods transfers to the customer and the customer obtains the benefits from the goods, the potential cash flows and the transaction price can be measured reliably, and it is probable that the Company will collect the consideration in connection with the exchange of the goods. The control over the goods is obtained by the customer depending on when the goods are made available to the shipper or the customer takes possession of the goods, depending on the delivery terms. The Company considers that it has completed its performance obligations when the goods are delivered to its customers or to a shipper who will transport the goods to its customers. The revenue recognized by the Company is measured at the transaction price of the consideration received or receivable to which the Company is entitled to, reduced by estimated returns and other customer credits, such as discounts and volume rebates, based on the expected value to be realized and after eliminating sales within the group. Interest income is recognized on an effective yield basis. |
Borrowing Costs | General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. Other borrowing costs are expensed in the period in which they are incurred. |
Cost of sales, selling, general and administrative expenses | Cost of sales and expenses are recognized in the income statement on the accrual basis of accounting. Commissions, freight and other selling expenses, including shipping and handling costs, are recorded in Selling, general and administrative expenses in the Consolidated Income Statement. |
Stripping costs | Stripping costs are the costs associated with the removal of overburden and other waste materials and can be incurred before the mining production commences (“development stripping”) or during the production stage (“production stripping”). 3. ACCOUNTING POLICIES (continued) Development stripping costs that contribute to the future economic benefits of mining operations are capitalized as intangible assets (Mining assets). Production stripping costs which are part of on-going activities are included in the cost of the inventory produced (that is extracted) at each mine during the period in which they are incurred. Capitalization of development stripping costs finishes when the commercial production of the mine commences. At that time, all development stripping costs are presented within Mining assets and depreciated on a unit-of-production basis. It is considered that commercial production begins when the production stage of mining operations begins and continues throughout the life of a mine. |
Mining development costs | Mining development costs are the costs associated to the activities related to the establishment of access to the mineral reserve and other preparations for commercial production. These activities often continue during production. Development expenditures are capitalized and classified as Work in progress. On completion of development, all assets included in Work in progress are individually reclassified to the appropriate category of property, plant and equipment and depreciated accordingly. |
Asset retirement obligations | Ternium records asset retirement obligations (“ARO”) initially at the fair value of the legal or constructive obligation in the period in which it is incurred and capitalizes the ARO by increasing the carrying amount of property, plant and equipment. The fair value of the obligation is determined as the discounted value of the expected future cash flows and is included in Provisions. The liability is accreted to its present value through net financing cost and the capitalized cost is depreciated based in the unit of production method. |
Earnings per share | Earnings per share are calculated by dividing the net income attributable to shareholders by the daily weighted average number of ordinary shares issued during the year, excluding the average number of shares of the parent Company held by the Group. There are no dilutive securities for the periods presented. |
Derivative financial instruments and hedging activities | Ternium designates certain derivatives as hedges of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction. These transactions are classified as cash flow hedges (mainly interest rate swaps, collars, currency forward contracts on highly probable forecast transactions and commodities contracts). The effective portion of the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in OCI. Amounts accumulated in OCI are recognized in the income statement in the same period as any offsetting losses and gains on the hedged item. The gain or loss relating to the ineffective portion is recognized immediately in the income statement. The fair value of Ternium derivative financial instruments (asset or liability) continues to be reflected in the statement of financial position. 3. ACCOUNTING POLICIES (continued) For transactions designated and qualifying for hedge accounting, Ternium documents the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedge transactions. At December 31, 2020 and 2019, the effective portion of designated cash flow hedges (net of taxes) amounted to $(0.2) million and $(0.1) million, respectively, and were included under "changes in the fair value of derivatives classified as cash flow hedges" line item in the statement of comprehensive income (see Note 26 (a)). More information about accounting for derivative financial instruments and hedging activities is included in Note 28 "Financial risk management". |
Treasury shares | Acquisitions of treasury shares are recorded at acquisition cost, deducted from equity until disposal. The gains and losses on disposal of treasury shares are recognized under "Reserves" in the consolidated statement of financial position. |
Cash flow | The consolidated statements of cash flows have been prepared using the indirect method and contain the use of the following expressions and their respective meanings: a) Operating activities: activities that constitute ordinary Group revenues, as well as other activities that cannot be qualified as investing or financing. b) Investing activities: acquisition, sale or disposal by other means of assets in the long-term and other investments not included in cash and cash equivalents. c) Financing activities: activities that generate changes in the size and composition of net equity and liabilities that do not form part of operating activities. |
Critical accounting estimates | The preparation of financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Management makes estimates and assumptions concerning the future. Actual results may differ significantly from these estimates under different assumptions or conditions. The principal estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. (1) Goodwill impairment test Assessment of the recoverability of the carrying value of goodwill requires significant judgment. Management evaluates goodwill allocated to the operating units for impairment on an annual basis or whenever there is an impairment indicator. 3. ACCOUNTING POLICIES (continued) Goodwill is tested at the level of the CGUs. Impairment testing of the CGUs is carried out and the value in use determined in accordance with the accounting policy stated in Note 3(f). The discount rates used for these tests are based on Ternium's weighted average cost of capital adjusted for specific country and currency risks associated with the cash flow projections. The discount rate used at December 31, 2020 was 8.87% and no impairment charge resulted from the impairment test performed. See notes 3(f) and 3(e)(4). (2) Income taxes Management calculates current and deferred income taxes according to the tax laws applicable to each subsidiary in the countries in which such subsidiaries operate. However, due to uncertain tax positions, certain adjustments necessary to determine the income tax provision are finalized only after the balance sheet is issued. In cases in which the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. Also, when assessing the recoverability of tax assets, management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies. (3) Loss contingencies Ternium is subject to various claims, lawsuits and other legal proceedings that arise in the ordinary course of business, including customer claims in which a third party is seeking reimbursement or indemnity. The Company's liability with respect to such claims, uncertain tax positions, lawsuits and other legal proceedings cannot be estimated with certainty. Periodically, management reviews the status of each significant matter and assesses potential financial exposure. If the potential loss from the claim or proceeding is considered probable and the amount can be reasonably estimated, a liability is recorded. Management estimates the amount of such liability based on the information available and the assumptions and methods it has concluded are appropriate, in accordance with the provisions of IFRS. Accruals for such contingencies reflect a reasonable estimate of the losses to be incurred based on information available, including the relevant litigation or settlement strategy, as of the date of preparation of these financial statements. As additional information becomes available, management will reassess its evaluation of the pending claims, lawsuits and other proceedings and revise its estimates. The loss contingencies provision amounts to $80.6 million and $613.4 million as of December 31, 2020 and 2019, respectively,. (4) Allowance for obsolescence of supplies and spare parts and slow-moving inventory Management assesses the recoverability of its inventories considering their selling prices or whether they are damaged or have become wholly or partly obsolete. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. The Company establishes an allowance for obsolete or slow-moving inventory in connection with finished goods and goods in process. The allowance for slow-moving inventory is recognized for finished goods and goods in process based on management's analysis of their aging. In connection with supplies and spare parts, the calculation is based on management's analysis of their aging, the capacity of such materials to be used based on their levels of preservation and maintenance, and their potential obsolescence due to technological change. 3. ACCOUNTING POLICIES (continued) As of December 31, 2020 and 2019, the Company recorded no allowance for net realizable value and $58.6 million and $62.2 million, respectively, as allowance for obsolescence. (5) Useful lives and Impairment of Property, Plant and Equipment and Other Long-lived Assets In determining useful lives, management considered, among others, the following factors: age, operating condition and level of usage and maintenance. Management conducted visual inspections for the purpose of (i) determining whether the current conditions of such assets are consistent with normal conditions of assets of similar age; (ii) confirming that the operating conditions and levels of usage of such assets are adequate and consistent with their design; (iii) establishing obsolescence levels and (iv) estimating life expectancy, all of which were used in determining useful lives. Management believes, however, that it is possible that the periods of economic utilization of property, plant and equipment may be different than the useful lives so determined. Furthermore, management believes that this accounting policy involves a critical accounting estimate because it is subject to change from period to period as a result of variations in economic conditions and business performance. When assessing whether an impairment indicator may exist, the Company evaluates both internal and external sources of information, such as the following: – whether significant changes with an adverse effect on the entity have taken place during the period, or will take place in the near future, in the technological, market, economic or legal environment in which the entity operates or in the market to which an asset is dedicated; – whether market interest rates or other market rates of return on investments have increased during the period, and those increases are likely to affect the discount rate used in calculating an asset's value in use and decrease the asset's recoverable amount materially; – whether the carrying amount of the net assets of the entity is more than its market capitalization; – whether evidence is available of obsolescence or physical damage of an asset. – whether significant changes with an adverse effect on the entity have taken place during the period, or are expected to take place in the near future, in the extent to which, or manner in which, an asset is used or is expected to be used. These changes include the asset becoming idle, plans to discontinue or restructure the operation to which an asset belongs, plans to dispose of an asset before the previously expected date, and reassessing the useful life of an asset as finite rather than indefinite; and – whether evidence is available from internal reporting that indicates that the economic performance of an asset is, or will be, worse than expected. Considering the economic situation in Argentina as of December 31, 2019, and as of June 30, 2020, the Company tested the recoverability of its investment in Ternium Argentina as of such dates, resulting in no impairment charges to be recognized. As of December 31, 2020, no new impairment triggers were detected and, consequently, no impairment test was prepared. The Company also tested the recoverability of its investments in the rest of the subsidiaries as of June 30, 2020, due to the pandemic, resulting in no impairment charges to be recognized. Considering that no impairment indicators were identified in the rest of subsidiaries as of December 31, 2020, the Company additionally tested the value of the goodwill for impairment, resulting in no impairment charges to be recognized. 3. ACCOUNTING POLICIES (continued) (6) Mining reserve estimates Reserves are estimates of the amount of product that can be economically and legally extracted from the Company’s mining concessions. In order to estimate reserves, a range of geological, technical and economic factors is required to be considered. Estimating the quantity and/or grade of reserves requires complex and difficult geological judgments to interpret the data. Because the economic assumptions used to estimate reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of reserves may change from period to period. Changes in reported reserves may affect the Company’s financial results and financial position, including the following: – Asset carrying amounts may be affected due to changes in estimated future cash flows. – Depreciation and amortization charges may change where such charges are determined by the units of production basis, or where the useful economic lives of assets change. – Stripping costs recognized in Mining assets or charged to results may change due to changes in stripping ratios or the units of production basis of depreciation. – Asset retirement obligations may change where changes in estimated reserves affect expectations about the timing or cost of these activities. (7) Post-employment obligation estimates The Company estimates at each year-end the provision necessary to meet its post-employment obligations in accordance with the advice from independent actuaries. The calculation of post-employment and other employee obligations requires the application of various assumptions. The main assumptions for post-employment and other employee obligations include discount rates, compensation growth rates, pension growth rates and life expectancy. Changes in the assumptions could give rise to adjustments in the results and liabilities recorded and might have an impact on the post-employment and other employee obligations recognized in the future. (8) Valuation of lease liabilities and right-of-use assets The application of IFRS 16 requires the Company to make judgments that affect the recognition and valuation of the lease liabilities and the right-of-use assets, including the determination of the contracts within the scope of the Standard, the contract term and the interest rate used for the discount of future cash flows. The lease term determined by the Company generally comprises non-cancellable period of leases contracts, periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. The same term is applied as economic useful life of right-of-use assets. 3. ACCOUNTING POLICIES (continued) The present value of the lease payments is determined using the discount rate representing a risk-free interest rate, adjusted by a spread related to the credit quality of the Company in each location and currency rate in connection with each lease contract. (9) Change in the functional currency of Argentine subsidiaries The determination of the functional currency requires management to make significant judgments. Ternium Argentina has performed a review of its functional currency and concluded that the currency that most faithfully represents the economics effects of the entity is the US dollar and therefore its functional currency has changed from the local currency to the US dollar. This change was prospective from January 1, 2020, and did not affect the balances at December 31, 2019, nor results or cash flows for the year then ended. It was based on the following considerations: – In the last two years, the exchange rate of the Argentine peso has been severely affected by devaluations against the US dollar and Argentina continues to be a highly inflationary economy. These events had very limited impact on sale's price in US dollar; – In this context, there is also a greater proportion of total production cost in US dollar; – Furthermore, new global trade restrictions, affecting the international trade of steel along with limited restrictions of imports in Argentina, have led to a greater correlation of local prices to global prices. – Factors to determine the functional currency were always mixed. However, currently most of revenue and costs of production are negotiated and priced in US dollar. The change in functional currency of Ternium Argentina significantly reduced the volatility of the Company’s earnings that was due to foreign exchange movements and the application of IAS 29 - Financial Reporting in Hyperinflationary Economies. |
Application of IAS 29 in financial reporting of Argentine subsidiaries and associates | Application of IAS 29 in financial reporting of Argentine subsidiaries and associates For the years ended December 31, 2019 and 2018, the Company applied IAS 29 “Financial Reporting in Hyperinflationary Economies”, which requires that the financial statements of entities whose functional currency is that of a hyperinflationary economy to be adjusted for the effects of changes in a suitable general price index and to be expressed in terms of the current unit of measurement at the closing date of the reporting period. Accordingly, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be computed in the non-monetary items. In order to conclude on whether an economy is categorized as hyperinflationary under the terms of IAS 29, the Standard details a series of factors to be considered, including the existence of a cumulative inflation rate in three years that approximates or exceeds 100%. Considering that the significant increase in inflation during 2018, which exceeded the 100% three-year cumulative inflation rate, and that the rest of the indicators did not contradict the conclusion that Argentina should be considered a hyperinflationary economy for accounting purposes, the Company considered that there was sufficient evidence to conclude that Argentina was a hyperinflationary economy under the terms of IAS 29 as from July 1, 2018, and, accordingly, applied IAS 29 as from that date in the financial reporting of its subsidiaries and associates with the Argentine peso as functional currency. 3. ACCOUNTING POLICIES (continued) According to this principle, the financial statements of an entity that reports in the currency of a hyperinflationary economy should be stated in terms of the measuring unit current on the date of the financial statements. All statement of financial position amounts that are not stated in terms of the measuring unit current on the date of the financial statements must be restated by applying a general price index. All income statement components must be stated in terms of the measuring unit current on the date of the financial statements, applying the change in the general price index that occurred since the date when revenues and expenses were originally recognized in the financial statements. The inflation adjustment on the initial balances was calculated by means of conversion factor derived from the Argentine price indexes published by the National Institute of Statistics (“INDEC”). The price index for the year periods ended December 31, 2019 and 2018, were 1.54 and 1.48, respectively. The main procedures for the above-mentioned adjustment are as follows: – Monetary assets and liabilities which are carried at amounts current at the balance sheet date are not restated because they are already expressed in terms of the monetary unit current at the balance sheet date. – Non-monetary assets and liabilities which are not carried at amounts current at the balance sheet date, and components of shareholders' equity are adjusted by applying the relevant conversion factors. – All items in the income statement are restated by applying the relevant conversion factors. – The effect of inflation on the Company’s net monetary position is included in the income statement, in Other financial income (expenses), net, under the caption “Inflation adjustment results”. – The ongoing application of the re-translation of comparative amounts to closing exchanges rates under IAS 21 and the hyperinflation adjustments required by IAS 29 will lead to a difference in addition to the difference arising on the adoption of hyperinflation accounting. The comparative figures in these consolidated financial statements presented in a stable currency are not adjusted for subsequent changes in the price level or exchange rates. This resulted in an initial difference, arising on the adoption of hyperinflation accounting, between the closing equity of the previous year and the opening equity of the current year. The Company recognized this initial difference directly in equity. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of notes and other explanatory information [Abstract] | |
