TX - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. My name is Kayla, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ternium Second Quarter 2024 Results. [Operator Instructions] I would now like to turn the call over to Sebastian Marti.

You may begin.

Sebastián Martí

you. Thank thank us. and for you morning, joining Good My Compliance Senior Sebastian Marti, IR and Ternium's Global Director. name is Yesterday, Ternium released and its financial results for half XXXX. the the of first second quarter complement This intended that presentation. call to is Vedoya, I'm joined Brizzio, Chief environment Officer, Financial Chief business Officer; will Ternium's performance. and Ternium's discuss Ternium's who and today Pablo Executive Maximo by

We will questions to prepared our open following the floor remarks.

from implied. and to today's conference call Before that this that results results we in that actual begin, are or Exchange X remind our the I you and those may could affect filings in vary would on Page presentation. Factors Securities forward-looking information expressed Commission like contained webcast contains and with

measures to financial issued any will release to the in yesterday. With find that, You I'll IFRS over measures the non-IFRS Vedoya. also to Mr. turn press the reference reconciled call comparable most directly

Maximo Vedoya

us from second you earnings for EBITDA quarter strong capital due which even and company the thank of environment. call. to Good during XX% distributing stable a weak expansion posted margin for of a Ternium quarter's billion, steel morning, for adjusted contributed price during net quarter, cash with operation a significant shipments, healthy cash joining our of position $X.X $XXX generated after dividends initiatives. record to and The sustaining maintaining a the second million million, maintaining solid $XXX today ongoing expenditures

court's motions both to sole applicable the related governance by law. affected of contradicts shareholders' file of not decision decision XXXX. by court We net court occurred of plan make recording and last which control to how in the now change the in of in adverse long such back The to when defend accounting a Usiminas notions payment and the of result has a change to before was amount, that acquisition an proceeding. confirmed acquire addition, the such strongly a Usiminas and in precedents agreement position, terms need their that the procedural view contrary finding a over in of we final, resolved joined required previous be group. the an quarter Ternium appeals that we available all becomes substantive control issued our and did will Usiminas of is and case control separate believes us. in we decisions, a to a and In June determination be by worked as income should our Consequently, during if All stake provision an were court to lower line Usiminas' appeals and actual made reality. any, been Brazilian

of next of are rest projects. first in give tons the Let the me XXX,XXX our line Pesqueria. on am between finishing to in new in the finishing just glad galvanized line, pickling started on XXXX. year to we lines end line our the of rolling I that and you cold track be a The end say and mill be up an by update the year, the the and ready lines also should project, downstream and now growth the first delivered beginning of center the

our of certification times R&D In our shorten improve simulator to addition, will a July, galvanize Mexico. assessment early introduced in product new This us quality. we in in enable and center the

and energy products a the automotive, are value-added leading agriculture Mexico we in industries, we renewable construction demand will in meet With R&D project nearshoring. consolidate and steel better in appliance position as great continue serve products as our home new for customers us to opportunity high-end as the our and region, imports the to adding our steel for to in a downstream sectors. These that from new and well lines center, supplier benefiting the enable the Mexico, as more steel displacing are in us

new will USMCA as enhance and slab by expansion low progress. capabilities and is Pesqueria steel project expected the are a our in million with projects In us addition, region mill the about X.X tons leader position steelmakers. largest in our in continues the These advance in we emission mid-XXXX. This to its completion history, thrilled

X% increase markets. about our steel with Industrial market strong operating consumption. destocking first after make by auto year's process. little now good me industry the which commercial XX% increased levels in market this a at prices quarter, Mexico showing Let market during steel half some induces has healthy steel stable demand. year remains steel in been significant downturn is The the steel Mexico comments main and The the of healthy, steel in year-over-year a last affected year-over-year. in Automotive production the apparent more

impacted In addition, the of -- end the quarter. construction storm activity by a has was by tropical

as On Section the this U.S. development melted in poured be the implementation logistics not market XX% the in imports on by other projects. A hand, -- XXX pipeline as warehousing strong, well natural Mexico and to the gas of a produced, under related USMCA duty steel of activity to from region. the infrastructure and recent administration was continues of

be export exempted Mexico's duty. being this of exception process steel is steel formal. this, Following announced products President made from with in that of Brazilian This would

Mexican need a has supposed market about there -- of discussion transshipments and through much Mexico. imports control been steel to Chinese this of the of steel about Regarding U.S. steel subject, surge in the

surplus steel to U.S. the million tons X.X view is trade of even Mexico for mutually Steel finished Mexico. and me is mistaken, clear, indicates be XXXX, let So, and the exported with metric trade In U.S. U.S. the data between opposite the situation. this beneficial a

This million of is to exported On finished tons exported hand, XX% the Mexico. steel other U.S. U.S. the Mexico than less the what X.X to

steel Mexico market Looking Mexican of while X.X% represents in from at share, of share, the share. only represents these of U.S. market numbers market terms steel XX% U.S.