Disclosure of interests in subsidiaries | Detailed below are the companies whose financial statements have been consolidated and accounted for interest in these consolidated financial statements. 2. BASIS OF PRESENTATION (continued) Company Country of Organization Main activity Percentage of ownership 2020 2019 2018 Ternium S.A. Luxembourg Holding 100.00 % 100.00 % 100.00 % Ternium Investments S.à.r.l. Luxembourg Holding 100.00 % 100.00 % 100.00 % Ternium Internacional España S.L. (1) Spain Holding and marketing of steel products 100.00 % 100.00 % 100.00 % Ternium USA Inc. (1) USA Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium Solutions S.A. (formerly Tericer Trading S.A.) (1) Uruguay Other services 100.00 % 100.00 % 100.00 % Ternium Internationaal B.V. (1) Netherlands Marketing of steel products 100.00 % 100.00 % 100.00 % Ternium Argentina S.A. (2) Argentina Manufacturing and selling of flat steel products 62.46 % 61.50 % 60.94 % Impeco S.A. (3) Argentina Manufacturing of pipe products 62.49 % 61.54 % 60.97 % Prosid Investments S.A. (4) Uruguay Holding 62.46 % 61.51 % 60.94 % Ternium Mexico S.A. de C.V. (5) Mexico Manufacturing and selling of steel products 89.21 % 88.94 % 88.78 % Hylsa S.A. de C.V. (6) Mexico Manufacturing and selling of steel products 89.21 % 88.94 % 88.78 % Las Encinas S.A. de C.V. (6) Mexico Exploration, exploitation and pelletizing of iron ore 89.21 % 88.94 % 88.78 % Ferropak Comercial S.A. de C.V. (6) Mexico Scrap services company 89.21 % 88.94 % 88.78 % Transamerica E. & I. Trading Corp. (6) USA Scrap services company 89.21 % 88.94 % 88.78 % Técnica Industrial S.A. de C.V. (6) Mexico Services 89.21 % 88.94 % 88.78 % Galvacer Chile S.A. (6) Chile Distributing company 89.21 % 88.94 % 88.78 % Ternium Gas México S.A. de C.V. (7) Mexico Energy services company 89.21 % 88.94 % 88.78 % Consorcio Minero Benito Juarez Peña Colorada S.A.de C.V. (8) Mexico Exploration, exploitation and pelletizing of iron ore 44.61 % 44.47 % 44.39 % Peña Colorada Servicios S.A. de C.V. (8) Mexico Services 44.61 % 44.47 % 44.39 % Exiros B.V. (8) Netherlands Procurement and trading services 50.00 % 50.00 % 50.00 % Servicios Integrales Nova de Monterrey S.A. de C.V. (9) Mexico Medical and Social Services 66.47 % 66.26 % 66.14 % Ternium Internacional Nicaragua S.A. Nicaragua Manufacturing and selling of steel products 99.38 % 99.38 % 99.38 % Ternium Internacional Honduras S.A. de C.V. Honduras Manufacturing and selling of steel products 99.18 % 99.18 % 99.18 % Ternium Internacional El Salvador S.A. de C.V. El Salvador Manufacturing and selling of steel products 99.92 % 99.92 % 99.92 % Ternium Internacional Costa Rica S.A. Costa Rica Manufacturing and selling of steel products 99.98 % 99.98 % 99.98 % Ternium Internacional Guatemala S.A. (10) Guatemala Manufacturing and selling of steel products 99.98 % 99.98 % 99.98 % Ternium Colombia S.A.S. (10) Colombia Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium del Cauca S.A.S. (10) Colombia Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium Siderúrgica de Caldas S.A.S. (10) Colombia Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium del Atlántico S.A.S (10) Colombia Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium Procurement S.A. (10) Uruguay Marketing of steel products and procurement services 100.00 % 100.00 % 100.00 % Technology & Engineering Services S.A. (10) Uruguay Engineering and other services 100.00 % 100.00 % 100.00 % Tenigal S. de R.L. de C.V. (11) Mexico Manufacturing and selling of steel products 51.00 % 51.00 % 51.00 % Ternium Treasury Services S.A. Uruguay Financial Services 100.00 % 100.00 % 100.00 % Soluciones Integrales de Gestión S.A. (12) Argentina Other services 100.00 % 100.00 % 100.00 % 2. BASIS OF PRESENTATION (continued) Company Country of Organization Main activity Percentage of ownership 2020 2019 2018 Ternium Participaçoes S.A. (12) Brazil Holding 100.00 % 100.00 % 100.00 % Ternium Brasil Ltda. (13) Brazil Manufacturing and selling of steel products 100.00 % 100.00 % 100.00 % Ternium International Inc. (14) Panama Marketing of steel products — 100.00 % 100.00 % Ternium Investments Switzerland AG (15) Switzerland Holding — 100.00 % 100.00 % Ternium Internacional S.A. (16) Uruguay Marketing of steel products — 100.00 % 100.00 % Ternium Staal B.V. (17) Netherlands Holding and marketing of steel products — 100.00 % 100.00 % Imsamex Ecuador S.A. (18) Ecuador Distributing company — — 88.78 % Ternium Solutions A.G. (19) Switzerland Other services — — 100.00 % Ternium Ingeniería y Servicios de México S.A. de C.V. (20) Mexico Engineering and other services — — 99.89 % Ternium International USA Corporation (21) USA Marketing of steel products — — 100.00 % (1) Indirectly through Ternium Investments S.à.r.l. Total voting rights held: 100.00%. (2) Indirectly through Ternium Internacional España S.L. Total voting rights held 62.46%. Before that, indirectly through Ternium Internacional España S.L. total voting rights was 61.50%. in 2019 and 60.94% in 2018. (3) Indirectly through Ternium Argentina S.A. and Soluciones Integrales de Gestión S.A. Total voting rights held 100.00%. (4) Indirectly through Ternium Argentina S.A. and Ternium Procurement S.A. Total voting rights held 100.00%. (5) Indirectly through Ternium Argentina S.A. and Ternium Internacional España S.L. Total voting rights held 100.00%. (6) Indirectly through Ternium Mexico S.A. de C.V. Total voting rights held: 100.00%. (7) Indirectly through Ternium Mexico S.A. de C.V. and Tenigal S. de R.L. de C.V. Total voting rights held: 100.00%. (8) Total voting rights held: 50.00%. The Company recognizes the assets, liabilities, revenue and expenses in relation to its interest in the joint operation. (9) Indirectly through Ternium Mexico S.A. de C.V. Total voting rights held: 74.50%. (10) Indirectly through Ternium Internacional España S.L. Total voting rights held: 100.00%. (11) Indirectly through Ternium Internacional España S.L. Total voting rights held: 51.00%. (12) Indirectly through Ternium Investments S.à r.l. and Ternium Internacional España S.L. Total voting rights held: 100.00%. (13) Since the second quarter of 2020, indirectly through Ternium Internacional España S.L. Total voting rights held: 100.00%. Before that, indirectly through Ternium Investments S.à r.l.. (14) This company was dissolved as of December 7, 2020. (15) This company was dissolved as of December 4, 2020. (16) This company was dissolved as of July 14, 2020. (17) Merged into Ternium Internacional España S.L. as of May 27, 2020, effective as of January 1, 2020. (18) This company was dissolved as of December 19, 2019. (19) This company was dissolved as of July 3, 2019. (20) This company was dissolved as of March 29, 2019. (21) Merged with Ternium USA Inc. during the first quarter of 2019. |
ACCOUNTING POLICIES (Tables)
ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of significant accounting policies [Abstract] | |
Disclosure of detailed information about property, plant and equipment | Depreciation is calculated using the straight-line method to amortize the cost of each asset to its residual value over its estimated useful life as follows: Land No depreciation Buildings and improvements 10-50 years Production equipment 5-40 years Vehicles, furniture and fixtures and other equipment 3-20 years Year ended December 31, 2020 Land Buildings Production equipment Vehicles, furniture and fixtures Work in progress Spare parts Right-of-use Total Values at the beginning of the year Cost 594,435 3,412,904 6,931,970 268,398 1,119,348 140,028 355,928 12,823,011 Accumulated depreciation — (1,618,882) (4,377,389) (218,033) — (19,656) (49,470) (6,283,430) Net book value at January 1, 2020 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 Opening net book value 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 Translation differences (134) (297) (68) (37) (6) — — (542) Additions — 18,552 1,487 2,345 482,606 20,362 6,101 531,453 Capitalized borrowing costs — — — — 13,100 — — 13,100 Disposals / Consumptions — (183) (124) (1,106) (3,775) (13,782) (3,254) (22,224) Indexation — — — — — — (9,388) (9,388) Transfers (1,540) 137,379 247,824 23,352 (407,911) (3,200) — (4,096) Depreciation charge — (136,217) (339,050) (16,761) — (7,628) (43,547) (543,203) Closing net book value 592,761 1,813,256 2,464,650 58,158 1,203,362 116,124 256,370 6,504,681 Values at the end of the year Cost 592,761 3,567,732 7,179,626 289,877 1,203,362 143,309 349,003 13,325,670 Accumulated depreciation — (1,754,476) (4,714,976) (231,719) — (27,185) (92,633) (6,820,989) Net book value at December 31, 2020 592,761 1,813,256 2,464,650 58,158 1,203,362 116,124 256,370 6,504,681 Year ended December 31, 2019 Land Buildings Production equipment Vehicles, furniture and fixtures Work in progress Spare parts Right-of-use Total Values at the beginning of the year Cost 587,174 3,303,174 6,748,644 264,782 617,950 124,220 55,288 11,701,232 Accumulated depreciation — (1,520,976) (4,126,060) (217,394) — (13,275) (5,918) (5,883,623) Net book value at January 1, 2019 587,174 1,782,198 2,622,584 47,388 617,950 110,945 49,370 5,817,609 Opening net book value 587,174 1,782,198 2,622,584 47,388 617,950 110,945 49,370 5,817,609 Effect of initial recognition under IFRS 16 — — — — — — 280,493 280,493 Translation differences (596) (16,174) (9,959) (316) (1,716) (1,089) (1,263) (31,113) Additions 7,531 9,367 2,063 4,821 923,599 38,476 40,864 1,026,721 Capitalized borrowing costs — — — — 16,085 — — 16,085 Disposals / Consumptions — (750) (117) (1,204) (2,988) (21,489) (18,901) (45,449) Transfers 326 154,544 264,122 14,843 (433,582) (50) — 203 Depreciation charge — (135,163) (324,112) (15,167) — (6,421) (44,105) (524,968) Closing net book value 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 Values at the end of the year Cost 594,435 3,412,904 6,931,970 268,398 1,119,348 140,028 355,928 12,823,011 Accumulated depreciation — (1,618,882) (4,377,389) (218,033) — (19,656) (49,470) (6,283,430) Net book value at December 31, 2019 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of entity's operating segments [Abstract] | |
Disclosure of operating segments | Year ended December 31, 2020 Steel Mining Inter-segment eliminations Total IFRS Net sales 8,679,513 390,541 (334,619) 8,735,435 Cost of sales (7,172,635) (268,905) 341,617 (7,099,923) Gross profit 1,506,878 121,636 6,998 1,635,512 Selling, general and administrative expenses (740,056) (22,826) — (762,882) Other operating income, net 208,965 (2,122) — 206,843 Operating income - IFRS 975,787 96,688 6,998 1,079,473 Management view Net sales 8,679,513 384,255 (328,333) 8,735,435 Operating income 1,046,623 101,937 689 1,149,249 Reconciliation items: Differences in Cost of sales (69,776) Operating income - IFRS 1,079,473 Financial income (expense), net 22,331 Equity in earnings (losses) of non-consolidated companies 57,555 Income before income tax expense - IFRS 1,159,359 Depreciation and amortization - IFRS (580,807) (50,244) — (631,051) Year ended December 31, 2019 Steel Mining Inter-segment eliminations Total IFRS Net sales 10,186,171 364,058 (357,411) 10,192,818 Cost of sales (8,552,493) (259,535) 359,588 (8,452,440) Gross profit 1,633,679 104,523 2,177 1,740,378 Selling, general and administrative expenses (885,146) (12,330) — (897,475) Other operating expenses, net 21,931 (268) — 21,663 Operating income - IFRS 770,466 91,924 2,177 864,566 Management view Net sales 10,230,650 417,619 (410,972) 10,237,297 Operating income 841,169 146,636 2,177 989,982 Reconciliation items: Differences in Cost of sales 99,315 Effect of inflation adjustment (Note 3 (cc)) (224,731) Operating income - IFRS 864,566 Financial income (expense), net (98,969) Equity in earnings (losses) of non-consolidated companies 60,967 Income before income tax expense - IFRS 826,564 Depreciation and amortization - IFRS (612,744) (48,368) — (661,112) 4. SEGMENT INFORMATION (continued) Year ended December 31, 2018 Steel Mining Inter-segment eliminations Total IFRS Net sales 11,453,420 282,000 (280,613) 11,454,807 Cost of sales (8,524,890) (239,893) 281,455 (8,483,328) Gross profit 2,928,530 42,107 842 2,971,479 Selling, general and administrative expenses (860,881) (15,883) — (876,764) Other operating expenses, net 12,950 706 — 13,656 Operating income - IFRS 2,080,599 26,930 842 2,108,371 Management view Net sales 11,723,883 333,892 (332,505) 11,725,270 Operating income 1,768,115 91,418 (6,213) 1,853,319 Reconciliation items: Differences in Cost of sales 541,492 Effect of inflation adjustment (Note 3 (cc)) (286,440) Operating income - IFRS 2,108,371 Financial income (expense), net (179,576) Equity in earnings (losses) of non-consolidated companies 102,772 Income before income tax expense - IFRS 2,031,567 Depreciation and amortization - IFRS (537,885) (51,415) — (589,299) |
Disclosure of geographical areas | Year ended December 31, 2020 Mexico Southern region Brazil and Other markets Total Net sales 4,660,278 1,762,785 2,312,372 8,735,435 Non-current assets (1) 4,726,342 919,490 1,767,432 7,413,264 Year ended December 31, 2019 Mexico Southern region Brazil and Other markets Total Net sales 5,477,690 1,704,132 3,010,996 10,192,818 Non-current assets (1) 4,584,802 1,008,860 1,889,757 7,483,419 Year ended December 31, 2018 Mexico Southern region Brazil and Other markets Total Net sales 6,345,137 1,941,168 3,168,502 11,454,807 Non-current assets (1) 4,093,288 1,071,705 1,665,140 6,830,133 (1) Includes Property, plant and equipment and Intangible assets. |
Disclosure of products and services | Year ended December 31, 2020 2019 2018 Semi-finished (1) 3,632 51,496 103,099 Slabs 1,047,311 1,753,090 1,818,235 Hot rolled (2) 2,880,055 3,275,941 3,961,144 Cold rolled 1,101,963 1,165,406 1,264,940 Coated (3) 3,015,132 3,263,463 3,506,040 Roll-formed and tubular (4) 413,337 380,688 437,514 Other products (5) 274,005 302,734 363,835 TOTAL SALES 8,735,435 10,192,818 11,454,807 (1) Semi-finished includes billets and round bars. (2) Hot rolled includes hot rolled flat products, merchant bars, reinforcing bars, stirrups and rods. (3) Coated includes tin plate and galvanized products. (4) Roll-formed and tubular includes tubes, beams, insulated panels, roofing and cladding, roof tiles, steel decks and pre-engineered metal building systems. (5) Other products include mainly sales of energy and pig iron. |
COST OF SALES (Tables)
COST OF SALES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Analysis of income and expense [abstract] | |
Schedule of cost of sales | Year ended December 31, 2020 2019 2018 Inventories at the beginning of the year 2,158,298 2,689,829 2,550,930 Effect of initial inflation adjustment (Note 3 (cc)) — — 191,708 Translation differences — (21,919) (413,436) Plus: Charges for the year Raw materials and consumables used and 5,359,938 6,165,654 6,961,704 Services and fees 112,924 151,373 158,551 Labor cost 546,045 611,615 699,447 Depreciation of property, plant and equipment 527,283 508,934 456,522 Amortization of intangible assets 14,624 17,805 25,374 Maintenance expenses 371,368 467,090 519,625 Office expenses 6,131 8,513 8,586 Insurance 10,641 9,674 8,769 Change of obsolescence allowance (1,279) 8,413 17,322 Recovery from sales of scrap and by-products (20,892) (23,793) (27,744) Others 16,623 17,550 15,799 Less: Inventories at the end of the year (2,001,781) (2,158,298) (2,689,829) Cost of Sales 7,099,923 8,452,440 8,483,328 |
SELLING, GENERAL AND ADMINIST_2
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Analysis of income and expense [abstract] | |
Schedule of selling, general and administrative expense | Year ended December 31, 2020 2019 2018 Services and fees (1) 53,220 79,283 76,066 Labor cost 192,854 215,418 241,552 Depreciation of property, plant and equipment 15,920 16,034 13,561 Amortization of intangible assets 73,224 118,339 93,842 Maintenance and expenses 4,275 4,894 5,096 Taxes 97,075 104,014 95,072 Office expenses 27,314 35,956 35,663 Freight and transportation 283,808 307,958 300,676 Increase (decrease) of allowance for doubtful accounts 336 (293) 1,629 Others 14,856 15,872 13,607 Selling, general and administrative expenses 762,882 897,475 876,764 (1) For the year ended December 31, 2020, it includes fees accrued for professional services rendered by PwC to Ternium S.A. and its subsidiaries that amounted to $3,289, including $3,132 for audit services, $41 for audit-related services, $95 for tax services and $21 for all other services. For the year ended December 31, 2019, it includes fees accrued for professional services rendered by PwC to Ternium S.A. and its subsidiaries that amounted to $3,804, including $3,485 for audit services, $54 for audit-related services, $190 for tax services and $75 for all other services. For the year ended December 31, 2018, it includes fees accrued for professional services rendered by PwC to Ternium S.A. and its subsidiaries that amounted to $4,704, including $3,937 for audit services, $61 for audit-related services, $281 for tax services and $425 for all other services. |
LABOR COSTS (Included Cost of_2
LABOR COSTS (Included Cost of sales and Selling, General and Administrative expenses) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Labor Costs [Abstract] | |
Schedule of labor costs | Year ended December 31, 2020 2019 2018 Wages, salaries and social security costs 677,541 759,678 884,536 Termination benefits 25,265 28,269 26,601 Post-employment benefits (Note 20 (i)) 36,093 39,086 29,862 Labor costs 738,899 827,033 940,999 |
OTHER OPERATING INCOME (EXPEN_2
OTHER OPERATING INCOME (EXPENSES), NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other operating income (expenses), net [Abstract] | |
Schedule of other operating income (expenses), net | Year ended December 31, 2020 2019 2018 Results of sundry assets 1,363 258 1,895 Provision for legal claims and other matters (Note 18 and 24 (ii)) — 1,997 7,625 Recovery of provision related to the ICMS action of unconstitutionality (Note 24 (i) (g)) (1) 380,075 — — Other operating income 20,093 19,408 4,136 Other operating income 401,531 21,663 13,656 Reversal of the asset in connection with the ICMS provision (Note 24 (i) (g)) (1) (194,065) — — Provision for legal claims and other matters (Note 18 and 24 (ii)) (623) — — Other operating expense (194,688) — — Other operating income (expenses), net 206,843 21,663 13,656 (1) It includes the gain generated by the recovery of the provision for contingencies related to the ICMS action of unconstitutionality ($380,075), partially compensated by the reversal of the related credit ($194,065). For more information about this case, see note 24 (i) (g)). |
OTHER FINANCIAL INCOME (EXPEN_2
OTHER FINANCIAL INCOME (EXPENSES), NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other financial income (expenses), net [Abstract] | |
Schedule of other financial income (expenses), net | Year ended December 31, 2020 2019 2018 Interest expense (46,644) (88,284) (131,172) Finance expense (46,644) (88,284) (131,172) Interest income 49,421 29,071 21,236 Finance income 49,421 29,071 21,236 Net foreign exchange gain (loss) 3,379 (136,897) (177,645) Inflation adjustment results — 117,956 191,427 Change in fair value of financial assets 6,104 — — Derivative contract results 11,933 (10,831) (99,259) Others (1,862) (9,984) 15,837 Other financial income (expenses), net 19,554 (39,756) (69,640) |
INCOME TAX EXPENSE (Tables)
INCOME TAX EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of income tax [Abstract] | |
Disclosure of major components of tax expense | Income tax expense for each of the years presented is as follows: Year ended December 31, 2020 2019 2018 Current tax Current tax (338,408) (256,460) (588,773) Effect of changes in tax law (1) — 4,178 (28,596) Deferred tax (Note 19) Deferred tax 39,895 38,785 232,485 Effect of changes in tax law (1) — 16,979 — Recovery of income tax (2) 7,025 — 15,449 Income tax expense (291,488) (196,519) (369,435) (1) For 2019, it includes mainly the application of the new tax law in Argentina that enables the tax inflation adjustment. The reduction of the tax rate in Argentina enacted in 2017 was modified in 2019, setting the corporate income tax rate to 30% for the year 2020 and to 25% from the year 2021 going forward. For 2018, it includes mainly the option exercised by the Company of the asset revaluation for tax purpose in Argentina, for which an amount of $28.6 million was included. (2) It includes the recovery of tax credits in Ternium Brasil Ltda. |
Schedule of effective income tax rate reconciliation | Income tax expense for the years ended December 31, 2020, 2019 and 2018 differed from the amount computed by applying the statutory income tax rate in force in each country in which the company operates to pre-tax income as a result of the following: Year ended December 31, 2020 2019 2018 Income before income tax 1,159,359 826,564 2,031,567 Income tax expense at statutory tax rate (350,896) (247,592) (604,493) Non taxable income 118,540 71,101 102,870 Non deductible expenses — (476) (16,201) Effect of currency translation on tax base (1) (66,157) 33,133 161,536 Increase of unrecognized tax losses carried-forward — (73,842) — Recovery of income tax 7,025 — 15,449 Effect of changes in tax law — 21,157 (28,596) Income tax expense (291,488) (196,519) (369,435) (1) Ternium applies the liability method to recognize deferred income tax on temporary differences between the tax bases of assets and their carrying amounts in the financial statements. By application of this method, Ternium recognizes gains and losses on deferred income tax due to the effect of the change in the value on the tax basis in subsidiaries, which have a functional currency different to their local currency, mainly Mexico and Argentina. |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of detailed information about property, plant and equipment [abstract] | |
Disclosure of detailed information about property, plant and equipment | Depreciation is calculated using the straight-line method to amortize the cost of each asset to its residual value over its estimated useful life as follows: Land No depreciation Buildings and improvements 10-50 years Production equipment 5-40 years Vehicles, furniture and fixtures and other equipment 3-20 years Year ended December 31, 2020 Land Buildings Production equipment Vehicles, furniture and fixtures Work in progress Spare parts Right-of-use Total Values at the beginning of the year Cost 594,435 3,412,904 6,931,970 268,398 1,119,348 140,028 355,928 12,823,011 Accumulated depreciation — (1,618,882) (4,377,389) (218,033) — (19,656) (49,470) (6,283,430) Net book value at January 1, 2020 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 Opening net book value 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 Translation differences (134) (297) (68) (37) (6) — — (542) Additions — 18,552 1,487 2,345 482,606 20,362 6,101 531,453 Capitalized borrowing costs — — — — 13,100 — — 13,100 Disposals / Consumptions — (183) (124) (1,106) (3,775) (13,782) (3,254) (22,224) Indexation — — — — — — (9,388) (9,388) Transfers (1,540) 137,379 247,824 23,352 (407,911) (3,200) — (4,096) Depreciation charge — (136,217) (339,050) (16,761) — (7,628) (43,547) (543,203) Closing net book value 592,761 1,813,256 2,464,650 58,158 1,203,362 116,124 256,370 6,504,681 Values at the end of the year Cost 592,761 3,567,732 7,179,626 289,877 1,203,362 143,309 349,003 13,325,670 Accumulated depreciation — (1,754,476) (4,714,976) (231,719) — (27,185) (92,633) (6,820,989) Net book value at December 31, 2020 592,761 1,813,256 2,464,650 58,158 1,203,362 116,124 256,370 6,504,681 Year ended December 31, 2019 Land Buildings Production equipment Vehicles, furniture and fixtures Work in progress Spare parts Right-of-use Total Values at the beginning of the year Cost 587,174 3,303,174 6,748,644 264,782 617,950 124,220 55,288 11,701,232 Accumulated depreciation — (1,520,976) (4,126,060) (217,394) — (13,275) (5,918) (5,883,623) Net book value at January 1, 2019 587,174 1,782,198 2,622,584 47,388 617,950 110,945 49,370 5,817,609 Opening net book value 587,174 1,782,198 2,622,584 47,388 617,950 110,945 49,370 5,817,609 Effect of initial recognition under IFRS 16 — — — — — — 280,493 280,493 Translation differences (596) (16,174) (9,959) (316) (1,716) (1,089) (1,263) (31,113) Additions 7,531 9,367 2,063 4,821 923,599 38,476 40,864 1,026,721 Capitalized borrowing costs — — — — 16,085 — — 16,085 Disposals / Consumptions — (750) (117) (1,204) (2,988) (21,489) (18,901) (45,449) Transfers 326 154,544 264,122 14,843 (433,582) (50) — 203 Depreciation charge — (135,163) (324,112) (15,167) — (6,421) (44,105) (524,968) Closing net book value 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 Values at the end of the year Cost 594,435 3,412,904 6,931,970 268,398 1,119,348 140,028 355,928 12,823,011 Accumulated depreciation — (1,618,882) (4,377,389) (218,033) — (19,656) (49,470) (6,283,430) Net book value at December 31, 2019 594,435 1,794,022 2,554,581 50,365 1,119,348 120,372 306,458 6,539,581 |
Disclosure of quantitative information about right-of-use assets | (2) Right-of-use assets Right-of-use assets Buildings Production equipment Vehicles, furniture and fixtures Total Values at the beginning of the year Cost 245,752 110,176 — 355,928 Accumulated depreciation (28,895) (20,575) — (49,470) Net book value at January 1, 2020 216,857 89,601 — 306,458 Opening net book value 216,857 89,601 — 306,458 Net additions 2,416 3,685 — 6,101 Disposal/Derecognition (1,666) (1,588) — (3,254) Indexation (7,024) (2,364) — (9,388) Depreciation charge (29,424) (14,123) — (43,547) Closing net book value 181,159 75,211 — 256,370 Values at the end of the year Cost 239,211 109,792 — 349,003 Accumulated depreciation (58,052) (34,581) — (92,633) Net book value at December 31, 2020 181,159 75,211 — 256,370 Right-of-use assets Buildings Production equipment Vehicles, furniture and fixtures Total Values at the beginning of the year Cost — 55,288 — 55,288 Accumulated depreciation — (5,918) — (5,918) Net book value at January 1, 2019 — 49,370 — 49,370 Opening net book value — 49,370 — 49,370 Effect of initial recognition under IFRS 16 226,936 52,469 1,088 280,493 Translation differences (115) (1,148) — (1,263) Net additions 18,931 21,933 — 40,864 Disposal/Derecognition — (18,094) (807) (18,901) Depreciation charge (28,895) (14,929) (281) (44,105) Closing net book value 216,857 89,601 — 306,458 Values at the end of the year Cost 245,752 110,176 — 355,928 Accumulated depreciation (28,895) (20,575) — (49,470) Net book value at December 31, 2019 216,857 89,601 — 306,458 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of detailed information about intangible assets [abstract] | |
Schedule of changes in intangible assets, net | Year ended December 31, 2020 Information system projects Mining assets Exploration and evaluation costs Customer relationships and other contractual rights Trademarks Goodwill Total Values at the beginning of the year Cost 342,857 256,736 19,522 604,929 73,935 662,307 1,960,286 Accumulated depreciation (268,476) (152,219) — (521,818) (73,935) — (1,016,448) Net book value at January 1, 2020 74,381 104,517 19,522 83,111 — 662,307 943,838 Opening net book value 74,381 104,517 19,522 83,111 — 662,307 943,838 Additions 25,698 2,034 23,845 — — — 51,577 Transfers 1,021 17,141 (17,146) — — — 1,016 Depreciation charge (25,259) (11,078) — (51,511) — — (87,848) Closing net book value 75,841 112,614 26,221 31,600 — 662,307 908,583 Values at the end of the year Cost 369,468 275,912 26,221 604,929 73,935 662,307 2,012,772 Accumulated depreciation (293,627) (163,298) — (573,329) (73,935) — (1,104,189) Net book value at December 31, 2020 75,841 112,614 26,221 31,600 — 662,307 908,583 Year ended December 31, 2019 Information system projects Mining assets Exploration and evaluation costs Customer relationships and other contractual rights Trademarks Goodwill Total Values at the beginning of the year Cost 320,600 216,203 23,209 604,931 73,935 662,307 1,901,185 Accumulated depreciation (248,839) (139,915) — (425,972) (73,935) — (888,661) Net book value at January 1, 2019 71,761 76,288 23,209 178,959 — 662,307 1,012,524 Opening net book value 71,761 76,288 23,209 178,959 — 662,307 1,012,524 Translation differences (463) — — — — — (463) Additions 31,812 12,580 24,265 — — — 68,657 Transfers (738) 27,954 (27,952) — — — (736) Depreciation charge (27,991) (12,305) — (95,848) — — (136,144) Closing net book value 74,381 104,517 19,522 83,111 — 662,307 943,838 Values at the end of the year Cost 342,857 256,736 19,522 604,929 73,935 662,307 1,960,286 Accumulated depreciation (268,476) (152,219) — (521,818) (73,935) — (1,016,448) Net book value at December 31, 2019 74,381 104,517 19,522 83,111 — 662,307 943,838 |
INVESTMENTS IN NON-CONSOLIDAT_2
INVESTMENTS IN NON-CONSOLIDATED COMPANIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of unconsolidated structured entities [line items] | |
Disclosure of interest in non-consolidated companies | As of December 31, 2020 2019 At the beginning of the year 513,648 495,241 Equity in earnings of non-consolidated companies 57,555 60,967 Other comprehensive income (93,598) (39,449) Dividends from non-consolidated companies (6,299) (3,111) At the end of the year 471,306 513,648 The principal investments in non-consolidated companies, all of which are unlisted, except for Usiminas, are: Company Country of incorporation Main activity Voting rights at Value at December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS Brazil Manufacturing and selling of steel products 34.39 % 34.39 % 422,948 486,643 Techgen S.A. de C.V. Mexico Provision of electric power 48.00 % 48.00 % 42,625 21,573 Other non-consolidated companies (1) 5,733 5,432 471,306 513,648 (1) It includes the investment held in Finma S.A.I.F., Techinst S.A., Recrotek S.R.L. de C.V. and Gas Industrial de Monterrey S.A. de C.V. |
Disclosure of interests in non-consolidated companies, summarized income statement | Summarized income statement (in million $) Year ended December 31, 2020 Year ended December 31, 2019 Net sales 3,133 3,790 Cost of sales (2,509) (3,312) Gross Profit 624 478 Selling, general and administrative expenses (161) (181) Other operating income (loss), net 61 (100) Operating income 524 197 Financial expenses, net (234) (132) Equity in earnings of associated companies 30 46 Profit (Loss) before income tax 320 111 Income tax benefit (97) (16) Net profit (loss) before non-controlling interest 223 95 Non-controlling interest in other subsidiaries (117) (41) Net profit (loss) for the year 106 54 |
USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | |
Disclosure of unconsolidated structured entities [line items] | |
Disclosure of interest in non-consolidated companies | As of December 31, 2020 and 2019, the value of the investment in Usiminas is comprised as follows: USIMINAS Value of investment As of December 31, 2020 As of December 31, 2019 At the beginning of the year 486,643 480,084 Share of results (1) 35,580 48,502 Other comprehensive income (93,237) (38,896) Dividends (6,038) (3,047) At the end of the year 422,948 486,643 (1) It includes the adjustment of the values associated to the purchase price allocation. The investment in Usiminas is based in the following calculation: Usiminas' shareholders' equity 2,860,944 Percentage of interest of the Company over shareholders' equity 20.41 % Interest of the Company over shareholders' equity 583,799 Purchase price allocation 46,664 Goodwill 200,018 Impairment (407,533) Total Investment in Usiminas 422,948 |
Disclosure of interests in non-consolidated companies, summarized balance sheet | Summarized balance sheet (in million $) As of December 31, 2020 As of December 31, 2019 Assets Non-current 3,487 4,336 Current 1,339 1,721 Other current investments 276 166 Cash and cash equivalents 661 311 Total Assets 5,763 6,534 Liabilities Non-current 540 718 Non-current borrowings 1,122 1,237 Current 836 687 Current borrowings 26 30 Total Liabilities 2,524 2,672 Non-controlling interest 378 378 Shareholders' equity 2,861 3,484 |
RECEIVABLES, NET - NON CURREN_2
RECEIVABLES, NET - NON CURRENT AND CURRENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables, net [Abstract] | |
Schedule of non-current receivables | As of December 31, 2020 2019 Receivables with related parties (Notes 25 and 13 (b)) 126,908 126,948 Employee advances and loans 2,326 1,572 Advances to suppliers for the purchase of property, plant and equipment 14,078 50,079 Advances to suppliers for the purchase of property, plant and equipment with related parties (Note 25) 2,452 7,827 Other receivables — 254,446 Other tax credits 97,202 150,721 Others 340 972 Receivables, net – Non-current 243,306 592,565 |
Schedule of current receivables | As of December 31, 2020 2019 Value added tax 188,027 162,121 Income tax credits 8,205 60,402 Other tax credits 29,834 38,913 Employee advances and loans 4,355 3,667 Advances to suppliers 12,009 10,134 Advances to suppliers with related parties (Note 25) 11,927 16,126 Expenses paid in advance 8,160 9,781 Government tax refunds on exports 6,499 14,805 Receivables with related parties (Note 25) 7,446 3,696 Others 12,147 15,068 Receivables, net – Current 288,609 334,713 |
TRADE RECEIVABLES, NET - NON _2
TRADE RECEIVABLES, NET - NON CURRENT AND CURRENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Trade and other receivables [abstract] | |
Schedule of trade receivables | As of December 31, 2020 2019 Trade receivables — 897 Trade receivables, net – Non-current — 897 Current accounts 832,544 920,937 Trade receivables with related parties (Note 25) 96,394 41,696 Allowance for doubtful accounts (Note 18) (10,500) (12,961) Trade receivables, net - Current 918,438 949,672 Trade receivables, net as of December 31, 2020 Total Fully performing Past due Guaranteed 387,718 373,384 14,334 Not guaranteed 541,220 518,914 22,306 Trade receivables 928,938 892,298 36,640 Allowance for doubtful accounts (Note 18) (10,500) — (10,500) Trade receivables, net 918,438 892,298 26,140 Trade receivables, net as of December 31, 2019 Total Fully performing Past due Guaranteed 469,087 424,052 45,035 Not guaranteed 494,443 453,184 41,259 Trade receivables 963,530 877,236 86,294 Allowance for doubtful accounts (Note 18) (12,961) — (12,961) Trade receivables, net 950,569 877,236 73,333 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Subclassifications of assets, liabilities and equities [abstract] | |
Schedule of Inventory | As of December 31, 2020 2019 Raw materials, materials and spare parts 606,429 731,901 Goods in process 838,403 975,553 Finished goods 313,257 396,401 Goods in transit 302,302 116,610 Obsolescence allowance (Note 18) (58,610) (62,167) Inventories, net 2,001,781 2,158,298 |
CASH, CASH EQUIVALENTS AND OT_2
CASH, CASH EQUIVALENTS AND OTHER INVESTMENTS - NON CURRENT AND CURRENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cash, cash equivalents and other investments [Abstract] | |
Schedule of other investments | As of December 31, 2020 2019 Investments in debt instruments and other 2,629 3,001 Other investments 252 252 Other investments, net – Non-current 2,881 3,253 |
Schedule of cash and cash equivalents | As of December 31, 2020 2019 (i) Other investments Other deposits with maturity of more than three months 813,527 212,271 Other investments - Current 813,527 212,271 (ii) Cash and cash equivalents Cash and banks 129,500 115,575 Restricted cash 54 69 Short-term bank deposits 259,020 199,877 Other deposits with maturity of less than three months 149,308 204,444 Cash and cash equivalents 537,882 519,965 |
ALLOWANCES AND PROVISIONS - N_2
ALLOWANCES AND PROVISIONS - NON CURRENT AND CURRENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Provisions [abstract] | |
Schedule of provisions | Provisions and allowances - Non current Liabilities Liabilities Legal claims and other matters Asset retirement obligation Year ended December 31, 2020 Values at the beginning of the year 613,352 26,556 Translation differences (151,466) (1,049) Additions 3,760 16,166 Reversals (384,933) — Uses (143) — At December 31, 2020 80,570 41,673 Year ended December 31, 2019 Values at the beginning of the year 643,950 24,554 Translation differences (25,701) 1,077 Additions 2,689 925 Reversals (4,417) — Uses (3,169) — At December 31, 2019 613,352 26,556 18. ALLOWANCES AND PROVISIONS – NON CURRENT AND CURRENT (continued) Provisions and allowances - Current Deducted from assets Liabilities Allowance for doubtful accounts Obsolescence allowance Asset retirement obligation Year ended December 31, 2020 Values at the beginning of the year 12,961 62,167 8,502 Translation differences (1,789) — (1,241) Additions 1,437 11,009 3,633 Reversals (1,101) (12,288) — Uses (1,008) (2,278) (6,379) At December 31, 2020 10,500 58,610 4,515 Year ended December 31, 2019 Values at the beginning of the year 14,346 55,454 9,851 Translation differences (285) (458) 348 Additions 787 18,036 5,201 Reversals (1,080) (9,623) — Uses (807) (1,242) (6,898) At December 31, 2019 12,961 62,167 8,502 |
DEFERRED INCOME TAX (Tables)
DEFERRED INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred income tax [Abstract] | |
Schedule of changes in deferred income tax | Changes in deferred income tax are as follows: As of December 31, 2020 2019 At the beginning of the year (239,740) (340,207) Translation differences (36) 25,166 Effect of changes in tax law (note 10) — 16,979 Credits directly to other comprehensive income 12,100 19,537 Deferred tax credit (note 10) 39,894 38,785 At the end of the year (187,782) (239,740) |
Changes in deferred tax assets and liabilities | The changes in deferred tax assets and liabilities (prior to offsetting the balances within the same tax jurisdiction) during the year are as follows: Deferred tax liabilities PP&E Inventories Intangible assets Other Total at At the beginning of the year (437,376) (63,460) (17,109) (1,189) (519,134) Translation differences 46 — — — 46 Income statement credit (charge) 11,190 33,273 (3,601) (832) 40,030 At the end of the year (426,140) (30,187) (20,710) (2,021) (479,058) Deferred tax assets Provisions Trade receivables Tax losses (1) Other Total at At the beginning of the year 45,654 10,200 42,766 180,774 279,394 Translation differences — — — (82) (82) Credits directly to other comprehensive income — — — 12,100 12,100 Income statement credit (charge) 6,688 (1,014) (11,682) 5,873 (136) At the end of the year 52,342 9,186 31,084 198,665 291,276 (1) As of December 31, 2020, the recognized deferred tax assets on tax losses amount to $31,084 and there are net unrecognized deferred tax assets of $0.2 billion and unrecognized tax losses amounting to $1.0 billion. These two last effects are connected to the acquisition of Ternium Brasil Ltda. Deferred tax liabilities PP&E Inventories Intangible assets Other Total at At the beginning of the year (522,455) (41,316) (15,926) (1,088) (580,785) Translation differences 27,077 2,604 316 — 29,997 Income statement credit (charge) 58,002 (24,748) (1,499) (101) 31,654 At the end of the year (437,376) (63,460) (17,109) (1,189) (519,134) Deferred tax assets Provisions Trade receivables Tax losses (2) Other Total at At the beginning of the year 72,947 11,265 33,382 122,984 240,578 Translation differences (572) (539) — (3,720) (4,831) Credits directly to other comprehensive income — — — 19,537 19,537 Effect of changes in tax law — — — 16,979 16,979 Income statement credit (charge) (26,721) (526) 9,384 24,994 7,131 At the end of the year 45,654 10,200 42,766 180,774 279,394 (2) As of December 31, 2019, the recognized deferred tax assets on tax losses amount to $42,766 and there are net unrecognized deferred tax assets of $0.4 billion and unrecognized tax losses amounting to $1.4 billion. These two last effects are connected to the acquisition of Ternium Brasil Ltda. |
Schedule of deferred tax assets and liabilities | The amounts shown in the statement of financial position (prior to offsetting the balances within the same tax jurisdiction) include the following: As of December 31, 2020 2019 Deferred tax assets to be recovered after more than 12 months 200,639 203,607 Deferred tax assets to be recovered within 12 months 90,637 75,787 Deferred tax liabilities to be settled after more than 12 months (446,891) (454,763) Deferred tax liabilities to be settled within 12 months (32,167) (64,371) (187,782) (239,740) |
OTHER LIABILITIES - NON CURRE_2
OTHER LIABILITIES - NON CURRENT AND CURRENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of other liabilities [Abstract] | |
Schedule of other non-current liabilities | As of December 31, 2020 2019 (i) Other liabilities - Non current Post-employment benefits 432,648 405,935 Other employee benefits 52,647 44,496 Asset retirement obligation (note 18) (1) 41,673 26,556 Other 24,888 30,616 Other liabilities – Non-current 551,856 507,603 (1) The asset in connection with this liability is included in Property, plant and equipment. |
Schedule of other liabilities recognized in statement of financial position | The amounts recognized in the consolidated statement of financial position are determined as follows: Post-employment benefits As of December 31, 2020 2019 Present value of unfunded obligations 432,648 405,935 Liability in the statement of financial position 432,648 405,935 Changes in the liability recognized in the consolidated statement of financial position are as follows: Post-employment benefits As of December 31, 2020 2019 At the beginning of the year 405,935 312,293 Transfers, new participants and funding of the plan (2) (6) Total expense 36,093 39,086 Remeasurements 36,907 67,601 Effect of changes in demographic assumptions (545) 674 Effect of changes in financial assumptions 30,830 55,059 Effect of experience adjustments 6,622 11,868 Translation differences (21,722) 12,228 Contributions paid (24,563) (25,267) At the end of the year 432,648 405,935 |
Schedule of amounts recognized in income statement | The amounts recognized in the consolidated income statement are as follows: Post-employment benefits Year ended December 31, 2020 2019 Current service cost 9,954 11,776 Interest cost 26,139 27,310 Total included in labor costs 36,093 39,086 |
Schedule of principal actuarial assumptions | The principal actuarial assumptions used were as follows: Year ended December 31, Mexico 2020 2019 Discount rate 6.50% 7.25% Compensation growth rate 6.00% - 7.00% 6.00% - 7.00% Year ended December 31, Argentina 2020 2019 Discount rate 6.00% - 7.00% 6.00% - 7.00% Compensation growth rate 2.00% - 3.00% 2.00% - 3.00% |
Schedule of sensitivity of the defined benefit obligation to changes in the weighted principal assumptions | The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is as follows: Impact on defined benefit obligation Change in assumption Increase in assumption Decrease in assumption Discount rate 1.00 % -10.0 % 12.3 % Compensation growth rate 1.00 % 2.6 % -1.8 % Pension growth rate 1.00 % -1.2 % 1.4 % Life expectancy 1 year -1.3 % 1.6 % |
Schedule of other current liabilities | As of December 31, 2020 2019 (ii) Other liabilities - Current Payroll and social security payable 113,117 107,999 VAT liabilities 70,226 58,799 Other tax liabilities 41,738 38,153 Termination benefits 400 493 Related Parties (Note 25) 2,004 2,074 Asset retirement obligation (Note 18) 4,515 8,502 Others 17,836 24,914 Other liabilities – Current 249,836 240,934 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of detailed information about financial instruments [abstract] | |
Disclosure of detailed information about hedging instruments | The net fair values of derivative financial instruments at December 31, 2020 and 2019 were as follows: As of December 31, 2020 2019 Contracts with positive fair value Foreign exchange contracts 1,572 1,196 1,572 1,196 Contracts with negative fair value Interest rate swap contracts (523) (17) Foreign exchange contracts (5,835) (3,007) (6,358) (3,024) Changes in fair value of derivative instruments designated as cash flow hedges for each of the years presented are included below: Cash flow hedges Gross amount Income tax Total At December 31, 2018 679 (202) 477 (Decrease) / Increase (475) 142 (333) Reclassification to income statement (276) 83 (193) At December 31, 2019 (72) 23 (49) (Decrease) / Increase (454) 136 (318) Reclassification to income statement 188 (56) 132 At December 31, 2020 (338) 103 (235) The net fair values of the exchange rate derivative contracts as of December 31, 2020 and December 31, 2019 were as follows: Fair value at December 31, Currencies Contract Notional amount 2020 2019 EUR/$ ND Forward - Buy EUR 53.7 million EUR 1,572 1,196 COP/$ ND Forward - Sell COP 291.5 billion COP (5,835) (3,007) (4,263) (1,811) COP: Colombian pesos; EUR: E.U. euros; $: U.S. dollars. |
LEASE LIABILITIES (Tables)
LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of leases [Abstract] | |
Disclosure of quantitative information about leases for lessee | Lease liabilities Current Non Current Total Year ended December 31, 2019 Values at the beginning of the year 8,030 65,798 73,828 Effect of initial recognition under IFRS 16 34,848 245,645 280,493 Translation differences 2,659 (7,139) (4,480) Net proceeds 1,474 24,545 26,019 Repayments (38,569) — (38,569) Interest accrued 16,755 — 16,755 Interest paid (15,281) — (15,281) Reclassifications 30,630 (30,630) — As of December 31, 2019 40,546 298,219 338,765 Year ended December 31, 2020 Values at the beginning of the year 40,546 298,219 338,765 Translation differences 1,082 (753) 329 Net proceeds 192 2,978 3,170 Indexation (811) (8,687) (9,498) Repayments (42,144) — (42,144) Interest accrued 16,116 — 16,116 Interest paid (12,635) — (12,635) Reclassifications 40,140 (40,140) — As of December 31, 2020 42,486 251,617 294,103 |
Disclosure of maturity analysis of lease payments | As of December 31, 2020 As of December 31, 2019 Commitments in relation to finance leases are payable as follows: Within one year 56,929 55,670 Later than one year but not later than five years 176,399 197,956 Later than five years 161,145 204,101 Minimum lease payments 394,473 457,727 Future finance charges (100,370) (118,962) Total Financial lease liabilities 294,103 338,765 The present value of finance lease liabilities is as follows: Within one year 42,486 40,546 Later than one year but not later than five years 134,857 149,830 Later than five years 116,760 148,389 Total minimum lease payments 294,103 338,765 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Borrowings [abstract] | |
Disclosure of detailed information about borrowings | As of December 31, 2020 2019 (i) Non-current Bank borrowings 1,334,369 1,639,604 Less: debt issue costs (7,080) (10,712) 1,327,289 1,628,892 (ii) Current Bank borrowings 399,249 564,497 Less: debt issue costs (3,645) (4,715) 395,604 559,782 Total Borrowings 1,722,893 2,188,674 The weighted average interest rates - which incorporate instruments denominated mainly in U.S. dollars and which do not include the effect of derivative financial instruments nor the devaluation of these local currencies - at year-end were as follows: As of December 31, 2020 2019 Bank borrowings 1.43 % 2.94 % Breakdown of borrowings by currency is as follows: As of December 31, Currencies Contract 2020 2019 $ Floating 1,557,483 1,977,617 $ Fixed 113,268 148,712 ARS Floating 8 10 MXN Floating 6,256 14,789 COP Floating 29,197 30,634 COP Fixed 16,681 16,912 1,722,893 2,188,674 $: U.S. dollars; ARS: Argentine pesos; COP: Colombian pesos; MXN: Mexican pesos. Ternium’s most significant borrowings as of December 31, 2020, were those incurred under Ternium México’s syndicated loan facilities, in order to finance the construction of its hot rolling mill, hot-dip galvanizing and painting lines in Pesqueria, under Tenigal’s syndicated loan facility, in order to finance the construction of its hot-dipped galvanizing mill in Pesquería, Mexico, under Ternium Investments S.à r.l., in order to finance the acquisition of Ternium Brasil, and under Ternium Brasil's syndicated loan facility, in order to finance solely activities related to its exports of goods: In $ million Date Borrower Type Original principal amount Outstanding principal amount as of December 31, 2020 Maturity Years 2012 and 2013 Tenigal Syndicated loan 200 50 July 2022 September 2017 Ternium Investments S.à r.l. Syndicated loan 1,500 400 September 2022 June 2018 Ternium Mexico Syndicated loan 1,000 500 June 2023 August 2019 Ternium Brasil Syndicated loan 500 500 August 2024 |
Disclosure of maturities of borrowings | The maturity of borrowings is as follows: Expected Maturity Date 2021 2022 2023 and thereafter At December 31, (1) 2020 2019 Fixed Rate 129,949 — — 129,949 165,623 Floating Rate 265,655 659,942 667,347 1,592,944 2,023,051 Total 395,604 659,942 667,347 1,722,893 2,188,674 (1) As most borrowings incorporate floating rates that approximate market rates and the contractual repricing occurs mostly every 1 month, the fair value of the borrowings approximates their carrying amount and it is not disclosed separately. Fixed rate borrowings are uncommitted short-term revolving loans and their fair value approximates to their carrying amount. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of related party [Abstract] | |
Disclosure of transactions between related parties | The following transactions were carried out with related parties: Year ended December 31, 2020 2019 2018 (i) Transactions (a) Sales of goods and services Sales of goods to non-consolidated parties 432,511 515,123 774,526 Sales of goods to other related parties 15,972 77,375 141,230 Sales of services and others to non-consolidated parties 173 171 176 Sales of services and others to other related parties 1,009 1,060 1,286 449,665 593,729 917,218 (b) Purchases of goods and services Purchases of goods from non-consolidated parties 347,638 408,309 483,182 Purchases of goods from other related parties 83,738 71,324 50,928 Purchases of services and others from non-consolidated parties 9,421 14,563 10,266 Purchases of services and others from other related parties 75,483 155,289 90,536 Purchases of goods and services in connection with lease contracts from other related parties 201 8,859 — 516,481 658,343 634,912 (c) Financial results Income with non-consolidated parties 7,182 9,478 9,330 Expenses in connection with lease contracts from other related parties (1,484) (945) — 5,698 8,533 9,330 (d) Dividends received Dividends from non-consolidated parties 6,299 3,111 8,837 6,299 3,111 8,837 (e) Other income and expenses Income (expenses), net with non-consolidated parties 765 929 1,012 Income (expenses), net with other related parties 1,042 986 492 1,807 1,915 1,504 25. RELATED PARTY TRANSACTIONS (continued) As of December 31, 2020 2019 (ii) Year-end balances (a) Arising from sales/purchases of goods/services and other transactions Receivables from non-consolidated parties 227,074 167,312 Receivables from other related parties 3,674 5,027 Advances from non-consolidated parties 6,647 8,017 Advances to suppliers with other related parties 7,732 15,936 Payables to non-consolidated parties (30,407) (44,784) Payables to other related parties (29,095) (41,849) Lease liabilities with other related parties (3,550) (7,310) 182,075 102,349 |
OTHER REQUIRED DISCLOSURES (Tab
OTHER REQUIRED DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of additional information [Abstract] | |
Schedule of condensed statement of comprehensive income | Statement of comprehensive income Cash flow hedges Currency translation adjustment Gross amount Income tax Total At December 31, 2018 679 (202) 477 (3,707,019) (Decrease) / Increase (475) 142 (333) (61,925) Reclassification to income statement (276) 83 (193) — At December 31, 2019 (72) 23 (49) (3,768,944) (Decrease) / Increase (454) 136 (318) (108,919) Reclassification to income statement 188 (56) 132 — At December 31, 2020 (338) 103 (235) (3,877,863) |
Schedule of condensed statement of cash flows | Statement of cash flows Year ended December 31, 2020 2019 2018 (i) Changes in working capital (1) Inventories 156,517 510,972 (186,409) Receivables and others (29,539) 6,175 8,652 Trade receivables (12,110) 161,454 (123,388) Other liabilities 37,517 (95,131) 17,138 Trade payables 200,410 (10,786) 55,430 352,795 572,684 (228,577) (ii) Income tax accrual less payments Tax accrued (Note 10) 291,488 196,519 369,435 Taxes paid (224,927) (405,324) (523,801) 66,561 (208,805) (154,366) (iii) Interest accruals less payments Interest accrued (Note 9 and 22) 62,760 104,855 131,172 Interest paid (55,769) (101,450) (144,186) 6,991 3,405 (13,014) (1) Changes in working capital are shown net of the effect of exchange rate changes. |
Schedule of reconciliation of changes in financial debt | Financial debt reconciliation Financial debt Finance lease liabilities Short term borrowings Long term borrowings Total At December 31, 2018 (73,828) (399,856) (1,637,101) (2,110,785) Cash flows 53,850 231,967 (297,780) (11,963) Reclassifications — (306,262) 306,262 — Effect of initial recognition under IFRS 16 (280,493) — — (280,493) Acquisitions - finance leases (26,019) — — (26,019) Foreign exchange adjustments (8,834) (79,365) — (88,199) Other non cash movements (3,441) (6,266) (273) (9,980) At December 31, 2019 (338,765) (559,782) (1,628,892) (2,527,439) Cash flows 54,779 511,203 (3,655) 562,327 Reclassifications — (306,414) 306,414 — Acquisitions - finance leases (3,170) — — (3,170) Foreign exchange adjustments (329) 4,962 — 4,633 Other non cash movements (6,618) (45,573) (1,156) (53,347) At December 31, 2020 (294,103) (395,604) (1,327,289) (2,016,996) |
FINANCIAL RISK MANAGEMENT (Tabl
FINANCIAL RISK MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of notes and other explanatory information [Abstract] | |
Sensitivity analysis for types of market risk | The following table shows a breakdown of Ternium’s assessed financial position exposure to currency risk as of December 31, 2020. Exposure to $ million EU euro (EUR) (98) Argentine peso (ARS) 101 Mexican peso (MXN) (591) Brazilian real (BRL) 111 Colombian peso (COP) (21) Other currencies (2) |
Disclosure of credit risk exposure | The investments in financial assets are as follows: At December 31, 2020 At December 31, 2019 Cash and cash equivalents 537,882 519,965 Other Investments - Current and Non-Current 816,157 215,273 Fixed Income (time-deposit, zero-coupon bonds, commercial papers) 579,917 176,470 Deposit certificates 451,857 160,933 Commercial papers 128,060 15,537 Bonds and other fixed income 233,611 38,803 Non - U.S. government securities 135,671 914 Corporate securities 97,940 37,889 Other notes 2,629 — The carrying amounts of the Company’s trade and other receivables as of December 31, 2020, are denominated in the following currencies: Currency $ million US dollar ($) 798 EU euro (EUR) 14 Argentine peso (ARS) 12 Mexican peso (MXN) 160 Brazilian real (BRL) 397 Colombian peso (COP) 68 Other currencies 1 1,450 |
Disclosure of how the entity manages liquidity risk | The table below analyses financial liabilities into relevant maturity groups based on the remaining period at the date of the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. $ million 2021 2022 2023 2024 Thereafter Borrowings 396 660 137 521 9 Interests to be accrued (1) 26 17 9 4 — Trade payables and other liabilities 1,024 13 8 7 38 Lease liabilities 42 42 42 28 140 Total 1,488 732 196 560 187 (1) These amounts do not include the effect of derivative financial instruments. |
Disclosure of financial assets | As of December 31, 2020 (in $ thousands) Amortized Assets at fair value through profit or loss Assets at fair value through OCI Total (i) Assets as per statement of financial position Receivables 153,527 — — 153,527 Derivative financial instruments — 1,572 — 1,572 Trade receivables 918,438 — — 918,438 Other investments 579,917 2,629 233,611 816,157 Cash and cash equivalents 278,862 259,020 — 537,882 Total 1,930,744 263,221 233,611 2,427,576 As of December 31, 2019 (in $ thousands) Amortized Assets at fair value through profit or loss Assets at fair value through OCI Total (i) Assets as per statement of financial position Receivables 406,370 — — 406,370 Derivative financial instruments — 1,196 — 1,196 Trade receivables 950,569 — — 950,569 Other investments 176,470 — 38,803 215,273 Cash and cash equivalents 320,088 199,877 — 519,965 Total 1,853,497 201,073 38,803 2,093,373 |
Disclosure of financial liabilities | As of December 31, 2020 (in $ thousands) Liabilities at fair value through profit or loss Amortized Total (ii) Liabilities as per statement of financial position Other liabilities — 86,070 86,070 Trade payables — 1,004,216 1,004,216 Derivative financial instruments 6,358 — 6,358 Finance lease liabilities — 294,103 294,103 Borrowings — 1,722,893 1,722,893 Total 6,358 3,107,282 3,113,640 As of December 31, 2019 (in $ thousands) Liabilities at fair value through profit or loss Amortized Total (ii) Liabilities as per statement of financial position Other liabilities — 88,403 88,403 Trade payables — 836,204 836,204 Derivative financial instruments 3,024 — 3,024 Finance lease liabilities — 338,765 338,765 Borrowings — 2,188,674 2,188,674 Total 3,024 3,452,046 3,455,070 |
Disclosure of financial instruments at fair value through profit or loss | The following table presents the assets and liabilities that are measured at fair value as of December 31, 2020 and 2019: Fair value measurement as of December 31, 2020 Description Total Level 1 Level 2 Level 3 (*) Financial assets at fair value through profit or loss / OCI Cash and cash equivalents 259,020 259,020 — — Other investments 236,240 233,611 — 2,629 Derivative financial instruments 1,572 — 1,572 — Total assets 496,832 492,631 1,572 2,629 Financial liabilities at fair value through profit or loss / OCI Derivative financial instruments 6,358 — 6,358 — Total liabilities 6,358 — 6,358 — Fair value measurement as of December 31, 2019 Description Total Level 1 Level 2 Level 3 Financial assets at fair value through profit or loss / OCI Cash and cash equivalents 199,877 199,877 — — Other investments 38,803 38,803 — — Derivative financial instruments 1,196 — 1,196 — Total assets 239,876 238,680 1,196 — Financial liabilities at fair value through profit or loss / OCI Derivative financial instruments 3,024 — 3,024 — Total liabilities 3,024 — 3,024 — (*) The fair value of financial instruments classified as level 3 is not obtained from observable market information, but from measurements of the asset portfolio at market value provided by the fund manager. The evolution of such instruments during the year ended December 31, 2020, corresponds to the initial investment and to the changes in its fair value. |
GENERAL INFORMATION - Narrative
GENERAL INFORMATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Billions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 06, 2010 |
Disclosure of general information about financial statements [Abstract] | ||||
Number of shares authorised (in shares) | 3,500,000,000 | 3,500,000,000 | 3,500,000,000 | |
Par value per share (in dollars per share) | $ 1 | $ 1 | $ 1 | |
Number of shares issued (in shares) | 2,004,743,442 | 2,004,743,442 | 2,004,743,442 | |
Difference between historical carrying amounts of assets and value at which assets were contributed | $ 4 | |||
Tax reserve | $ 6.3 | $ 6.3 |
BASIS OF PRESENTATION (Disclosu
BASIS OF PRESENTATION (Disclosure of interest in subsidiaries) (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Ternium S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium Investments S.a.r.l. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium Internacional Espana S.L. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium USA Inc. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium Solutions S.A. (formerly Tericer Trading S.A.) | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium Internationaal B.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium Argentina S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 62.46% | 61.50% | 60.94% |
Impeco S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 62.49% | 61.54% | 60.97% |
Prosid Investments S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 62.46% | 61.51% | 60.94% |
Ternium Mexico S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 89.21% | 88.94% | 88.78% |
Hylsa S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 89.21% | 88.94% | 88.78% |
Las Encinas S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 89.21% | 88.94% | 88.78% |
Ferropak Comercial S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 89.21% | 88.94% | 88.78% |
Transamerica E. & I. Trading Corp. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 89.21% | 88.94% | 88.78% |
Tecnica Industrial S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 89.21% | 88.94% | 88.78% |
Galvacer Chile SA | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 89.21% | 88.94% | 88.78% |
Ternium Gas Mexico S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 89.21% | 88.94% | 88.78% |
Consorcio Minero Benito Juarez Pena Colorada | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 44.61% | 44.47% | 44.39% |
Pena Colorada Servicios S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 44.61% | 44.47% | 44.39% |
Exiros B.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 50.00% | 50.00% | 50.00% |
Servicios Integrales Nova de Monterrey S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 66.47% | 66.26% | 66.14% |
Ternium Internacional Nicaragua S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 99.38% | 99.38% | 99.38% |
Ternium Internacional Honduras S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 99.18% | 99.18% | 99.18% |
Ternium Internacional El Salvador S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 99.92% | 99.92% | 99.92% |
Ternium Internacional Costa Rica S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 99.98% | 99.98% | 99.98% |
Ternium Internacional Guatemala S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 99.98% | 99.98% | 99.98% |
Ternium Colombia S.A.S | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium del Cauca S.A.S. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium Siderurgica de Caldas S.A.S. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium del Atlantico S.A.S | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium Procurement S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Technology & Engineering Services S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Tenigal S. de R.L. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 51.00% | 51.00% | 51.00% |
Ternium Treasury Services S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Soluciones Integrales de Gestion S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium Participacoes S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium Brasil Ltda. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Ternium International Inc. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | |
Ternium Investments Switzerland AG | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | |
Ternium Internacional S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | |
Ternium Staal B.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | |
Imsamex Ecuador, S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 88.78% | ||
Ternium Solutions A.G. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | ||
Ternium Ingenieria y Servicios de Mexico S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 99.89% | ||
Ternium International USA Corporation | |||
Disclosure of subsidiaries [line items] | |||
Proportion of ownership interest in subsidiary | 100.00% | ||
Consorcio Minero Benito Juarez Pena Colorada S.A.de C.V., Pena Colorada Servicios S.A. de C.V. & Exiros B.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 50.00% | ||
Ternium Investments S.a.r.l. | Ternium Internacional Espana S.L. & Ternium USA Inc, Ternium Solutions S.A. (formerly Tericer Trading S.A.) and Ternium Internationaal B.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 100.00% | ||
Ternium Internacional Espana S.L. | Ternium Argentina S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 62.46% | 61.50% | 60.94% |
Ternium Internacional Espana S.L. | Tenigal S. de R.L. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 51.00% | ||
Ternium Internacional Espana S.L. | Ternium Brasil Ltda. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 100.00% | ||
Ternium Internacional Espana S.L. | Ternium Internacional Guatemala S.A., Ternium Colombia S.A.S., Ternium del Cauca S.A.S., Ternium Siderurgica de Caldas S.A.S. and Ternium Del Atllantico S.A.S. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 100.00% | ||
Ternium Argentina S.A. and Soluciones Integrales de Gestion S.A | Impeco S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 100.00% | ||
Ternium Argentina S.A. and Ternium Procurement S.A. | Prosid Investments S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 100.00% | ||
Ternium Argentina S.A. and Ternium Internacional Espana S.L.U. | Ternium Mexico S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 100.00% | ||
Ternium Mexico S.A. de C.V. | Servicios Integrales Nova de Monterrey S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 74.50% | ||
Ternium Mexico S.A. de C.V. | Las Encinas S.A. de C.V., Ferropak Comercial S.A. de C.V., Transamerica E. and I. Trading Corp., Tecnica Industrial S.A. de C.V., Galvacer Chile SA & Imsamex Ecuador, S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 100.00% | ||
Ternium Mexico S.A. de C.V and Tenigal S. de R.L. de C.V. | Ternium Gas Mexico S.A. de C.V. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 100.00% | ||
Ternium Investments S.a.r.l & Ternium Internacional Espana S.L. | Soluciones Integrales de Gestion S.A. & Ternium Participacoes S.A. | |||
Disclosure of subsidiaries [line items] | |||
Proportion of voting rights held in subsidiary | 100.00% |
ACCOUNTING POLICIES (Useful lif
ACCOUNTING POLICIES (Useful life of property, plant & equipment) (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Buildings and improvements | Bottom of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life, property, plant and equipment | 10 years |
Buildings and improvements | Top of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life, property, plant and equipment | 50 years |
Production equipment | Bottom of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life, property, plant and equipment | 5 years |
Production equipment | Top of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life, property, plant and equipment | 40 years |
Vehicles, furniture and fixtures and other equipment | Bottom of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life, property, plant and equipment | 3 years |
Vehicles, furniture and fixtures and other equipment | Top of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life, property, plant and equipment | 20 years |
Buildings and facilities | Bottom of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life, right-of-use assets | 1 year |
Buildings and facilities | Top of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life, right-of-use assets | 29 years |
Production equipment | Bottom of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life, right-of-use assets | 1 year |
Production equipment | Top of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life, right-of-use assets | 12 years |
ACCOUNTING POLICIES (Intangible
ACCOUNTING POLICIES (Intangible assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of detailed information about intangible assets [line items] | |||
Mining concession, period | 50 years | ||
Mining concession, additional term | 50 years | ||
Research and development expense | $ 8.3 | $ 10 | $ 8.9 |
Information system projects | |||
Disclosure of detailed information about intangible assets [line items] | |||
Amortisation period (not exceeding) | 3 years | ||
Customer relationships and other contractual rights | |||
Disclosure of detailed information about intangible assets [line items] | |||
Useful lives or amortisation rates, intangible assets other than goodwill | 10 years | ||
Cash-generating units | |||
Disclosure of detailed information about intangible assets [line items] | |||
Goodwill | $ 662.3 | 662.3 | |
Steel | Cash-generating units | |||
Disclosure of detailed information about intangible assets [line items] | |||
Goodwill | $ 619.8 | $ 619.8 | |
Mining | |||
Disclosure of detailed information about intangible assets [line items] | |||
Amortisation rates, intangible assets other than goodwill | 4.00% | 5.00% | 8.00% |
Mining | Cash-generating units | |||
Disclosure of detailed information about intangible assets [line items] | |||
Goodwill | $ 42.5 | $ 42.5 | |
Bottom of range | Trademarks | |||
Disclosure of detailed information about intangible assets [line items] | |||
Useful lives or amortisation rates, intangible assets other than goodwill | 5 years | ||
Top of range | Trademarks | |||
Disclosure of detailed information about intangible assets [line items] | |||
Useful lives or amortisation rates, intangible assets other than goodwill | 10 years |
ACCOUNTING POLICIES (Impairment
ACCOUNTING POLICIES (Impairment) (Details) | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Disclosure of impairment loss and reversal of impairment loss [line items] | |||
Discount rate used in current estimate of value in use | 8.87% | ||
Cash-generating units | |||
Disclosure of impairment loss and reversal of impairment loss [line items] | |||
Discount rate used in current estimate of value in use | 8.87% | 9.80% | |
Argentina | Subsidiaries | |||
Disclosure of impairment loss and reversal of impairment loss [line items] | |||
Discount rate used in current estimate of value in use | 14.30% | 14.30% | |
Brazil | Subsidiaries | |||
Disclosure of impairment loss and reversal of impairment loss [line items] | |||
Discount rate used in current estimate of value in use | 10.30% |
ACCOUNTING POLICIES (Non-curren
ACCOUNTING POLICIES (Non-current assets (disposal groups) classified as held for sale) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of significant accounting policies [Abstract] | ||
Non-current assets or disposal groups classified as held for sale | $ 5 | $ 2.1 |
ACCOUNTING POLICIES (Employee l
ACCOUNTING POLICIES (Employee liabilities) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Deferred compensation share-based arrangements, liability | $ 43.4 | $ 36.2 |
Stock granted, value | $ 43.3 | $ 36 |
Incentive Retention Program | Capital Units | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Vesting period (years) | 4 years | |
Redemption, period (years) | 10 years | |
Early redemption, period (years) | 7 years |
ACCOUNTING POLICIES (Borrowing
ACCOUNTING POLICIES (Borrowing Costs) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of significant accounting policies [Abstract] | |||
Borrowing costs capitalised | $ 13.1 | $ 16.1 | $ 7.4 |
ACCOUTNING POLICIES (Derivative
ACCOUTNING POLICIES (Derivative financial instruments and hedging activities) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flow hedges | ||
Derivative instruments, gain (loss) [Line Items] | ||
Effective portion of hedge | $ (0.2) | $ (0.1) |
ACCOUNTING POLICIES (Critical a
ACCOUNTING POLICIES (Critical accounting estimates) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of changes in accounting estimates [line items] | ||
Discount rate used to test investment for impairment | 8.87% | |
Inventory write-down | $ 58.6 | $ 62.2 |
Legal claims and other matters | ||
Disclosure of changes in accounting estimates [line items] | ||
Provisions | $ 80.6 | $ 613.4 |
SEGMENT INFORMATION (Narrative)
SEGMENT INFORMATION (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Disclosure of operating segments [line items] | |
Number of reportable segments | 2 |
Las Encinas | |
Disclosure of operating segments [line items] | |
Percentage of equity interest | 100.00% |
Peña Colorada | |
Disclosure of operating segments [line items] | |
Proportion of ownership interest in subsidiary | 50.00% |
Steel | |
Disclosure of operating segments [line items] | |
Number of operating segments | 4 |
SEGMENT INFORMATION (Segment re
SEGMENT INFORMATION (Segment reporting information, by segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of operating segments [line items] | |||
Net sales | $ 8,735,435 | $ 10,192,818 | $ 11,454,807 |
Cost of sales | (7,099,923) | (8,452,440) | (8,483,328) |
Gross profit | 1,635,512 | 1,740,378 | 2,971,479 |
Selling, general and administrative expenses | (762,882) | (897,475) | (876,764) |
Other operating income (expenses), net | 206,843 | 21,663 | 13,656 |
Profit (loss) from operating activities | 1,079,473 | 864,566 | 2,108,371 |
Financial income (expense), net | 19,554 | (39,756) | (69,640) |
Equity in earnings (losses) of non-consolidated companies | 57,555 | 60,967 | 102,772 |
Profit before income tax expense | 1,159,359 | 826,564 | 2,031,567 |
Inter-segment eliminations | |||
Disclosure of operating segments [line items] | |||
Net sales | (334,619) | (357,411) | (280,613) |
Cost of sales | 341,617 | 359,588 | 281,455 |
Gross profit | 6,998 | 2,177 | 842 |
Selling, general and administrative expenses | 0 | 0 | 0 |
Other operating income (expenses), net | 0 | 0 | 0 |
Profit (loss) from operating activities | 6,998 | 2,177 | 842 |
Steel | Operating segments | |||
Disclosure of operating segments [line items] | |||
Net sales | 8,679,513 | 10,186,171 | 11,453,420 |
Cost of sales | (7,172,635) | (8,552,493) | (8,524,890) |
Gross profit | 1,506,878 | 1,633,679 | 2,928,530 |
Selling, general and administrative expenses | (740,056) | (885,146) | (860,881) |
Other operating income (expenses), net | 208,965 | 21,931 | 12,950 |
Profit (loss) from operating activities | 975,787 | 770,466 | 2,080,599 |
Mining | Operating segments | |||
Disclosure of operating segments [line items] | |||
Net sales | 390,541 | 364,058 | 282,000 |
Cost of sales | (268,905) | (259,535) | (239,893) |
Gross profit | 121,636 | 104,523 | 42,107 |
Selling, general and administrative expenses | (22,826) | (12,330) | (15,883) |
Other operating income (expenses), net | (2,122) | (268) | 706 |
Profit (loss) from operating activities | 96,688 | 91,924 | 26,930 |
Ternium | |||
Disclosure of operating segments [line items] | |||
Net sales | 8,735,435 | 10,237,297 | 11,725,270 |
Profit (loss) from operating activities | 1,149,249 | 989,982 | 1,853,319 |
Financial income (expense), net | 22,331 | (98,969) | (179,576) |
Equity in earnings (losses) of non-consolidated companies | 57,555 | 60,967 | 102,772 |
Profit before income tax expense | 1,159,359 | 826,564 | 2,031,567 |
Depreciation and amortisation expense | (631,051) | (661,112) | (589,299) |
Ternium | Inter-segment eliminations | |||
Disclosure of operating segments [line items] | |||
Net sales | (328,333) | (410,972) | (332,505) |
Profit (loss) from operating activities | 689 | 2,177 | (6,213) |
Depreciation and amortisation expense | 0 | 0 | 0 |
Ternium | Reconciling items | |||
Disclosure of operating segments [line items] | |||
Cost of sales | 69,776 | (99,315) | (541,492) |
Effect of inflation adjustment (Note 3 (cc)) | (224,731) | (286,440) | |
Ternium | Steel | Operating segments | |||
Disclosure of operating segments [line items] | |||
Net sales | 8,679,513 | 10,230,650 | 11,723,883 |
Profit (loss) from operating activities | 1,046,623 | 841,169 | 1,768,115 |
Depreciation and amortisation expense | (580,807) | (612,744) | (537,885) |
Ternium | Mining | Operating segments | |||
Disclosure of operating segments [line items] | |||
Net sales | 384,255 | 417,619 | 333,892 |
Profit (loss) from operating activities | 101,937 | 146,636 | 91,418 |
Depreciation and amortisation expense | $ (50,244) | $ (48,368) | $ (51,415) |
SEGMENT INFORMATION (Net sales
SEGMENT INFORMATION (Net sales and long lived assets by geographic areas) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of geographical areas [line items] | |||
Net sales | $ 8,735,435 | $ 10,192,818 | $ 11,454,807 |
Non-current assets | 7,413,264 | 7,483,419 | 6,830,133 |
Mexico | |||
Disclosure of geographical areas [line items] | |||
Net sales | 4,660,278 | 5,477,690 | 6,345,137 |
Non-current assets | 4,726,342 | 4,584,802 | 4,093,288 |
Southern region | |||
Disclosure of geographical areas [line items] | |||
Net sales | 1,762,785 | 1,704,132 | 1,941,168 |
Non-current assets | 919,490 | 1,008,860 | 1,071,705 |
Brazil and Other markets | |||
Disclosure of geographical areas [line items] | |||
Net sales | 2,312,372 | 3,010,996 | 3,168,502 |
Non-current assets | $ 1,767,432 | $ 1,889,757 | $ 1,665,140 |
SEGMENT INFORMATION (Revenue by
SEGMENT INFORMATION (Revenue by product) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of products and services [line items] | |||
Net sales | $ 8,735,435 | $ 10,192,818 | $ 11,454,807 |
Semi-finished | |||
Disclosure of products and services [line items] | |||
Net sales | 3,632 | 51,496 | 103,099 |
Slabs | |||
Disclosure of products and services [line items] | |||
Net sales | 1,047,311 | 1,753,090 | 1,818,235 |
Hot rolled | |||
Disclosure of products and services [line items] | |||
Net sales | 2,880,055 | 3,275,941 | 3,961,144 |
Cold rolled | |||
Disclosure of products and services [line items] | |||
Net sales | 1,101,963 | 1,165,406 | 1,264,940 |
Coated | |||
Disclosure of products and services [line items] | |||
Net sales | 3,015,132 | 3,263,463 | 3,506,040 |
Roll-formed and tubular | |||
Disclosure of products and services [line items] | |||
Net sales | 413,337 | 380,688 | 437,514 |
Other products | |||
Disclosure of products and services [line items] | |||
Net sales | 274,005 | 302,734 | 363,835 |
Total sales | |||
Disclosure of products and services [line items] | |||
Net sales | $ 8,735,435 | $ 10,192,818 | $ 11,454,807 |
COST OF SALES (Details)
COST OF SALES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Analysis of income and expense [abstract] | |||
Inventories at the beginning of the year | $ 2,158,298 | $ 2,689,829 | $ 2,550,930 |
Effect of initial inflation adjustment (Note 3 (cc)) | 0 | 0 | 191,708 |
Translation differences | 0 | (21,919) | (413,436) |
Raw materials and consumables used and other movements | 5,359,938 | 6,165,654 | 6,961,704 |
Services and fees | 112,924 | 151,373 | 158,551 |
Labor cost | 546,045 | 611,615 | 699,447 |
Depreciation of property, plant and equipment | 527,283 | 508,934 | 456,522 |
Amortization of intangible assets | 14,624 | 17,805 | 25,374 |
Maintenance expenses | 371,368 | 467,090 | 519,625 |
Office expenses | 6,131 | 8,513 | 8,586 |
Insurance | 10,641 | 9,674 | 8,769 |
Change of obsolescence allowance | (1,279) | 8,413 | 17,322 |
Recovery from sales of scrap and by-products | (20,892) | (23,793) | (27,744) |
Others | 16,623 | 17,550 | 15,799 |
Less: Inventories at the end of the year | (2,001,781) | (2,158,298) | (2,689,829) |
Cost of Sales | $ 7,099,923 | $ 8,452,440 | $ 8,483,328 |
SELLING, GENERAL AND ADMINIST_3
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Selling, general and administrative expense [Line Items] | |||
Services and fees | $ 53,220 | $ 79,283 | $ 76,066 |
Labor cost | 192,854 | 215,418 | 241,552 |
Depreciation of property, plant and equipment | 15,920 | 16,034 | 13,561 |
Amortization of intangible assets | 73,224 | 118,339 | 93,842 |
Maintenance and expenses | 4,275 | 4,894 | 5,096 |
Taxes | 97,075 | 104,014 | 95,072 |
Office expenses | 27,314 | 35,956 | 35,663 |
Freight and transportation | 283,808 | 307,958 | 300,676 |
Increase (decrease) of allowance for doubtful accounts | 336 | (293) | 1,629 |
Others | 14,856 | 15,872 | 13,607 |
Selling, general and administrative expenses | 762,882 | 897,475 | 876,764 |
PwC | |||
Selling, general and administrative expense [Line Items] | |||
Auditor's remuneration | 3,289 | 3,804 | 4,704 |
Auditor's remuneration for audit services | 3,132 | 3,485 | 3,937 |
Auditor's remuneration for audit-related services | 41 | 54 | 61 |
Auditor's remuneration for tax services | 95 | 190 | 281 |
Auditor's remuneration for other services | $ 21 | $ 75 | $ 425 |
LABOR COSTS (Included Cost of_3
LABOR COSTS (Included Cost of sales and Selling, General and Administrative expenses) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)employee | Dec. 31, 2019USD ($)employee | Dec. 31, 2018USD ($)employee | |
Labor Costs [Abstract] | |||
Wages, salaries and social security costs | $ 677,541 | $ 759,678 | $ 884,536 |
Termination benefits | 25,265 | 28,269 | 26,601 |
Post-employment benefits (Note 20 (i)) | 36,093 | 39,086 | 29,862 |
Labor costs | $ 738,899 | $ 827,033 | $ 940,999 |
Number of employees | employee | 20,173 | 19,863 | 20,660 |
OTHER OPERATING INCOME (EXPEN_3
OTHER OPERATING INCOME (EXPENSES), NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other operating income (expenses), net [Abstract] | |||
Results of sundry assets | $ 1,363 | $ 258 | $ 1,895 |
Provision for legal claims and other matters | 0 | 1,997 | 7,625 |
Recovery of provision related to the ICMS action of unconstitutionality | 380,075 | 0 | 0 |
Other operating income | 20,093 | 19,408 | 4,136 |
Other operating income | 401,531 | 21,663 | 13,656 |
Reversal of the asset in connection with the ICMS provision | (194,065) | 0 | 0 |
Provision for legal claims and other matters | (623) | 0 | 0 |
Other operating expense | (194,688) | 0 | 0 |
Other operating income (expenses), net | $ 206,843 | $ 21,663 | $ 13,656 |
OTHER OPERATING INCOME (EXPEN_4
OTHER OPERATING INCOME (EXPENSES), NET - Footnote (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other operating income (expenses), net [Abstract] | |||
Recovery of provision related to the ICMS action of unconstitutionality | $ 380,075 | $ 0 | $ 0 |
Reversal of the asset in connection with the ICMS provision | $ 194,065 | $ 0 | $ 0 |
OTHER FINANCIAL INCOME (EXPEN_3
OTHER FINANCIAL INCOME (EXPENSES), NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative instruments, gain (loss) [Line Items] | |||
Interest expense | $ (46,644) | $ (88,284) | $ (131,172) |
Finance expense | (46,644) | (88,284) | (131,172) |
Interest income | 49,421 | 29,071 | 21,236 |
Finance income | 49,421 | 29,071 | 21,236 |
Net foreign exchange gain (loss) | 3,379 | (136,897) | (177,645) |
Inflation adjustment results | 0 | 117,956 | 191,427 |
Change in fair value of financial assets | 6,104 | 0 | 0 |
Others | (1,862) | (9,984) | 15,837 |
Other financial income (expenses), net | 19,554 | (39,756) | (69,640) |
Foreign exchange contract | |||
Derivative instruments, gain (loss) [Line Items] | |||
Derivative contract results | $ 11,933 | $ (10,831) | $ (99,259) |
INCOME TAX EXPENSE (Income tax
INCOME TAX EXPENSE (Income tax expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Major components of tax expense (income) [Line Items] | |||
Current tax | $ (338,408) | $ (256,460) | $ (588,773) |
Effect of changes in tax law | 0 | 4,178 | (28,596) |
Deferred tax | 39,895 | 38,785 | 232,485 |
Effect of changes in tax law | 0 | 16,979 | 0 |
Recovery of income tax | 7,025 | 0 | 15,449 |
Income tax expense | $ (291,488) | $ (196,519) | (369,435) |
Argentina | |||
Major components of tax expense (income) [Line Items] | |||
Effect of changes in tax law | $ (28,600) |
INCOME TAX EXPENSE (Reconciliat
INCOME TAX EXPENSE (Reconciliation of effective income tax) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of income tax [Abstract] | |||
Income before income tax | $ 1,159,359 | $ 826,564 | $ 2,031,567 |
Income tax expense at statutory tax rate | (350,896) | (247,592) | (604,493) |
Non taxable income | 118,540 | 71,101 | 102,870 |
Non deductible expenses | 0 | (476) | (16,201) |
Effect of currency translation on tax base | (66,157) | 33,133 | 161,536 |
Increase of unrecognized tax losses carried-forward | 0 | (73,842) | 0 |
Recovery of income tax | 7,025 | 0 | 15,449 |
Effect of changes in tax law | 0 | 21,157 | (28,596) |
Income tax expense | $ (291,488) | $ (196,519) | $ (369,435) |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | $ 6,539,581 | $ 5,817,609 | |||
Capitalized borrowing costs | $ 13,100 | $ 16,100 | $ 7,400 | ||
Property, plant and equipment, ending balance | 6,504,681 | 6,539,581 | 5,817,609 | 6,504,681 | 6,539,581 |
Right-of-use assets | |||||
Right-of-use assets, beginning balance | 306,458 | 49,370 | |||
Effect of initial recognition under IFRS 16 | 280,493 | ||||
Translation differences | 0 | (1,263) | |||
Additions | 6,101 | 40,864 | |||
Capitalized borrowing costs | 0 | 0 | |||
Disposals / Consumptions | (3,254) | (18,901) | |||
Indexation | (9,388) | ||||
Increase (decrease) through transfers from construction in progress, Right-of-Use Assets | 0 | 0 | |||
Depreciation charge | (43,547) | (44,105) | |||
Right-of-use assets, ending balance | 256,370 | 306,458 | 49,370 | 256,370 | 306,458 |
Translation differences | (542) | (31,113) | |||
Additions | 531,453 | 1,026,721 | |||
Capitalized borrowing costs | 13,100 | 16,085 | |||
Disposals / Consumptions | (22,224) | (45,449) | |||
Indexation | (9,388) | ||||
Transfers | (4,096) | 203 | |||
Depreciation charge | (543,203) | (524,968) | |||
Cost | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 12,823,011 | 11,701,232 | |||
Property, plant and equipment, ending balance | 13,325,670 | 12,823,011 | 11,701,232 | 13,325,670 | 12,823,011 |
Right-of-use assets | |||||
Right-of-use assets, beginning balance | 355,928 | 55,288 | |||
Right-of-use assets, ending balance | 349,003 | 355,928 | 55,288 | 349,003 | 355,928 |
Accumulated depreciation | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | (6,283,430) | (5,883,623) | |||
Property, plant and equipment, ending balance | (6,820,989) | (6,283,430) | (5,883,623) | (6,820,989) | (6,283,430) |
Right-of-use assets | |||||
Right-of-use assets, beginning balance | (49,470) | (5,918) | |||
Right-of-use assets, ending balance | (92,633) | (49,470) | (5,918) | (92,633) | (49,470) |
Land | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 594,435 | 587,174 | |||
Effect of initial recognition under IFRS 16 | 0 | ||||
Translation differences | (134) | (596) | |||
Additions | 0 | 7,531 | |||
Capitalized borrowing costs | 0 | 0 | |||
Disposals / Consumptions | 0 | 0 | |||
Indexation | 0 | ||||
Transfers | (1,540) | 326 | |||
Depreciation charge | 0 | 0 | |||
Property, plant and equipment, ending balance | 592,761 | 594,435 | 587,174 | 592,761 | 594,435 |
Land | Cost | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 594,435 | 587,174 | |||
Property, plant and equipment, ending balance | 592,761 | 594,435 | 587,174 | 592,761 | 594,435 |
Land | Accumulated depreciation | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 0 | 0 | |||
Property, plant and equipment, ending balance | 0 | 0 | 0 | 0 | 0 |
Buildings and improvements | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 1,794,022 | 1,782,198 | |||
Effect of initial recognition under IFRS 16 | 0 | ||||
Translation differences | (297) | (16,174) | |||
Additions | 18,552 | 9,367 | |||
Capitalized borrowing costs | 0 | 0 | |||
Disposals / Consumptions | (183) | (750) | |||
Indexation | 0 | ||||
Transfers | 137,379 | 154,544 | |||
Depreciation charge | (136,217) | (135,163) | |||
Property, plant and equipment, ending balance | 1,813,256 | 1,794,022 | 1,782,198 | 1,813,256 | 1,794,022 |
Buildings and improvements | Cost | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 3,412,904 | 3,303,174 | |||
Property, plant and equipment, ending balance | 3,567,732 | 3,412,904 | 3,303,174 | 3,567,732 | 3,412,904 |
Buildings and improvements | Accumulated depreciation | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | (1,618,882) | (1,520,976) | |||
Property, plant and equipment, ending balance | (1,754,476) | (1,618,882) | (1,520,976) | (1,754,476) | (1,618,882) |
Production equipment | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 2,554,581 | 2,622,584 | |||
Effect of initial recognition under IFRS 16 | 0 | ||||
Translation differences | (68) | (9,959) | |||
Additions | 1,487 | 2,063 | |||
Capitalized borrowing costs | 0 | 0 | |||
Disposals / Consumptions | (124) | (117) | |||
Indexation | 0 | ||||
Transfers | 247,824 | 264,122 | |||
Depreciation charge | (339,050) | (324,112) | |||
Property, plant and equipment, ending balance | 2,464,650 | 2,554,581 | 2,622,584 | 2,464,650 | 2,554,581 |
Production equipment | Cost | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 6,931,970 | 6,748,644 | |||
Property, plant and equipment, ending balance | 7,179,626 | 6,931,970 | 6,748,644 | 7,179,626 | 6,931,970 |
Production equipment | Accumulated depreciation | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | (4,377,389) | (4,126,060) | |||
Property, plant and equipment, ending balance | (4,714,976) | (4,377,389) | (4,126,060) | (4,714,976) | (4,377,389) |
Vehicles, furniture and fixtures and other equipment | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 50,365 | 47,388 | |||
Effect of initial recognition under IFRS 16 | 0 | ||||
Translation differences | (37) | (316) | |||
Additions | 2,345 | 4,821 | |||
Capitalized borrowing costs | 0 | 0 | |||
Disposals / Consumptions | (1,106) | (1,204) | |||
Indexation | 0 | ||||
Transfers | 23,352 | 14,843 | |||
Depreciation charge | (16,761) | (15,167) | |||
Property, plant and equipment, ending balance | 58,158 | 50,365 | 47,388 | 58,158 | 50,365 |
Vehicles, furniture and fixtures and other equipment | Cost | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 268,398 | 264,782 | |||
Property, plant and equipment, ending balance | 289,877 | 268,398 | 264,782 | 289,877 | 268,398 |
Vehicles, furniture and fixtures and other equipment | Accumulated depreciation | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | (218,033) | (217,394) | |||
Property, plant and equipment, ending balance | (231,719) | (218,033) | (217,394) | (231,719) | (218,033) |
Work in progress | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 1,119,348 | 617,950 | |||
Effect of initial recognition under IFRS 16 | 0 | ||||
Translation differences | (6) | (1,716) | |||
Additions | 482,606 | 923,599 | |||
Capitalized borrowing costs | 13,100 | 16,085 | |||
Disposals / Consumptions | (3,775) | (2,988) | |||
Indexation | 0 | ||||
Transfers | (407,911) | (433,582) | |||
Depreciation charge | 0 | 0 | |||
Property, plant and equipment, ending balance | 1,203,362 | 1,119,348 | 617,950 | 1,203,362 | 1,119,348 |
Work in progress | Cost | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 1,119,348 | 617,950 | |||
Property, plant and equipment, ending balance | 1,203,362 | 1,119,348 | 617,950 | 1,203,362 | 1,119,348 |
Work in progress | Accumulated depreciation | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 0 | 0 | |||
Property, plant and equipment, ending balance | 0 | 0 | 0 | 0 | 0 |
Spare parts | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 120,372 | 110,945 | |||
Effect of initial recognition under IFRS 16 | 0 | ||||
Translation differences | 0 | (1,089) | |||
Additions | 20,362 | 38,476 | |||
Capitalized borrowing costs | 0 | 0 | |||
Disposals / Consumptions | (13,782) | (21,489) | |||
Indexation | 0 | ||||
Transfers | (3,200) | (50) | |||
Depreciation charge | (7,628) | (6,421) | |||
Property, plant and equipment, ending balance | 116,124 | 120,372 | 110,945 | 116,124 | 120,372 |
Spare parts | Cost | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | 140,028 | 124,220 | |||
Property, plant and equipment, ending balance | 143,309 | 140,028 | 124,220 | 143,309 | 140,028 |
Spare parts | Accumulated depreciation | |||||
Property, plant and equipment | |||||
Property, plant and equipment, beginning balance | (19,656) | (13,275) | |||
Property, plant and equipment, ending balance | $ (27,185) | $ (19,656) | $ (13,275) | $ (27,185) | $ (19,656) |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET - Schedule of Right-of-Use Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | $ 306,458 | $ 49,370 |
Net additions | 6,101 | 40,864 |
Effect of initial recognition under IFRS 16 | 280,493 | |
Translation differences | 0 | (1,263) |
Disposal/Derecognition | (3,254) | (18,901) |
Indexation | (9,388) | |
Depreciation charge | (43,547) | (44,105) |
Right-of-use assets, ending balance | 256,370 | 306,458 |
Cost | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | 355,928 | 55,288 |
Right-of-use assets, ending balance | 349,003 | 355,928 |
Accumulated depreciation | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | (49,470) | (5,918) |
Right-of-use assets, ending balance | (92,633) | (49,470) |
Buildings and improvements | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | 216,857 | 0 |
Net additions | 2,416 | 18,931 |
Effect of initial recognition under IFRS 16 | 226,936 | |
Translation differences | (115) | |
Disposal/Derecognition | (1,666) | 0 |
Indexation | (7,024) | |
Depreciation charge | (29,424) | (28,895) |
Right-of-use assets, ending balance | 181,159 | 216,857 |
Buildings and improvements | Cost | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | 245,752 | 0 |
Right-of-use assets, ending balance | 239,211 | 245,752 |
Buildings and improvements | Accumulated depreciation | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | (28,895) | 0 |
Right-of-use assets, ending balance | (58,052) | (28,895) |
Production equipment | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | 89,601 | 49,370 |
Net additions | 3,685 | 21,933 |
Effect of initial recognition under IFRS 16 | 52,469 | |
Translation differences | (1,148) | |
Disposal/Derecognition | (1,588) | (18,094) |
Indexation | (2,364) | |
Depreciation charge | (14,123) | (14,929) |
Right-of-use assets, ending balance | 75,211 | 89,601 |
Production equipment | Cost | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | 110,176 | 55,288 |
Right-of-use assets, ending balance | 109,792 | 110,176 |
Production equipment | Accumulated depreciation | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | (20,575) | (5,918) |
Right-of-use assets, ending balance | (34,581) | (20,575) |
Vehicles, furniture and fixtures and other equipment | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | 0 | 0 |
Net additions | 0 | 0 |
Effect of initial recognition under IFRS 16 | 1,088 | |
Translation differences | 0 | |
Disposal/Derecognition | 0 | (807) |
Indexation | 0 | |
Depreciation charge | 0 | (281) |
Right-of-use assets, ending balance | 0 | 0 |
Vehicles, furniture and fixtures and other equipment | Cost | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | 0 | 0 |
Right-of-use assets, ending balance | 0 | 0 |
Vehicles, furniture and fixtures and other equipment | Accumulated depreciation | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Right-of-use assets, beginning balance | 0 | 0 |
Right-of-use assets, ending balance | $ 0 | $ 0 |
PROPERTY, PLANT AND EQUIPMENT_5
PROPERTY, PLANT AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of detailed information about property, plant and equipment [abstract] | ||
Expense relating to variable lease payments not included in measurement of lease liabilities | $ 10.6 | $ 17.4 |
Expense relating to short-term leases for which recognition exemption has been used | $ 0.8 | $ 3.4 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | $ 943,838 | $ 1,012,524 |
Translation differences | (463) | |
Additions | 51,577 | 68,657 |
Transfers | 1,016 | (736) |
Depreciation charge | (87,848) | (136,144) |
Intangible assets and goodwill, ending balance | 908,583 | 943,838 |
Cost | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 1,960,286 | 1,901,185 |
Intangible assets and goodwill, ending balance | 2,012,772 | 1,960,286 |
Accumulated depreciation | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | (1,016,448) | (888,661) |
Intangible assets and goodwill, ending balance | (1,104,189) | (1,016,448) |
Information system projects | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 74,381 | 71,761 |
Translation differences | (463) | |
Additions | 25,698 | 31,812 |
Transfers | 1,021 | (738) |
Depreciation charge | (25,259) | (27,991) |
Intangible assets and goodwill, ending balance | 75,841 | 74,381 |
Information system projects | Cost | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 342,857 | 320,600 |
Intangible assets and goodwill, ending balance | 369,468 | 342,857 |
Information system projects | Accumulated depreciation | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | (268,476) | (248,839) |
Intangible assets and goodwill, ending balance | (293,627) | (268,476) |
Mining assets | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 104,517 | 76,288 |
Translation differences | 0 | |
Additions | 2,034 | 12,580 |
Transfers | 17,141 | 27,954 |
Depreciation charge | (11,078) | (12,305) |
Intangible assets and goodwill, ending balance | 112,614 | 104,517 |
Mining assets | Cost | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 256,736 | 216,203 |
Intangible assets and goodwill, ending balance | 275,912 | 256,736 |
Mining assets | Accumulated depreciation | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | (152,219) | (139,915) |
Intangible assets and goodwill, ending balance | (163,298) | (152,219) |
Exploration and evaluation costs | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 19,522 | 23,209 |
Translation differences | 0 | |
Additions | 23,845 | 24,265 |
Transfers | (17,146) | (27,952) |
Depreciation charge | 0 | 0 |
Intangible assets and goodwill, ending balance | 26,221 | 19,522 |
Exploration and evaluation costs | Cost | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 19,522 | 23,209 |
Intangible assets and goodwill, ending balance | 26,221 | 19,522 |
Exploration and evaluation costs | Accumulated depreciation | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 0 | 0 |
Intangible assets and goodwill, ending balance | 0 | 0 |
Customer relationships and other contractual rights | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 83,111 | 178,959 |
Translation differences | 0 | |
Additions | 0 | 0 |
Transfers | 0 | 0 |
Depreciation charge | (51,511) | (95,848) |
Intangible assets and goodwill, ending balance | 31,600 | 83,111 |
Customer relationships and other contractual rights | Cost | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 604,929 | 604,931 |
Intangible assets and goodwill, ending balance | 604,929 | 604,929 |
Customer relationships and other contractual rights | Accumulated depreciation | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | (521,818) | (425,972) |
Intangible assets and goodwill, ending balance | (573,329) | (521,818) |
Trademarks | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 0 | 0 |
Translation differences | 0 | |
Additions | 0 | 0 |
Transfers | 0 | 0 |
Depreciation charge | 0 | 0 |
Intangible assets and goodwill, ending balance | 0 | 0 |
Trademarks | Cost | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 73,935 | 73,935 |
Intangible assets and goodwill, ending balance | 73,935 | 73,935 |
Trademarks | Accumulated depreciation | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | (73,935) | (73,935) |
Intangible assets and goodwill, ending balance | (73,935) | (73,935) |
Goodwill | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 662,307 | 662,307 |
Translation differences | 0 | |
Additions | 0 | 0 |
Transfers | 0 | 0 |
Depreciation charge | 0 | 0 |
Intangible assets and goodwill, ending balance | 662,307 | 662,307 |
Goodwill | Cost | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 662,307 | 662,307 |
Intangible assets and goodwill, ending balance | 662,307 | 662,307 |
Goodwill | Accumulated depreciation | ||
Disclosure of detailed information about intangible assets [line items] | ||
Intangible assets and goodwill, beginning balance | 0 | 0 |
Intangible assets and goodwill, ending balance | $ 0 | $ 0 |
INVESTMENTS IN NON-CONSOLIDAT_3
INVESTMENTS IN NON-CONSOLIDATED COMPANIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of interests in other entities [Abstract] | ||
Investments in non-consolidated companies, beginning balance | $ 513,648 | $ 495,241 |
Equity in earnings of non-consolidated companies | 57,555 | 60,967 |
Other comprehensive income | (93,598) | (39,449) |
Dividends from non-consolidated companies | (6,299) | (3,111) |
Investments in non-consolidated companies, ending balance | $ 471,306 | $ 513,648 |
INVESTMENTS IN NON-CONSOLIDAT_4
INVESTMENTS IN NON-CONSOLIDATED COMPANIES (Schedule of principal in non-consolidated companies) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of unconsolidated structured entities [line items] | |||
Investments in non-consolidated companies | $ 471,306 | $ 513,648 | $ 495,241 |
USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | |||
Disclosure of unconsolidated structured entities [line items] | |||
Proportion of voting rights held by non-consolidated companies | 20.41% | ||
Investments in non-consolidated companies | $ 422,948 | 486,643 | $ 480,084 |
Other non-consolidated companies | |||
Disclosure of unconsolidated structured entities [line items] | |||
Investments in non-consolidated companies | $ 5,733 | $ 5,432 | |
Brazil | USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | |||
Disclosure of unconsolidated structured entities [line items] | |||
Proportion of voting rights held by non-consolidated companies | 34.39% | 34.39% | |
Investments in non-consolidated companies | $ 422,948 | $ 486,643 | |
Mexico | Techgen S.A. de C.V. | |||
Disclosure of unconsolidated structured entities [line items] | |||
Proportion of voting rights held by non-consolidated companies | 48.00% | 48.00% | |
Investments in non-consolidated companies | $ 42,625 | $ 21,573 |
INVESTMENTS IN NON-CONSOLIDAT_5
INVESTMENTS IN NON-CONSOLIDATED COMPANIES (Narrative) (Details) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | |||||
Dec. 31, 2020USD ($)$ / sharesMWshares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | Dec. 31, 2020R$ / shares | Dec. 31, 2019R$ / shares | Dec. 31, 2017USD ($) | |
Disclosure of unconsolidated structured entities [line items] | ||||||
Fair value of investments in associates for which there are quoted market prices | $ 756,300 | $ 614,100 | ||||
Investments in associates | 422,900 | 486,600 | ||||
Revenue | 8,735,435 | 10,192,818 | $ 11,454,807 | |||
Net sales | 8,735,435 | 10,192,818 | 11,454,807 | |||
Non-current assets | 8,289,460 | 8,757,320 | ||||
Current assets | 4,566,775 | 4,178,213 | ||||
Non-current liabilities | 2,559,485 | 3,452,535 | ||||
Current liabilities | 1,853,597 | 1,768,125 | ||||
Equity | 8,443,153 | 7,714,873 | $ 7,484,576 | $ 5,852,771 | ||
USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Revenue | 3,133,000 | 3,790,000 | ||||
Net sales | 3,133,000 | 3,790,000 | ||||
Equity | $ 2,860,944 | 3,484,000 | ||||
USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | Ternium Investments S.a r.l., Ternium Argentina and Prosid Investments S.A.I.C. | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Percentage of voting equity interests acquired | 20.40% | |||||
Usiminas Control Group | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Percentage of voting equity interests acquired | 68.60% | |||||
Usiminas Control Group | T/T Group | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Percentage of voting equity interests acquired | 47.10% | |||||
Usiminas Control Group | Ternium S.A. | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Percentage of voting equity interests acquired | 39.50% | |||||
Usiminas Control Group | TenarisConfab | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Percentage of voting equity interests acquired | 7.60% | |||||
Usiminas Control Group | NSC Group | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Percentage of voting equity interests acquired | 45.90% | |||||
Usiminas Control Group | Previdencia Usiminas | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Percentage of voting equity interests acquired | 7.00% | |||||
Techgen S.A. de C.V. | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Revenue | $ 314,000 | 344,000 | ||||
Number of megawatts (MW) | MW | 900 | |||||
Net sales | $ 314,000 | 344,000 | ||||
Profit (loss) from continuing operations | 44,000 | 24,000 | ||||
Non-current assets | 833,000 | 875,000 | ||||
Current assets | 59,000 | 48,000 | ||||
Non-current liabilities | 709,000 | 791,000 | ||||
Current liabilities | 95,000 | 87,000 | ||||
Equity | 89,000 | $ 45,000 | ||||
Subordinated liabilities | $ 127,400 | |||||
Techgen S.A. de C.V. | Ternium S.A. | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Proportion of ownership interest in associate (percent) | 48.00% | |||||
Proportion of ownership interest in associate's power supply (percent) | 78.00% | |||||
Techgen S.A. de C.V. | Tecpetrol International S.A. | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Proportion of ownership interest in associate (percent) | 30.00% | |||||
Techgen S.A. de C.V. | Ternium Investments S.a.r.l. | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Proportion of ownership interest in associate (percent) | 22.00% | |||||
Proportion of ownership interest in associate's power supply (percent) | 22.00% | |||||
Ordinary shares | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Share price (per share) | (per share) | $ 3.02 | $ 2.45 | R$ 15.69 | R$ 9.87 | ||
Ordinary shares | USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | Ternium Investments S.a r.l., Ternium Argentina and Prosid Investments S.A.I.C. | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Number of shares outstanding (shares) | shares | 242.6 | |||||
Ordinary shares | Usiminas Control Group | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Number of shares outstanding (shares) | shares | 483.6 | |||||
Preferred shares | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Share price (per share) | (per share) | $ 2.81 | $ 2.36 | R$ 14.61 | R$ 9.51 | ||
Preferred shares | USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | Ternium Investments S.a r.l., Ternium Argentina and Prosid Investments S.A.I.C. | ||||||
Disclosure of unconsolidated structured entities [line items] | ||||||
Number of shares outstanding (shares) | shares | 8.5 |
INVESTMENTS IN NON-CONSOLIDAT_6
INVESTMENTS IN NON-CONSOLIDATED COMPANIES (Value of investment in Usinas) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of unconsolidated structured entities [line items] | |||
Investments in non-consolidated companies, beginning balance | $ 513,648 | $ 495,241 | |
Share of results | 57,555 | 60,967 | |
Other comprehensive income | (93,598) | (39,449) | |
Dividends | (6,299) | (3,111) | $ (8,837) |
Investments in non-consolidated companies, ending balance | 471,306 | 513,648 | 495,241 |
USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | |||
Disclosure of unconsolidated structured entities [line items] | |||
Investments in non-consolidated companies, beginning balance | 486,643 | 480,084 | |
Share of results | 35,580 | 48,502 | |
Other comprehensive income | (93,237) | (38,896) | |
Dividends | (6,038) | (3,047) | |
Investments in non-consolidated companies, ending balance | $ 422,948 | $ 486,643 | $ 480,084 |
INVESTMENTS IN NON-CONSOLIDAT_7
INVESTMENTS IN NON-CONSOLIDATED COMPANIES (Investment in Usinas) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of unconsolidated structured entities [line items] | ||||
Equity | $ 8,443,153 | $ 7,714,873 | $ 7,484,576 | $ 5,852,771 |
Investments in non-consolidated companies | 471,306 | 513,648 | 495,241 | |
USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | ||||
Disclosure of unconsolidated structured entities [line items] | ||||
Equity | $ 2,860,944 | 3,484,000 | ||
Proportion of ownership interest in associate | 20.41% | |||
Investments in non-consolidated companies | $ 422,948 | $ 486,643 | $ 480,084 | |
Purchase price allocation | 46,664 | |||
Goodwill | 200,018 | |||
Impairment | (407,533) | |||
USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | Ternium S.A. | ||||
Disclosure of unconsolidated structured entities [line items] | ||||
Investments in non-consolidated companies | $ 583,799 |
INVESTMENTS IN NON-CONSOLIDAT_8
INVESTMENTS IN NON-CONSOLIDATED COMPANIES (Summarized balance sheet information) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Assets | |||||||
Other current investments | $ 813,527 | $ 212,271 | |||||
Cash and cash equivalents | 537,882 | [1] | 519,965 | [1] | $ 250,541 | [1] | $ 337,779 |
Total Assets | 12,856,235 | 12,935,533 | |||||
Liabilities | |||||||
Non-current | 551,856 | 507,603 | |||||
Non-current borrowings | 1,327,289 | 1,628,892 | |||||
Current | 249,836 | 240,934 | |||||
Current borrowings | 395,604 | 559,782 | |||||
Total Liabilities | 4,413,082 | 5,220,660 | |||||
Non-controlling interest | 1,157,038 | 1,103,208 | |||||
Total Equity | 8,443,153 | 7,714,873 | $ 7,484,576 | $ 5,852,771 | |||
USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | |||||||
Assets | |||||||
Non-current | 3,487,000 | 4,336,000 | |||||
Current | 1,339,000 | 1,721,000 | |||||
Other current investments | 276,000 | 166,000 | |||||
Cash and cash equivalents | 661,000 | 311,000 | |||||
Total Assets | 5,763,000 | 6,534,000 | |||||
Liabilities | |||||||
Non-current | 540,000 | 718,000 | |||||
Non-current borrowings | 1,122,000 | 1,237,000 | |||||
Current | 836,000 | 687,000 | |||||
Current borrowings | 26,000 | 30,000 | |||||
Total Liabilities | 2,524,000 | 2,672,000 | |||||
Non-controlling interest | 378,000 | 378,000 | |||||
Total Equity | $ 2,860,944 | $ 3,484,000 | |||||
[1] | It includes restricted cash of $54, $69 and $2,216 as of December 31, 2020, 2019 and 2018, respectively. In addition, the Company had other investments with a maturity of more than three months for $813,527, $212,271 and $44,529 as of December 31, 2020, 2019 and 2018, respectively. |
INVESTMENTS IN NON-CONSOLIDAT_9
INVESTMENTS IN NON-CONSOLIDATED COMPANIES (Summarized income statement information) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of unconsolidated structured entities [line items] | |||
Net sales | $ 8,735,435 | $ 10,192,818 | $ 11,454,807 |
Cost of sales | (7,099,923) | (8,452,440) | (8,483,328) |
Gross profit | 1,635,512 | 1,740,378 | 2,971,479 |
Selling, general and administrative expenses | (762,882) | (897,475) | (876,764) |
Other operating income (expenses), net | 206,843 | 21,663 | 13,656 |
Profit (loss) from operating activities | 1,079,473 | 864,566 | 2,108,371 |
Profit before income tax expense | 1,159,359 | 826,564 | 2,031,567 |
Income tax expense | (291,488) | (196,519) | (369,435) |
Net profit (loss) before non-controlling interest | 867,871 | 630,045 | 1,662,132 |
Non-controlling interest in other subsidiaries | (89,403) | (65,776) | (155,485) |
Net profit (loss) for the year | 778,468 | 564,269 | $ 1,506,647 |
USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | |||
Disclosure of unconsolidated structured entities [line items] | |||
Net sales | 3,133,000 | 3,790,000 | |
Cost of sales | (2,509,000) | (3,312,000) | |
Gross profit | 624,000 | 478,000 | |
Selling, general and administrative expenses | (161,000) | (181,000) | |
Other operating income (expenses), net | 61,000 | (100,000) | |
Profit (loss) from operating activities | 524,000 | 197,000 | |
Financial expenses, net | (234,000) | (132,000) | |
Equity in earnings of associated companies | 30,000 | 46,000 | |
Profit before income tax expense | 320,000 | 111,000 | |
Income tax expense | (97,000) | (16,000) | |
Net profit (loss) before non-controlling interest | 223,000 | 95,000 | |
Non-controlling interest in other subsidiaries | (117,000) | (41,000) | |
Net profit (loss) for the year | $ 106,000 | $ 54,000 |
RECEIVABLES, NET - NON CURREN_3
RECEIVABLES, NET - NON CURRENT AND CURRENT (Non-current Receivables) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables, net [Abstract] | ||
Receivables with related parties (Notes 25 and 13 (b)) | $ 126,908 | $ 126,948 |
Employee advances and loans | 2,326 | 1,572 |
Advances to suppliers for the purchase of property, plant and equipment | 14,078 | 50,079 |
Advances to suppliers for the purchase of property, plant and equipment with related parties (Note 25) | 2,452 | 7,827 |
Other receivables | 0 | 254,446 |
Other tax credits | 97,202 | 150,721 |
Others | 340 | 972 |
Receivables, net – Non-current | $ 243,306 | $ 592,565 |
RECEIVABLES, NET - NON CURREN_4
RECEIVABLES, NET - NON CURRENT AND CURRENT (Current receivables) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables, net [Abstract] | ||
Value added tax | $ 188,027 | $ 162,121 |
Income tax credits | 8,205 | 60,402 |
Other tax credits | 29,834 | 38,913 |
Employee advances and loans | 4,355 | 3,667 |
Advances to suppliers | 12,009 | 10,134 |
Advances to suppliers with related parties (Note 25) | 11,927 | 16,126 |
Expenses paid in advance | 8,160 | 9,781 |
Government tax refunds on exports | 6,499 | 14,805 |
Receivables with related parties (Note 25) | 7,446 | 3,696 |
Others | 12,147 | 15,068 |
Current receivables, net | $ 288,609 | $ 334,713 |
TRADE RECEIVABLES, NET - NON _3
TRADE RECEIVABLES, NET - NON CURRENT AND CURRENT (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Trade and other receivables [abstract] | ||
Trade receivables, net – Non-current | $ 0 | $ 897 |
Current accounts | 832,544 | 920,937 |
Trade receivables with related parties | 96,394 | 41,696 |
Allowance for doubtful accounts | (10,500) | (12,961) |
Trade receivables, net - Current | $ 918,438 | $ 949,672 |
TRADE RECEIVABLES, NET - NON _4
TRADE RECEIVABLES, NET - NON CURRENT AND CURRENT (Schedule of trade receivables, net) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | $ 2,427,576 | $ 2,093,373 |
Trade receivables | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 918,438 | 950,569 |
Trade receivables | Fully performing | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 892,298 | 877,236 |
Trade receivables | Past due | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 26,140 | 73,333 |
Gross carrying amount | Guaranteed | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 387,718 | 469,087 |
Gross carrying amount | Guaranteed | Fully performing | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 373,384 | 424,052 |
Gross carrying amount | Guaranteed | Past due | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 14,334 | 45,035 |
Gross carrying amount | Not guaranteed | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 541,220 | 494,443 |
Gross carrying amount | Not guaranteed | Fully performing | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 518,914 | 453,184 |
Gross carrying amount | Not guaranteed | Past due | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 22,306 | 41,259 |
Gross carrying amount | Trade receivables | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 928,938 | 963,530 |
Gross carrying amount | Trade receivables | Fully performing | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 892,298 | 877,236 |
Gross carrying amount | Trade receivables | Past due | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 36,640 | 86,294 |
Accumulated impairment | Trade receivables | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | (10,500) | (12,961) |
Accumulated impairment | Trade receivables | Fully performing | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | 0 | 0 |
Accumulated impairment | Trade receivables | Past due | ||
Disclosure of trade receivables [Line Items] | ||
Trade receivables, net | $ (10,500) | $ (12,961) |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Subclassifications of assets, liabilities and equities [abstract] | ||||
Raw materials, materials and spare parts | $ 606,429 | $ 731,901 | ||
Goods in process | 838,403 | 975,553 | ||
Finished goods | 313,257 | 396,401 | ||
Goods in transit | 302,302 | 116,610 | ||
Obsolescence allowance (Note 18) | (58,610) | (62,167) | ||
Inventories, net | $ 2,001,781 | $ 2,158,298 | $ 2,689,829 | $ 2,550,930 |
CASH, CASH EQUIVALENTS AND OT_3
CASH, CASH EQUIVALENTS AND OTHER INVESTMENTS - NON CURRENT AND CURRENT (Other investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Cash, cash equivalents and other investments [Abstract] | ||
Investments in debt instruments and other | $ 2,629 | $ 3,001 |
Investments in debt instruments and other | 252 | 252 |
Other investments, net – Non-current | $ 2,881 | $ 3,253 |
CASH, CASH EQUIVALENTS AND OT_4
CASH, CASH EQUIVALENTS AND OTHER INVESTMENTS - NON CURRENT AND CURRENT (Cash and cash equivalents) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Other investments [Abstract] | |||||||
Other deposits with maturity of more than three months | $ 813,527 | $ 212,271 | |||||
Other investments - Current | 813,527 | 212,271 | |||||
Cash and cash equivalents [abstract] | |||||||
Cash and banks | 129,500 | 115,575 | |||||
Restricted cash | 54 | 69 | $ 2,216 | ||||
Short-term bank deposits | 259,020 | 199,877 | |||||
Other deposits with maturity of less than three months | 149,308 | 204,444 | |||||
Cash and cash equivalents | $ 537,882 | [1] | $ 519,965 | [1] | $ 250,541 | [1] | $ 337,779 |
[1] | It includes restricted cash of $54, $69 and $2,216 as of December 31, 2020, 2019 and 2018, respectively. In addition, the Company had other investments with a maturity of more than three months for $813,527, $212,271 and $44,529 as of December 31, 2020, 2019 and 2018, respectively. |
ALLOWANCES AND PROVISIONS - N_3
ALLOWANCES AND PROVISIONS - NON CURRENT AND CURRENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Non-current provisions [abstract] | ||
Non-current provisions, beginning of the year | $ 613,352 | |
Non-current provisions, end of the year | 80,570 | $ 613,352 |
Current provisions [abstract] | ||
Uses | (6,898) | |
Legal claims and other matters | ||
Non-current provisions [abstract] | ||
Non-current provisions, beginning of the year | 613,352 | 643,950 |
Translation differences | (151,466) | (25,701) |
Additions | 3,760 | 2,689 |
Reversals | (384,933) | (4,417) |
Uses | (143) | (3,169) |
Non-current provisions, end of the year | 80,570 | 613,352 |
Asset retirement obligation | ||
Non-current provisions [abstract] | ||
Non-current provisions, beginning of the year | 26,556 | 24,554 |
Translation differences | (1,049) | 1,077 |
Additions | 16,166 | 925 |
Reversals | 0 | 0 |
Uses | 0 | 0 |
Non-current provisions, end of the year | 41,673 | 26,556 |
Current provisions [abstract] | ||
Current provisions, beginning of the year | 8,502 | 9,851 |
Translation differences | (1,241) | 348 |
Additions | 3,633 | 5,201 |
Reversals | 0 | 0 |
Uses | (6,379) | |
Current provisions, end of the year | 4,515 | 8,502 |
Allowance for doubtful accounts | ||
Current provisions [abstract] | ||
Current provisions, beginning of the year | 12,961 | 14,346 |
Translation differences | (1,789) | (285) |
Additions | 1,437 | 787 |
Reversals | (1,101) | (1,080) |
Uses | (1,008) | (807) |
Current provisions, end of the year | 10,500 | 12,961 |
Obsolescence allowance | ||
Current provisions [abstract] | ||
Current provisions, beginning of the year | 62,167 | 55,454 |
Translation differences | 0 | (458) |
Additions | 11,009 | 18,036 |
Reversals | (12,288) | (9,623) |
Uses | (2,278) | (1,242) |
Current provisions, end of the year | $ 58,610 | $ 62,167 |
DEFERRED INCOME TAX (Changes in
DEFERRED INCOME TAX (Changes in deferred income tax) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred income tax [Abstract] | |||
At the beginning of the year | $ (239,740) | $ (340,207) | |
Translation differences | (36) | 25,166 | |
Effect of changes in tax law (note 10) | 0 | 16,979 | $ 0 |
Credits directly to other comprehensive income | 12,100 | 19,537 | |
Deferred tax credit (note 10) | 39,894 | 38,785 | |
At the end of the year | $ (187,782) | $ (239,740) | $ (340,207) |
DEFERRED INCOME TAX (Changes _2
DEFERRED INCOME TAX (Changes in deferred tax assets and liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax liability, beginning balance | $ (403,278) | ||
Deferred tax assets, beginning balance | 163,538 | ||
Translation differences | (36) | $ 25,166 | |
Deferred tax (charge) credit | 39,894 | 38,785 | |
Credits directly to other comprehensive income | 12,100 | 19,537 | |
Deferred tax expense (income) relating to tax rate changes or imposition of new taxes | 0 | (16,979) | $ 0 |
Deferred tax liability, ending balance | (346,485) | (403,278) | |
Deferred tax assets, ending balance | 158,703 | 163,538 | |
Deferred tax assets recognized on unused tax losses | 31,084 | 42,766 | |
Unused tax credits for which no deferred tax asset recognised | 200,000 | 400,000 | |
Unused tax losses for which no deferred tax asset recognised | 1,000,000 | 1,400,000 | |
PP&E | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax liability, beginning balance | (437,376) | (522,455) | |
Translation differences | 46 | 27,077 | |
Deferred tax (charge) credit | 11,190 | 58,002 | |
Deferred tax liability, ending balance | (426,140) | (437,376) | (522,455) |
Inventories | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax liability, beginning balance | (63,460) | (41,316) | |
Translation differences | 0 | 2,604 | |
Deferred tax (charge) credit | 33,273 | (24,748) | |
Deferred tax liability, ending balance | (30,187) | (63,460) | (41,316) |
Intangible assets | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax liability, beginning balance | (17,109) | (15,926) | |
Translation differences | 0 | 316 | |
Deferred tax (charge) credit | (3,601) | (1,499) | |
Deferred tax liability, ending balance | (20,710) | (17,109) | (15,926) |
Other | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax liability, beginning balance | (1,189) | (1,088) | |
Translation differences | 0 | 0 | |
Deferred tax (charge) credit | (832) | (101) | |
Deferred tax liability, ending balance | (2,021) | (1,189) | (1,088) |
Deferred tax liabilities | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax liability, beginning balance | (519,134) | (580,785) | |
Translation differences | 46 | 29,997 | |
Deferred tax (charge) credit | 40,030 | 31,654 | |
Deferred tax liability, ending balance | (479,058) | (519,134) | (580,785) |
Provisions | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax assets, beginning balance | 45,654 | 72,947 | |
Translation differences | 0 | (572) | |
Deferred tax (charge) credit | 6,688 | (26,721) | |
Credits directly to other comprehensive income | 0 | 0 | |
Deferred tax expense (income) relating to tax rate changes or imposition of new taxes | 0 | ||
Deferred tax assets, ending balance | 52,342 | 45,654 | 72,947 |
Trade receivables | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax assets, beginning balance | 10,200 | 11,265 | |
Translation differences | 0 | (539) | |
Deferred tax (charge) credit | (1,014) | (526) | |
Credits directly to other comprehensive income | 0 | 0 | |
Deferred tax expense (income) relating to tax rate changes or imposition of new taxes | 0 | ||
Deferred tax assets, ending balance | 9,186 | 10,200 | 11,265 |
Tax losses | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax assets, beginning balance | 42,766 | 33,382 | |
Translation differences | 0 | 0 | |
Deferred tax (charge) credit | (11,682) | 9,384 | |
Credits directly to other comprehensive income | 0 | 0 | |
Deferred tax expense (income) relating to tax rate changes or imposition of new taxes | 0 | ||
Deferred tax assets, ending balance | 31,084 | 42,766 | 33,382 |
Other | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax assets, beginning balance | 180,774 | 122,984 | |
Translation differences | (82) | (3,720) | |
Deferred tax (charge) credit | 5,873 | 24,994 | |
Credits directly to other comprehensive income | 12,100 | 19,537 | |
Deferred tax expense (income) relating to tax rate changes or imposition of new taxes | 16,979 | ||
Deferred tax assets, ending balance | 198,665 | 180,774 | 122,984 |
Deferred tax assets | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax assets, beginning balance | 279,394 | 240,578 | |
Translation differences | (82) | (4,831) | |
Deferred tax (charge) credit | (136) | 7,131 | |
Credits directly to other comprehensive income | 12,100 | 19,537 | |
Deferred tax expense (income) relating to tax rate changes or imposition of new taxes | 16,979 | ||
Deferred tax assets, ending balance | $ 291,276 | $ 279,394 | $ 240,578 |
DEFERRED INCOME TAX (Schedule o
DEFERRED INCOME TAX (Schedule of deferred tax assets and liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred income tax [Abstract] | |||
Deferred tax assets to be recovered after more than 12 months | $ 200,639 | $ 203,607 | |
Deferred tax assets to be recovered within 12 months | 90,637 | 75,787 | |
Deferred tax liabilities to be settled after more than 12 months | (446,891) | (454,763) | |
Deferred tax liabilities to be settled within 12 months | (32,167) | (64,371) | |
Deferred tax liability (asset) | $ (187,782) | $ (239,740) | $ (340,207) |
OTHER LIABILITIES - NON CURRE_3
OTHER LIABILITIES - NON CURRENT AND CURRENT (Other liabilities - Non-current) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of other liabilities [Abstract] | ||
Post-employment benefits | $ 432,648 | $ 405,935 |
Other employee benefits | 52,647 | 44,496 |
Asset retirement obligation | 41,673 | 26,556 |
Other | 24,888 | 30,616 |
Other liabilities – Non-current | $ 551,856 | $ 507,603 |
OTHER LIABILITIES - NON CURRE_4
OTHER LIABILITIES - NON CURRENT AND CURRENT (Schedule of other liabilities in statement of financial position) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of net defined benefit liability (asset) [line items] | |||
Net defined benefit liability (asset) - beginning balance | $ 405,935 | $ 312,293 | |
Transfers, new participants and funding of the plan | (2) | (6) | |
Total expense | 36,093 | 39,086 | $ 29,862 |
Remeasurements | 36,907 | 67,601 | |
Effect of changes in demographic assumptions | (545) | 674 | |
Effect of changes in financial assumptions | 30,830 | 55,059 | |
Effect of experience adjustments | 6,622 | 11,868 | |
Translation differences | (21,722) | 12,228 | |
Contributions paid | (24,563) | (25,267) | |
Net defined benefit liability (asset) - ending balance | 432,648 | 405,935 | $ 312,293 |
Present value of defined benefit obligation | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Net defined benefit liability (asset) - beginning balance | 405,935 | ||
Net defined benefit liability (asset) - ending balance | $ 432,648 | $ 405,935 |
OTHER LIABILITIES - NON CURRE_5
OTHER LIABILITIES - NON CURRENT AND CURRENT (Schedule of amounts recognized in income statement) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of other liabilities [Abstract] | |||
Current service cost | $ 9,954 | $ 11,776 | |
Interest cost | 26,139 | 27,310 | |
Total included in labor costs | $ 36,093 | $ 39,086 | $ 29,862 |
OTHER LIABILITIES - NON CURRE_6
OTHER LIABILITIES - NON CURRENT AND CURRENT (Actuarial assumptions of defined benefit obligation) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Bottom of range | ||
Disclosure of defined benefit plans [line items] | ||
Estimate of contributions expected to be paid to plan for next five years | $ 25.9 | |
Top of range | ||
Disclosure of defined benefit plans [line items] | ||
Estimate of contributions expected to be paid to plan for next five years | $ 34 | |
Mexico | Bottom of range | ||
Disclosure of defined benefit plans [line items] | ||
Compensation growth rate | 6.00% | 6.00% |
Mexico | Top of range | ||
Disclosure of defined benefit plans [line items] | ||
Compensation growth rate | 7.00% | 7.00% |
Argentina | Bottom of range | ||
Disclosure of defined benefit plans [line items] | ||
Discount rate | 6.00% | 6.00% |
Compensation growth rate | 2.00% | 2.00% |
Argentina | Top of range | ||
Disclosure of defined benefit plans [line items] | ||
Discount rate | 7.00% | 7.00% |
Compensation growth rate | 3.00% | 3.00% |
Discount rate | ||
Disclosure of defined benefit plans [line items] | ||
Percentage of reasonably possible increase in actuarial assumption | 1.00% | |
Percentage of reasonably possible decrease in actuarial assumption | 1.00% | |
Increase in assumption, Impact on defined benefit obligation | (10.00%) | |
Decrease in assumption, Impact on defined benefit obligation | 12.30% | |
Discount rate | Mexico | ||
Disclosure of defined benefit plans [line items] | ||
Discount rate | 6.50% | 7.25% |
Compensation growth rate | ||
Disclosure of defined benefit plans [line items] | ||
Percentage of reasonably possible increase in actuarial assumption | 1.00% | |
Percentage of reasonably possible decrease in actuarial assumption | 1.00% | |
Increase in assumption, Impact on defined benefit obligation | 2.60% | |
Decrease in assumption, Impact on defined benefit obligation | (1.80%) | |
Pension growth rate | ||
Disclosure of defined benefit plans [line items] | ||
Percentage of reasonably possible increase in actuarial assumption | 1.00% | |
Percentage of reasonably possible decrease in actuarial assumption | 1.00% | |
Increase in assumption, Impact on defined benefit obligation | (1.20%) | |
Decrease in assumption, Impact on defined benefit obligation | 1.40% | |
Life expectancy | ||
Disclosure of defined benefit plans [line items] | ||
Reasonably possible increase in actuarial assumption, Life expectancy | 1 year | |
Reasonably possible decrease in actuarial assumption, Life expectancy | 1 year | |
Increase in assumption, Impact on defined benefit obligation | (1.30%) | |
Decrease in assumption, Impact on defined benefit obligation | 1.60% |
OTHER LIABILITIES - NON CURRE_7
OTHER LIABILITIES - NON CURRENT AND CURRENT (Other liabilities - Current) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of other liabilities [Abstract] | ||
Payroll and social security payable | $ 113,117 | $ 107,999 |
VAT liabilities | 70,226 | 58,799 |
Other tax liabilities | 41,738 | 38,153 |
Termination benefits | 400 | 493 |
Related Parties (Note 25) | 2,004 | 2,074 |
Asset retirement obligation (Note 18) | 4,515 | 8,502 |
Others | 17,836 | 24,914 |
Other liabilities – Current | $ 249,836 | $ 240,934 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Net fair value) (Details) - Fair value hedges - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of detailed information about hedging instruments [line items] | ||
Derivative financial assets for hedging | $ 1,572 | $ 1,196 |
Derivative financial liabilities for hedging | (6,358) | (3,024) |
Interest rate swap contracts | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Derivative financial liabilities for hedging | (523) | (17) |
Foreign exchange contracts | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Derivative financial assets for hedging | 1,572 | 1,196 |
Derivative financial liabilities for hedging | $ (5,835) | $ (3,007) |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2013 | |
Disclosure of detailed information about financial instruments [line items] | ||||
Reserve of cash flow hedges, net of tax | $ (0.2) | $ (0.1) | $ 0.5 | |
Other comprehensive loss that will be reclassified to profit or loss, before tax | 0.2 | |||
Interest rate swap contracts | Tenigal S. de R.L. de C.V. | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Notional amount | $ 100 | |||
Derivative, average fixed interest rate | 1.92% | |||
Reserve of cash flow hedges, net of tax | (0.2) | |||
Non-deliverable forward contract | Ternium Colombia S.A.S | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Notional amount | 75.4 | |||
Non-deliverable forward contract | Ternium Investments S.a.r.l. | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Notional amount | 3.4 | |||
Forward contract | Ternium Mexico S.A. de C.V. | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Notional amount | 59.2 | |||
Forward contract | Ternium Investments S.a.r.l. | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Notional amount | $ 4.9 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS (Changes in fair value) (Details) - Cash flow hedges - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of analysis of other comprehensive income by item [line items] | ||
Other comprehensive income, before tax, cash flow hedges, beginning balance | $ (72) | $ 679 |
Gains (losses) on cash flow hedges, before tax | (454) | (475) |
Reclassification adjustments on cash flow hedges, before tax | 188 | (276) |
Other comprehensive income, before tax, cash flow hedges, ending balance | (338) | (72) |
Accumulated other comprehensive income, tax, beginning balance | 23 | (202) |
Gains (losses) on cash flow hedges, tax | 136 | 142 |
Reclassification adjustments on exchange differences on translation, tax | (56) | 83 |
Accumulated other comprehensive income, tax, ending balance | 103 | 23 |
Other comprehensive income, net of tax, cash flow hedges, beginning balance | (49) | 477 |
Gains (losses) on cash flow hedges, net of tax | (318) | (333) |
Reclassification adjustments on cash flow hedges, net of tax | 132 | (193) |
Other comprehensive income, net of tax, cash flow hedges, ending balance | $ (235) | $ (49) |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS (Exchange rate derivative contract) (Details) $ in Thousands, € in Millions, $ in Billions | Dec. 31, 2020USD ($) | Dec. 31, 2020EUR (€) | Dec. 31, 2020COP ($) | Dec. 31, 2019USD ($) |
Disclosure of detailed information about financial instruments [line items] | ||||
Financial assets, at fair value | $ 496,832 | $ 239,876 | ||
Financial liabilities, at fair value | (6,358) | (3,024) | ||
Forward contract | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Financial liabilities, at fair value | (4,263) | (1,811) | ||
Long | Forward contract | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Notional amount | € | € 53.7 | |||
Long | Euro Member Countries, Euro | Forward contract | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Financial assets, at fair value | 1,572 | 1,196 | ||
Short | Forward contract | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Notional amount | $ 291.5 | |||
Short | Colombia, Pesos | Forward contract | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Financial liabilities, at fair value | $ (5,835) | $ (3,007) |
LEASE LIABILITIES - Lease Liabi
LEASE LIABILITIES - Lease Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Changes in Lease Liabilities [Roll Forward] | |||
Values at the beginning of the year, current lease liabilities | $ 40,546 | $ 8,030 | |
Values at the beginning of the year, non-current lease liabilities | 298,219 | 65,798 | |
Values at the beginning of the year, lease liabilities | 338,765 | 73,828 | |
Effect of initial recognition under IFRS 16, current lease liabilities | 34,848 | ||
Effect of initial recognition under IFRS 16, non-current lease liabilities | 245,645 | ||
Effect of initial recognition under IFRS 16, lease liabilities | 280,493 | ||
Translation differences, current lease liabilities | 1,082 | 2,659 | |
Translation differences, non-current lease liabilities | (753) | (7,139) | |
Translation differences, lease liabilities | 329 | (4,480) | |
Net proceeds, current lease liabilities | 192 | 1,474 | |
Net proceeds, non-current lease liabilities | 2,978 | 24,545 | |
Net proceeds, lease liabilities | 3,170 | 26,019 | |
Indexation, current lease liabilities | (811) | ||
Indexation, non-current lease liabilities | (8,687) | ||
Indexation, lease liabilities | (9,498) | ||
Repayments, lease liabilities | (42,144) | (38,569) | $ (7,565) |
Interest accrued, lease liabilities | 16,116 | 16,755 | |
Interest paid, current lease liabilities | (12,635) | (15,281) | |
Reclassifications, current lease liabilities | 40,140 | 30,630 | |
Reclassifications, non-current lease liabilities | (40,140) | (30,630) | |
Values at the end of the year, current lease liabilities | 42,486 | 40,546 | 8,030 |
Values at the end of the year, non-current lease liabilities | 251,617 | 298,219 | 65,798 |
Values at the end of the year, lease liabilities | $ 294,103 | $ 338,765 | $ 73,828 |
LEASE LIABILITIES - Schedule of
LEASE LIABILITIES - Schedule of Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of maturity analysis of finance lease payments receivable [line items] | |||
Minimum lease payments | $ 394,473 | $ 457,727 | |
Future finance charges | (100,370) | (118,962) | |
Total Financial lease liabilities | 294,103 | 338,765 | $ 73,828 |
Within one year | |||
Disclosure of maturity analysis of finance lease payments receivable [line items] | |||
Minimum lease payments | 56,929 | 55,670 | |
Total Financial lease liabilities | 42,486 | 40,546 | |
Later than one year but not later than five years | |||
Disclosure of maturity analysis of finance lease payments receivable [line items] | |||
Minimum lease payments | 176,399 | 197,956 | |
Total Financial lease liabilities | 134,857 | 149,830 | |
Later than five years | |||
Disclosure of maturity analysis of finance lease payments receivable [line items] | |||
Minimum lease payments | 161,145 | 204,101 | |
Total Financial lease liabilities | $ 116,760 | $ 148,389 |
BORROWINGS (Current and non-cur
BORROWINGS (Current and non-current information on borrowings) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Borrowings [abstract] | ||
Bank borrowings, undiscounted cash flows, non-current | $ 1,334,369 | $ 1,639,604 |
Less: debt issue costs, non-current | (7,080) | (10,712) |
Non-current borrowings | 1,327,289 | 1,628,892 |
Bank borrowings, undiscounted cash flows, current | 399,249 | 564,497 |
Less: debt issue costs, current | (3,645) | (4,715) |
Current borrowings | 395,604 | 559,782 |
Total Borrowings | $ 1,722,893 | $ 2,188,674 |
BORROWINGS (Maturity of borrowi
BORROWINGS (Maturity of borrowings) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | $ 1,722,893 | $ 2,188,674 |
Fixed Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 129,949 | 165,623 |
Floating Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 1,592,944 | $ 2,023,051 |
2021 | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 395,604 | |
2021 | Fixed Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 129,949 | |
2021 | Floating Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 265,655 | |
2022 | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 659,942 | |
2022 | Fixed Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 0 | |
2022 | Floating Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 659,942 | |
2023 and thereafter | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 667,347 | |
2023 and thereafter | Fixed Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 0 | |
2023 and thereafter | Floating Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | $ 667,347 |
BORROWINGS (Weighted-average in
BORROWINGS (Weighted-average interest rate) (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Weighted average | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings, interest rate | 1.43% | 2.94% |
BORROWINGS (Borrowings by curre
BORROWINGS (Borrowings by currency) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | $ 1,722,893 | $ 2,188,674 |
Floating Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 1,592,944 | 2,023,051 |
Fixed Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 129,949 | 165,623 |
United States of America, Dollars | Floating Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 1,557,483 | 1,977,617 |
United States of America, Dollars | Fixed Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 113,268 | 148,712 |
Argentina, Pesos | Floating Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 8 | 10 |
Mexico, Pesos | Floating Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 6,256 | 14,789 |
Colombia, Pesos | Floating Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 29,197 | 30,634 |
Colombia, Pesos | Fixed Rate | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | $ 16,681 | $ 16,912 |
BORROWINGS (Significant borrowi
BORROWINGS (Significant borrowings) (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2018 |
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | $ 1,722,893,000 | $ 2,188,674,000 | |
Tenigal Syndicated Loan Due July 2022 | |||
Disclosure of detailed information about borrowings [line items] | |||
Original principal amount | 200,000,000 | ||
Borrowings | 50,000,000 | ||
Ternium Investments S.à r.l Syndicated Loan Due September 2022 | |||
Disclosure of detailed information about borrowings [line items] | |||
Original principal amount | 1,500,000,000 | ||
Borrowings | 400,000,000 | ||
Ternium Mexico Syndicated Loan Due June 2023 | |||
Disclosure of detailed information about borrowings [line items] | |||
Original principal amount | 1,000,000,000 | $ 1,000,000,000 | |
Borrowings | 500,000,000 | ||
Ternium Brazil Syndicated Loan Due August 2024 | |||
Disclosure of detailed information about borrowings [line items] | |||
Original principal amount | 500,000,000 | ||
Borrowings | $ 500,000,000 |
CONTINGENCIES, COMMITMENTS AN_2
CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (Tender offer litigation) (Details) - Pending Litigation - Comphania Siderúrgica Nacional vs. Ternium Investments S.a.r.l., Siderar & Confab Industrial S.A. | 12 Months Ended |
Dec. 31, 2013R$ / sharesshares | |
Disclosure of contingent liabilities [line items] | |
Tender offer, percent | 80.00% |
Tender offer, price per share | R$ / shares | R$ 28.8 |
Tender offer, number of shares | shares | 182,609,851 |
Ternium Investments S.a.r.l. | |
Disclosure of contingent liabilities [line items] | |
Proportion of shares in tender offer | 60.60% |
Ternium Argentina S.A. | |
Disclosure of contingent liabilities [line items] | |
Proportion of shares in tender offer | 21.50% |
CONTINGENCIES, COMMITMENTS AN_3
CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (Shareholder claims, Mexican income tax adjustment & Argentine tax claim) (Details) shares in Millions, $ in Millions, R$ in Billions | Dec. 31, 2020USD ($) | Apr. 14, 2015shares | Dec. 31, 2016BRL (R$) |
Comissão de Valores Mobiliários | USINAS SIDEÚRGICAS DE MINAS GERAIS S.A. | |||
Disclosure of contingent liabilities [line items] | |||
Number of shares exceeding threshold for tender offer requirement (in shares) | shares | 5.2 | ||
Increase in capital | R$ | R$ 1 | ||
Domestic Tax Authority | Mexican Tax Authority | |||
Disclosure of contingent liabilities [line items] | |||
Tax contingent liability | $ 54.2 | ||
Additional tax contingent liability | $ 26.6 |
CONTINGENCIES, COMMITMENTS AN_4
CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (Fishermen association claims, Tax assessment relating to the use of certain ICMS tax credits) (Details) - USD ($) $ in Thousands | Sep. 07, 2017 | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of contingent liabilities [line items] | |||
Asset recognised for expected reimbursement, contingent liabilities in business combination | $ 0 | $ 254,446 | |
Gain from derecognition of contingent liabilities | 186,000 | ||
Thyssenkrupp Slab International B.V. & CSA Siderúrgica do Atlântico Ltda. | |||
Disclosure of contingent liabilities [line items] | |||
Tax benefit recognised as of acquisition date | $ 1,089,000 | ||
Acquisitions through business combinations, other provisions | 651,800 | ||
Asset recognised for expected reimbursement, contingent liabilities in business combination | 325,900 | 194,100 | 254,400 |
Contingent liabilities recognised in business combination | 380,100 | 508,900 | |
Thyssenkrupp Slab International B.V. & CSA Siderúrgica do Atlântico Ltda. | Other environment related provision | |||
Disclosure of contingent liabilities [line items] | |||
Other provisions | 24,500 | 10,900 | 14,100 |
Thyssenkrupp Slab International B.V. & CSA Siderúrgica do Atlântico Ltda. | Legal proceedings contingent liability | |||
Disclosure of contingent liabilities [line items] | |||
Other provisions | $ 57,700 | $ 34,900 | $ 45,000 |
CONTINGENCIES, COMMITMENTS AN_5
CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (Commitments) (Details) MMBTU in Thousands, t in Millions, m³ in Millions | Dec. 31, 2020USD ($)MW | Dec. 30, 2019MMBTU | Mar. 05, 2019USD ($) | May 25, 2018 | May 09, 2018MMBTU | Apr. 24, 2017MW | Jun. 30, 2008USD ($)m³ | Mar. 31, 2008electrical_plant | Dec. 20, 2000electrical_plant | Mar. 31, 2017 | Jun. 30, 2019USD ($) | Dec. 31, 2020USD ($)tMWm³ | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2006distributorMW | Feb. 13, 2019USD ($) | Jun. 30, 2018USD ($) |
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Number of electrical plants terminated | electrical_plant | 2 | ||||||||||||||||
Techgen S.A. de C.V. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term contract for purchase of electric power, term | 25 years | ||||||||||||||||
Long-term contract for purchase of electric power, electrical demand | MW | 699 | ||||||||||||||||
Percentage of electricity needs supplied | 78.00% | ||||||||||||||||
Guarantor obligations, outstanding | $ 62,500,000 | $ 62,500,000 | |||||||||||||||
Guarantor obligations, percentage of amount payable if counterparty terminates agreement | 78.00% | ||||||||||||||||
Iberdrola Energia Monterey, S.A. de C.V. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term contract for purchase of electric power, term | 25 years | ||||||||||||||||
Long-term contract for purchase of electric power, electrical demand | MW | 51.7 | 111.2 | |||||||||||||||
Percentage of electricity needs supplied | 7.00% | ||||||||||||||||
Long-term contract for purchase of electric power, credit (per megawatt) | $ 750,000 | ||||||||||||||||
Long-term contract for purchase of electric power, credit | 83,400,000 | ||||||||||||||||
Long-term contract for purchase of electric power, discount | $ 15,000,000 | ||||||||||||||||
Short-term contract for purchase of electric power, percentage discount on contract | 2.50% | ||||||||||||||||
Ternium Mexico S.A. de C.V. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Number of electrical plants | electrical_plant | 4 | ||||||||||||||||
Gas Industrial de Monterrey, S.A. de C.V. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, amount | $ 25,000,000 | ||||||||||||||||
Guarantor obligations, amount | 25,000,000 | $ 25,000,000 | |||||||||||||||
Long-term purchase commitment, obligations outstanding | 9,500,000 | 9,500,000 | |||||||||||||||
Praxair Mexico | Minimum Annual Oxygen Consumption | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment , minimum annual consumption, amount | $ 4,500,000 | ||||||||||||||||
Kinder Morgan Texas Pipeline L.L.C., Kinder Morgan Tejas Pipeline L.L.C. and Kinder Morgan Border Pipeline L.L.C. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term contract for purchase of natural gas transportation, period | 10 years | ||||||||||||||||
Long-term contract for purchase of natural gas transportation, capacity | MMBTU | 60 | ||||||||||||||||
Long-term contract for purchase of natural gas transportation, amount | 3,700,000 | 3,700,000 | |||||||||||||||
Kinder Morgan Texas Pipeline L.L.C., Kinder Morgan Tejas Pipeline L.L.C. and Kinder Morgan Gas Natural de México S. de R.L. de C.V. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term contract for purchase of natural gas transportation, period | 15 years | ||||||||||||||||
Long-term contract for purchase of natural gas transportation, capacity | MMBTU | 31 | ||||||||||||||||
Long-term contract for purchase of natural gas transportation, amount | 4,800,000 | 4,800,000 | |||||||||||||||
Kinder Morgan Gas | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, obligations outstanding | 221,800,000 | $ 221,800,000 | |||||||||||||||
Ternium Brasil Ltda. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term contract for purchase of electric power, term | 15 years | ||||||||||||||||
Long-term contract for purchase of electric power, electrical demand | MW | 200 | ||||||||||||||||
Number of distributors | distributor | 24 | ||||||||||||||||
GE Global Parts and Products GMBH, General Electric International Inc. and Alstom Energia Térmica e Indústria Ltda. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, period for maintenance services of turbines | 20 years | ||||||||||||||||
Companhia Distribuidora de Gás do Rio de Janeiro | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, minimum percentage of volume required | 85.00% | ||||||||||||||||
LSI Logistica S.A. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, amount | 11,000,000 | ||||||||||||||||
Public utilities inventory, fuel | Air Liquide Argentina S.A. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, amount | $ 18,700,000 | ||||||||||||||||
Industrial Gas | Praxair Mexico | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, amount | 6,100,000 | $ 421,000,000 | |||||||||||||||
Long-term purchase commitment , minimum annual consumption, volume | m³ | 96 | ||||||||||||||||
Industrial Gas | Air Liquide Brasil Ltda., AirSteel Ltda., White Martins Gases Industriais Ltda., White Martins Steel Ltda. and ThyssenKrupp MinEnergy GmbH | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, amount | 228,900,000 | ||||||||||||||||
Hydrogen | Praxair Mexico | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, amount | 8,800,000 | ||||||||||||||||
Iron Ore, Pellets and Iron Ore Fines | Ternium Argentina S.A. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, minimum percentage of volume required | 80.00% | ||||||||||||||||
Long-term purchase commitment, amount | $ 385,000,000 | ||||||||||||||||
Iron Ore, Pellets and Iron Ore Fines | Vale S.A. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, total purchased volume | t | 8 | ||||||||||||||||
Turbine Maintenance | GE Global Parts and Products GMBH, General Electric International Inc. and Alstom Energia Térmica e Indústria Ltda. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, amount | $ 171,300,000 | ||||||||||||||||
Maintenance Services | Primetals Technologies Brazil Ltda. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, amount | 57,300,000 | ||||||||||||||||
Natural Gas | Tecpetrol | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, amount | 8,100,000 | ||||||||||||||||
Natural Gas | Transportadora de Gas del Norte S.A. and Energy Consulting Services S.A. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, amount | 28,500,000 | ||||||||||||||||
Natural Gas | Companhia Distribuidora de Gás do Rio de Janeiro | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, amount | $ 25,800,000 | ||||||||||||||||
Long-term purchase commitment, volume | m³ | 61.5 | ||||||||||||||||
Techgen S.A. de C.V. | Syndicated Loan | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Original principal amount | $ 640,000,000 | ||||||||||||||||
Borrowings outstanding | 44,600,000 | $ 44,600,000 | |||||||||||||||
Techgen S.A. de C.V. | Syndicated Loan | Financial Guarantee | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Guarantor obligations, outstanding | 21,400,000 | 21,400,000 | |||||||||||||||
Ternium S.A. | Kinder Morgan Gas | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Guarantor obligations, outstanding | 106,500,000 | $ 106,500,000 | |||||||||||||||
Guarantor obligations, percentage | 48.00% | ||||||||||||||||
Techgen S.A. de C.V. | Syndicated Loan | Financial Guarantee | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Guarantor obligations, percentage | 48.00% | ||||||||||||||||
Scenario one | Ternium Argentina S.A. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, minimum percentage of volume required | 80.00% | ||||||||||||||||
Long-term purchase commitment, percentage of penalty | 7.00% | ||||||||||||||||
Scenario one | Bottom of range | Ternium Argentina S.A. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, percentage of total volume actually operated | 70.00% | ||||||||||||||||
Scenario one | Top of range | Ternium Argentina S.A. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, percentage of total volume actually operated | 75.00% | ||||||||||||||||
Scenario two | Ternium Argentina S.A. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, minimum percentage of volume required | 80.00% | ||||||||||||||||
Long-term purchase commitment, percentage of penalty | 15.00% | ||||||||||||||||
Scenario two | Bottom of range | Ternium Argentina S.A. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Long-term purchase commitment, percentage of total volume actually operated | 70.00% | ||||||||||||||||
Ternium Mexico Syndicated Loan Due June 2023 | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Original principal amount | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | ||||||||||||||
Borrowings, net senior leverage ratio | 350.00% | 350.00% | |||||||||||||||
Line of credit facility, disbursed | $ 600,000,000 | $ 400,000,000 | |||||||||||||||
Borrowings outstanding | $ 500,000,000 | $ 500,000,000 | |||||||||||||||
Ternium Investments Syndicated Loan | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Original principal amount | $ 1,500,000,000 | ||||||||||||||||
Borrowings outstanding | $ 400,000,000 | $ 400,000,000 | |||||||||||||||
Repayments of non-current borrowings | $ 725,000,000 | $ 375,000,000 | |||||||||||||||
Ternium Investments Syndicated Loan | Ternium Investments S.a.r.l. | |||||||||||||||||
Disclosure of contingent liabilities [line items] | |||||||||||||||||
Debt instrument, term | 5 years |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of transactions between related parties [line items] | ||
Key management personnel compensation | $ 13,736,000 | $ 26,942 |
Key management personnel compensation (in shares) | 1,180,000 | |
Key management personnel compensation, share-based payment | $ 4,289,000 | $ 3,546 |
Techint Holdings S.à.r.l | Entities with joint control or significant influence over entity | ||
Disclosure of transactions between related parties [line items] | ||
Percentage of Company shares owned | 62.02% | |
Tenaris Investments S.a.r.l. | Entities with joint control or significant influence over entity | ||
Disclosure of transactions between related parties [line items] | ||
Percentage of Company shares owned | 11.46% |
RELATED PARTY TRANSACTIONS (Tra
RELATED PARTY TRANSACTIONS (Transactions between related parties) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related party transactions [abstract] | |||
Revenue from sale of goods and services, related party transactions | $ 449,665 | $ 593,729 | $ 917,218 |
Purchases of goods and services, related party transactions | 516,481 | 658,343 | 634,912 |
Finance income (expense) with related parties | 5,698 | 8,533 | 9,330 |
Dividends received | 6,299 | 3,111 | 8,837 |
Other income (expense), related party transactions | 1,807 | 1,915 | 1,504 |
Outstanding balances for related party transactions [abstract] | |||
Amounts receivable, related party transactions | 182,075 | 102,349 | |
Non-consolidated parties | |||
Related party transactions [abstract] | |||
Revenue from sale of goods, related party transactions | 432,511 | 515,123 | 774,526 |
Revenue from rendering of services, related party transactions | 173 | 171 | 176 |
Purchases of goods, related party transactions | 347,638 | 408,309 | 483,182 |
Services received, related party transactions | 9,421 | 14,563 | 10,266 |
Finance income (expense) with related parties | 7,182 | 9,478 | 9,330 |
Dividends received | 6,299 | 3,111 | 8,837 |
Other income (expense), related party transactions | 765 | 929 | 1,012 |
Outstanding balances for related party transactions [abstract] | |||
Amounts receivable, related party transactions | 227,074 | 167,312 | |
Advances to suppliers | 6,647 | 8,017 | |
Amounts payable, related party transactions | (30,407) | (44,784) | |
Other related parties | |||
Related party transactions [abstract] | |||
Revenue from sale of goods, related party transactions | 15,972 | 77,375 | 141,230 |
Revenue from rendering of services, related party transactions | 1,009 | 1,060 | 1,286 |
Purchases of goods, related party transactions | 83,738 | 71,324 | 50,928 |
Services received, related party transactions | 75,483 | 155,289 | 90,536 |
Purchases of goods and services received, related party transactions | 201 | 8,859 | 0 |
Finance expense lease contracts with related parties | (1,484) | (945) | 0 |
Other income (expense), related party transactions | 1,042 | 986 | $ 492 |
Outstanding balances for related party transactions [abstract] | |||
Amounts receivable, related party transactions | 3,674 | 5,027 | |
Advances to suppliers | 7,732 | 15,936 | |
Amounts payable, related party transactions | (29,095) | (41,849) | |
Lease liabilities with other related parties | $ (3,550) | $ (7,310) |
OTHER REQUIRED DISCLOSURES (Sta
OTHER REQUIRED DISCLOSURES (Statement of comprehensive income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of analysis of other comprehensive income by item [line items] | ||
Other comprehensive income, net of tax, change in value of foreign currency basis spreads | $ (3,768,944) | $ (3,707,019) |
(Decrease) / Increase on change in value of currency translation adjustment | (108,919) | (61,925) |
Reclassification of currency translation adjustment to income statement | 0 | 0 |
Other comprehensive income, net of tax, change in value of foreign currency basis spreads | (3,877,863) | (3,768,944) |
Cash flow hedges | ||
Disclosure of analysis of other comprehensive income by item [line items] | ||
Other comprehensive income, before tax, cash flow hedges, beginning balance | (72) | 679 |
Gains (losses) on cash flow hedges, before tax | (454) | (475) |
Reclassification adjustments on cash flow hedges, before tax | 188 | (276) |
Other comprehensive income, before tax, cash flow hedges, ending balance | (338) | (72) |
Accumulated other comprehensive income, tax, beginning balance | 23 | (202) |
Gains (losses) on cash flow hedges, tax | 136 | 142 |
Reclassification adjustments on exchange differences on translation, tax | (56) | 83 |
Accumulated other comprehensive income, tax, ending balance | 103 | 23 |
Other comprehensive income, net of tax, cash flow hedges, beginning balance | (49) | 477 |
Gains (losses) on cash flow hedges, net of tax | (318) | (333) |
Reclassification adjustments on cash flow hedges, net of tax | 132 | (193) |
Other comprehensive income, net of tax, cash flow hedges, ending balance | $ (235) | $ (49) |
OTHER REQUIRED DISCLOSURES (S_2
OTHER REQUIRED DISCLOSURES (Statement of cash flows) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Disclosure of additional information [Abstract] | ||||
Inventories | $ 156,517 | $ 510,972 | $ (186,409) | |
Receivables and others | (29,539) | 6,175 | 8,652 | |
Trade receivables | (12,110) | 161,454 | (123,388) | |
Other liabilities | 37,517 | (95,131) | 17,138 | |
Trade payables | 200,410 | (10,786) | 55,430 | |
Increase (decrease) in working capital | [1] | 352,795 | 572,684 | (228,577) |
Tax accrued (Note 10) | 291,488 | 196,519 | 369,435 | |
Taxes paid | (224,927) | (405,324) | (523,801) | |
Income tax accruals less payments, total | 66,561 | (208,805) | (154,366) | |
Interest accrued (Note 9 and 22) | 62,760 | 104,855 | 131,172 | |
Interest paid | (55,769) | (101,450) | (144,186) | |
Interest accruals less payments, total | $ 6,991 | $ 3,405 | $ (13,014) | |
[1] | The working capital is impacted by non-cash movement of $ (18.0) million as of December 31, 2020 ($(70.0) million and $(74.5) million as of December 31, 2019 and 2018, respectively) due to the variations in the exchange rates used by subsidiaries with functional currencies different from the U.S. dollar. |
OTHER REQUIRED DISCLOSURES (Fin
OTHER REQUIRED DISCLOSURES (Financial debt reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Liabilities arising from financing activities, beginning balance | $ (2,527,439) | $ (2,110,785) |
Cash flows | 562,327 | (11,963) |
Reclassifications | 0 | 0 |
Effect of initial recognition under IFRS 16 | (280,493) | |
Acquisitions - finance leases | (3,170) | (26,019) |
Foreign exchange adjustments | 4,633 | (88,199) |
Other non cash movements | (53,347) | (9,980) |
Liabilities arising from financing activities, ending balance | (2,016,996) | (2,527,439) |
Finance lease liabilities | ||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Liabilities arising from financing activities, beginning balance | (338,765) | (73,828) |
Cash flows | 54,779 | 53,850 |
Reclassifications | 0 | 0 |
Effect of initial recognition under IFRS 16 | (280,493) | |
Acquisitions - finance leases | (3,170) | (26,019) |
Foreign exchange adjustments | (329) | (8,834) |
Other non cash movements | (6,618) | (3,441) |
Liabilities arising from financing activities, ending balance | (294,103) | (338,765) |
Short term borrowings | ||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Liabilities arising from financing activities, beginning balance | (559,782) | (399,856) |
Cash flows | 511,203 | 231,967 |
Reclassifications | (306,414) | (306,262) |
Effect of initial recognition under IFRS 16 | 0 | |
Acquisitions - finance leases | 0 | 0 |
Foreign exchange adjustments | 4,962 | (79,365) |
Other non cash movements | (45,573) | (6,266) |
Liabilities arising from financing activities, ending balance | (395,604) | (559,782) |
Long term borrowings | ||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Liabilities arising from financing activities, beginning balance | (1,628,892) | (1,637,101) |
Cash flows | (3,655) | (297,780) |
Reclassifications | 306,414 | 306,262 |
Effect of initial recognition under IFRS 16 | 0 | |
Acquisitions - finance leases | 0 | 0 |
Foreign exchange adjustments | 0 | 0 |
Other non cash movements | (1,156) | (273) |
Liabilities arising from financing activities, ending balance | $ (1,327,289) | $ (1,628,892) |
FINANCIAL RISK MANAGEMENT (Assu
FINANCIAL RISK MANAGEMENT (Assumed financial exposure to currency risk) (Details) - United States of America, Dollars - Currency risk $ in Millions | Dec. 31, 2020USD ($) |
Euro Member Countries, Euro | |
Disclosure of nature and extent of risks arising from financial instruments [line items] | |
Risk exposure associated with instruments sharing characteristic | $ (98) |
Argentina, Pesos | |
Disclosure of nature and extent of risks arising from financial instruments [line items] | |
Risk exposure associated with instruments sharing characteristic | 101 |
Mexico, Pesos | |
Disclosure of nature and extent of risks arising from financial instruments [line items] | |
Risk exposure associated with instruments sharing characteristic | (591) |
Brazil, Brazil Real | |
Disclosure of nature and extent of risks arising from financial instruments [line items] | |
Risk exposure associated with instruments sharing characteristic | 111 |
Colombia, Pesos | |
Disclosure of nature and extent of risks arising from financial instruments [line items] | |
Risk exposure associated with instruments sharing characteristic | (21) |
Other currencies | |
Disclosure of nature and extent of risks arising from financial instruments [line items] | |
Risk exposure associated with instruments sharing characteristic | $ (2) |
FINANCIAL RISK MANAGEMENT (Mark
FINANCIAL RISK MANAGEMENT (Market risk narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Borrowings | $ 1,722,893 | $ 2,188,674 |
Weighted Average | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Borrowings, interest rate | 1.43% | 2.94% |
Currency risk | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Reasonably possible change in risk variable, percent | (1.00%) | |
Reasonably possible change in risk variable, impact on pre-tax earnings | $ 4,000 | $ 7,100 |
Net investments exposed to volatility in exchange rate, amount | 423,000 | |
Reasonably possible change in risk variable, impact on equity | $ (4,200) | |
Interest rate risk | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Reasonably possible change in risk variable, percent | 1.00% | |
Argentina, Pesos | Currency risk | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Reasonably possible change in risk variable, percent | (1.00%) | |
Reasonably possible change in risk variable, impact on pre-tax earnings | $ (1,000) | (600) |
Mexico, Pesos | Currency risk | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Reasonably possible change in risk variable, percent | (1.00%) | |
Reasonably possible change in risk variable, impact on pre-tax earnings | $ 5,900 | 5,600 |
Colombia, Pesos | Currency risk | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Reasonably possible change in risk variable, percent | (1.00%) | |
Reasonably possible change in risk variable, impact on pre-tax earnings | $ 200 | 300 |
Brazil, Brazil Real | Currency risk | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Reasonably possible change in risk variable, percent | (1.00%) | |
Reasonably possible change in risk variable, impact on pre-tax earnings | $ (1,100) | 1,800 |
Floating Rate | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Borrowings | 1,592,944 | 2,023,051 |
Floating Rate | Interest rate risk | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Reasonably possible change in risk variable, impact on pre-tax earnings | 20,300 | 22,400 |
Borrowings | $ 1,593,000 | $ 2,023,000 |
Borrowings, percentage of total borrowings | 92.50% | 92.40% |
Floating Rate | Argentina, Pesos | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Borrowings | $ 8 | $ 10 |
Floating Rate | Mexico, Pesos | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Borrowings | 6,256 | 14,789 |
Floating Rate | Colombia, Pesos | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Borrowings | $ 29,197 | $ 30,634 |
FINANCIAL RISK MANAGEMENT (Cred
FINANCIAL RISK MANAGEMENT (Credit risk narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of credit risk exposure [line items] | ||
Trade receivables | $ 918,438 | $ 950,569 |
Credit risk | ||
Disclosure of credit risk exposure [line items] | ||
Financial assets, investments assessed as investment grade, percent | 61.10% | 92.60% |
Trade receivables | $ 918,400 | $ 950,600 |
Financing Receivables, Equal to Greater than 1 Day Past Due | Credit risk | ||
Disclosure of credit risk exposure [line items] | ||
Trade receivables | 36,600 | 86,300 |
Allowance for doubtful account | 10,500 | 13,000 |
Performing Financial Instruments | Credit risk | ||
Disclosure of credit risk exposure [line items] | ||
Trade receivables | 892,300 | 877,200 |
Performance Guarantee | Credit risk | ||
Disclosure of credit risk exposure [line items] | ||
Trade receivables | 1,300 | 3,400 |
Credit Insurance | Credit risk | ||
Disclosure of credit risk exposure [line items] | ||
Trade receivables | 422,800 | 469,300 |
Guarantee Type, Other | Credit risk | ||
Disclosure of credit risk exposure [line items] | ||
Trade receivables | $ 7,300 | $ 16,400 |
FINANCIAL RISK MANAGEMENT (Inve
FINANCIAL RISK MANAGEMENT (Investments in financial assets - credit risk) (Details) - Credit risk - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Cash and cash equivalents | ||
Disclosure of credit risk exposure [line items] | ||
Maximum exposure to credit risk | $ 537,882 | $ 519,965 |
Other Investments - Current and Non-Current | ||
Disclosure of credit risk exposure [line items] | ||
Maximum exposure to credit risk | 816,157 | 215,273 |
Fixed Income (time-deposit, zero-coupon bonds, commercial papers) | ||
Disclosure of credit risk exposure [line items] | ||
Maximum exposure to credit risk | 579,917 | 176,470 |
Deposit certificates | ||
Disclosure of credit risk exposure [line items] | ||
Maximum exposure to credit risk | 451,857 | 160,933 |
Commercial papers | ||
Disclosure of credit risk exposure [line items] | ||
Maximum exposure to credit risk | 128,060 | 15,537 |
Bonds and other fixed income | ||
Disclosure of credit risk exposure [line items] | ||
Maximum exposure to credit risk | 233,611 | 38,803 |
Non - U.S. government securities | ||
Disclosure of credit risk exposure [line items] | ||
Maximum exposure to credit risk | 135,671 | 914 |
Corporate securities | ||
Disclosure of credit risk exposure [line items] | ||
Maximum exposure to credit risk | 97,940 | 37,889 |
Other notes | ||
Disclosure of credit risk exposure [line items] | ||
Maximum exposure to credit risk | $ 2,629 | $ 0 |
FINANCIAL RISK MANAGEMENT (As_2
FINANCIAL RISK MANAGEMENT (Assumed financial exposure to credit risk) (Details) - Credit risk $ in Millions | Dec. 31, 2020USD ($) |
Disclosure of credit risk exposure [line items] | |
Trade and other receivables | $ 1,450 |
United States of America, Dollars | |
Disclosure of credit risk exposure [line items] | |
Trade and other receivables | 798 |
Euro Member Countries, Euro | |
Disclosure of credit risk exposure [line items] | |
Trade and other receivables | 14 |
Argentina, Pesos | |
Disclosure of credit risk exposure [line items] | |
Trade and other receivables | 12 |
Mexico, Pesos | |
Disclosure of credit risk exposure [line items] | |
Trade and other receivables | 160 |
Brazil, Brazil Real | |
Disclosure of credit risk exposure [line items] | |
Trade and other receivables | 397 |
Colombia, Pesos | |
Disclosure of credit risk exposure [line items] | |
Trade and other receivables | 68 |
Other currencies | |
Disclosure of credit risk exposure [line items] | |
Trade and other receivables | $ 1 |
FINANCIAL RISK MANAGEMENT (Liqu
FINANCIAL RISK MANAGEMENT (Liquidity risk) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of maturity analysis for financial assets held for managing liquidity risk [line items] | ||
Lease liabilities | $ 394,473 | $ 457,727 |
Net debt | 371,000 | |
2021 | ||
Disclosure of maturity analysis for financial assets held for managing liquidity risk [line items] | ||
Lease liabilities | 56,929 | 55,670 |
Thereafter | ||
Disclosure of maturity analysis for financial assets held for managing liquidity risk [line items] | ||
Lease liabilities | 161,145 | $ 204,101 |
Liquidity risk | ||
Disclosure of maturity analysis for financial assets held for managing liquidity risk [line items] | ||
Net debt | 371,500 | |
Liquidity risk | 2021 | ||
Disclosure of maturity analysis for financial assets held for managing liquidity risk [line items] | ||
Borrowings | 396,000 | |
Interest to be accrued | 26,000 | |
Trade payables and other liabilities | 1,024,000 | |
Lease liabilities | 42,000 | |
Total | 1,488,000 | |
Liquidity risk | 2022 | ||
Disclosure of maturity analysis for financial assets held for managing liquidity risk [line items] | ||
Borrowings | 660,000 | |
Interest to be accrued | 17,000 | |
Trade payables and other liabilities | 13,000 | |
Lease liabilities | 42,000 | |
Total | 732,000 | |
Liquidity risk | 2023 | ||
Disclosure of maturity analysis for financial assets held for managing liquidity risk [line items] | ||
Borrowings | 137,000 | |
Interest to be accrued | 9,000 | |
Trade payables and other liabilities | 8,000 | |
Lease liabilities | 42,000 | |
Total | 196,000 | |
Liquidity risk | 2024 | ||
Disclosure of maturity analysis for financial assets held for managing liquidity risk [line items] | ||
Borrowings | 521,000 | |
Interest to be accrued | 4,000 | |
Trade payables and other liabilities | 7,000 | |
Lease liabilities | 28,000 | |
Total | 560,000 | |
Liquidity risk | Thereafter | ||
Disclosure of maturity analysis for financial assets held for managing liquidity risk [line items] | ||
Borrowings | 9,000 | |
Interest to be accrued | 0 | |
Trade payables and other liabilities | 38,000 | |
Lease liabilities | 140,000 | |
Total | $ 187,000 |
FINANCIAL RISK MANAGEMENT (Capi
FINANCIAL RISK MANAGEMENT (Capital risk narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of nature and extent of risks arising from financial instruments [line items] | |||
Debt to capital ratio | 17.00% | 22.00% | |
Reserve of cash flow hedges, net of tax | $ (0.2) | $ (0.1) | $ 0.5 |
Cash flow hedges | |||
Disclosure of nature and extent of risks arising from financial instruments [line items] | |||
Reserve of cash flow hedges, net of tax | $ (0.2) |
FINANCIAL RISK MANAGEMENT (Fina
FINANCIAL RISK MANAGEMENT (Financial assets and liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Financial assets [abstract] | |||||||
Receivables | $ 153,527 | $ 406,370 | |||||
Derivative financial instruments | 1,572 | 1,196 | |||||
Trade receivables | 918,438 | 950,569 | |||||
Other investments | 816,157 | 215,273 | |||||
Cash and cash equivalents | 537,882 | [1] | 519,965 | [1] | $ 250,541 | [1] | $ 337,779 |
Total Assets | 2,427,576 | 2,093,373 | |||||
Financial liabilities [abstract] | |||||||
Other liabilities | 86,070 | 88,403 | |||||
Trade payables | 1,004,216 | 836,204 | |||||
Derivative financial liabilities | 6,358 | 3,024 | |||||
Finance lease liabilities | 294,103 | 338,765 | $ 73,828 | ||||
Borrowings | 1,722,893 | 2,188,674 | |||||
Total Liabilities | 3,113,640 | 3,455,070 | |||||
Liabilities at fair value through profit or loss | |||||||
Financial liabilities [abstract] | |||||||
Other liabilities | 0 | 0 | |||||
Trade payables | 0 | 0 | |||||
Derivative financial liabilities | 6,358 | 3,024 | |||||
Finance lease liabilities | 0 | 0 | |||||
Borrowings | 0 | 0 | |||||
Total Liabilities | 6,358 | 3,024 | |||||
Amortized cost | |||||||
Financial liabilities [abstract] | |||||||
Other liabilities | 86,070 | 88,403 | |||||
Trade payables | 1,004,216 | 836,204 | |||||
Derivative financial liabilities | 0 | 0 | |||||
Finance lease liabilities | 294,103 | 338,765 | |||||
Borrowings | 1,722,893 | 2,188,674 | |||||
Total Liabilities | 3,107,282 | 3,452,046 | |||||
Amortized cost | |||||||
Financial assets [abstract] | |||||||
Receivables | 153,527 | 406,370 | |||||
Derivative financial instruments | 0 | 0 | |||||
Trade receivables | 918,438 | 950,569 | |||||
Other investments | 579,917 | 176,470 | |||||
Cash and cash equivalents | 278,862 | 320,088 | |||||
Total Assets | 1,930,744 | 1,853,497 | |||||
Assets at fair value through profit or loss | |||||||
Financial assets [abstract] | |||||||
Receivables | 0 | 0 | |||||
Derivative financial instruments | 1,572 | 1,196 | |||||
Trade receivables | 0 | 0 | |||||
Other investments | 2,629 | 0 | |||||
Cash and cash equivalents | 259,020 | 199,877 | |||||
Total Assets | 263,221 | 201,073 | |||||
Assets at fair value through OCI | |||||||
Financial assets [abstract] | |||||||
Receivables | 0 | 0 | |||||
Derivative financial instruments | 0 | 0 | |||||
Trade receivables | 0 | 0 | |||||
Other investments | 233,611 | 38,803 | |||||
Cash and cash equivalents | 0 | 0 | |||||
Total Assets | $ 233,611 | $ 38,803 | |||||
[1] | It includes restricted cash of $54, $69 and $2,216 as of December 31, 2020, 2019 and 2018, respectively. In addition, the Company had other investments with a maturity of more than three months for $813,527, $212,271 and $44,529 as of December 31, 2020, 2019 and 2018, respectively. |
FINANCIAL RISK MANAGEMENT (Fi_2
FINANCIAL RISK MANAGEMENT (Financial assets and liabilities at fair value) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | $ 496,832 | $ 239,876 |
Financial liabilities, at fair value | 6,358 | 3,024 |
Level 1 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 492,631 | 238,680 |
Financial liabilities, at fair value | 0 | 0 |
Level 2 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 1,572 | 1,196 |
Financial liabilities, at fair value | 6,358 | 3,024 |
Level 3 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 2,629 | 0 |
Financial liabilities, at fair value | 0 | 0 |
Derivatives | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial liabilities, at fair value | 6,358 | 3,024 |
Derivatives | Level 1 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial liabilities, at fair value | 0 | 0 |
Derivatives | Level 2 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial liabilities, at fair value | 6,358 | 3,024 |
Derivatives | Level 3 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial liabilities, at fair value | 0 | 0 |
Cash and cash equivalents | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 259,020 | 199,877 |
Cash and cash equivalents | Level 1 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 259,020 | 199,877 |
Cash and cash equivalents | Level 2 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 0 | 0 |
Cash and cash equivalents | Level 3 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 0 | 0 |
Other investments | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 236,240 | 38,803 |
Other investments | Level 1 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 233,611 | 38,803 |
Other investments | Level 2 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 0 | 0 |
Other investments | Level 3 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 2,629 | 0 |
Derivatives | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 1,572 | 1,196 |
Derivatives | Level 1 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 0 | 0 |
Derivatives | Level 2 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | 1,572 | 1,196 |
Derivatives | Level 3 | ||
Disclosure of fair value measurement of assets [line items] | ||
Financial assets, at fair value | $ 0 | $ 0 |
THE COVID-19 PANDEMIC AND ITS_2
THE COVID-19 PANDEMIC AND ITS IMPACT ON TERNIUM - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Unusual or Infrequent Items, or Both, Disclosure1 [Abstract] | |||
Cash flows from (used in) operating activities | $ 1,761,246 | $ 1,647,619 | $ 1,739,265 |
Capital expenditures | 560,013 | $ 1,052,252 | $ 520,250 |
Net debt | $ 371,000 |
FOREIGN EXCHANGE RESTRICTIONS_2
FOREIGN EXCHANGE RESTRICTIONS IN ARGENTINE SUBSIDIARIES - (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of subsidiaries [line items] | ||||
Net sales | $ 8,735,435 | $ 10,192,818 | $ 11,454,807 | |
Assets | 12,856,235 | 12,935,533 | ||
Liabilities | 4,413,082 | 5,220,660 | ||
Equity | 8,443,153 | 7,714,873 | $ 7,484,576 | $ 5,852,771 |
Financial assets | 2,427,576 | 2,093,373 | ||
Financial liabilities | 3,113,640 | 3,455,070 | ||
Ternium Argentina S.A. | ||||
Disclosure of subsidiaries [line items] | ||||
Net sales | 1,823,000 | 1,789,000 | ||
Profit (loss) from continuing operations | 268,000 | 131,000 | ||
Assets | 3,268,000 | 2,969,000 | ||
Liabilities | 430,000 | 338,000 | ||
Equity | 2,838,000 | $ 2,631,000 | ||
Financial assets | 278,000 | |||
Financial liabilities | $ 165,000 |