to U.S. in rose this XXXX. Mexico's strong the Mexico SEMA only by shows year, declined via months export Canada. the Mexico finished regarding Oman, unfair to that responsible in issue. from U.S. Regarding the X work trade when come XXXX, Mexican to it finished XXXX steel and XX% this exports XXX,XXX the of the in This countries. Mexico published compared Mexico, from volume, while that Mexico period steel against statistics export nothing. surge almost transshipment, contrast, trend has followed U.S. by countries, to when in first by USMCA decreased to observed comparing by same truly X% In U.S. the to XX%, -- imports steel third and year-over-year. And the of shown from on continues XX% XX% China's which of economy, tons U.S. the of XX%. of to volume, harm commitment in in was U.S. export XX% a that entered Mexico Asian for mainly X.X% from fight China Of practice, from Thailand, continues melted increased

data plainly avoid to trade a the U.S. nor U.S.A. misconception, neither that show surge in exports transshipment market. So, China there's steel Mexico to

although on Mexico Brazil, issues our de blast during now, an is with the quarter. resolved, to furnace capacity Janeiro furnace our to one operational now slab had Rio in we back shipments full had Moving the in were impact this and second facility the

second flat years. does last segments, shipments Usiminas' during its production XX due second increased blast blast the X automotive achieve finished Usiminas' all which hand, blast efficiency of the being past stabilization was growth the monthly the X quarter. Crude in done especially and by #X, the steel blast with furnace now today in furnace in June, the manufacturing this XX% Usiminas has with On furnaces steel of consumption gains industry Brazil achieved, reflecting the in to significant in There in the X%, the was This country quarter. growth what highest In production of other sector, in ramp-up. to as grew apparent is furnaces. with able are

countries a second of until the what not other in certain steel imports On safeguard past, have talked the falls region market predatory to import we faces positive, products decline that The And imports is serious exceed short we the the recent for measure. conditions, from significant from domestic quarter hand, threat tariffs local have Brazilian in inefficient to producers. XX% seen now, have in but some in their the a the a quarter. China. sector steel and adopted other in increase as mostly during It the any

province action have of improvement introduction faith down the their to We the demand, recover additional decrease that steel construction continue in measures economic trade a maintain with by operational authorities gradual will course the our be the climate industrial of impact after first advancing change by to significant with situation quarter, although of in measures in Buenos acknowledge shipments farm reflecting in our Aires Argentina, the and Argentina, began initiatives the are first they the of road. In change the stabilization should short-term wind Argentina's on-schedule year-end. initiative, climate and which affected government sectors. On our be construction on

in addition, agenda by In United reports school voluntary for towards our Nations' sustainability was national the Mexican development. government technical in Pesqueria recognized the

technical or XXXX, Since with companies serves it either XXX staying how than can and positively employed. an a communities of was Our [ impact school graduated in as has institution model ] more students considered XX% as that sustainability. their the established school

commence We de set are with Cruz, this Santa our technical Janeiro, our Rio practice -- second with extending which plant to of to the in construction in [indiscernible]. Brazil near school activities next

as lower expected we and healthy as main bottom rise markets the increase of following margins regarding to price continue in to beginning we steel quarter positive to the anticipate After am are I move and contract showing our related in of shipments lagged Finally, the margins quarters. are down prices an performance at trends. third demand through reset ] to levels, costs with growing [ Ternium's

quarter. performance comments Pablo, proceed in now with about the Okay. please second your our

Pablo Brizzio

Maximo, to Thanks, morning everyone. and good

now financial the for quarter presentation review performance. with will detailed we company Let's and start results. If review the of our Page operating X, look second we at webcast

with were achieved a margin primary decrease, our Our per of adjusted settling the in a lower EBITDA Consequently, sequential realized change key drivers million. together at prices rise adjusted ton. our EBITDA cost markets, saw in XX%. slight $XXX modest The

result adjust in Looking the as as litigation prices adverse margins, is recording June. ahead primarily partially steel this although decision prices increased mainly of spot conditions acquisition third second a in in to issued already offset Usiminas related the a shipments court million We provision the by negatively in a We for Mexico quarter. Net of levels to prices the the during to anticipate increase EBITDA to because in of quarter, to Maximo result decline a the markets make during due income $XXX were adjust was required expects third will quarter, participation in soft across That in Ternium contract will that quarter an lower key lower EBITDA. Brazilian of realized affected XXXX the mentioned. ongoing impact.

significant a depreciation of reflecting in million, Mexican $XX to to U.S. due sequentially deferred million decreased peso the income taxes change of X% the net adjusted dollar provision, during the the this Excluding $XXX quarter. against

to steel shipment Now, earnings the we an last our X. turn increase Page Mexico. attention our segment on In let's guided of our in for release performance call, in

slight quarter. fact, in In in steel shipment Mexico second decline Ternium's the experienced

market, a in negatively during Maximo, by the quarter. steel explained in affected already the As prices downturn commercial demand by was whole

In household State also the the in storm, Leon appliance by negatively small increasing tropical U.S. during tied some chain Tamaulipas affected in addition, a housing impacted with remained to decline shipments which the strong In in automotive and of industrial were industry markets, Nuevo industry, June. the value

by levels. Shipments markets in in manageable automotive in manufacturing we with second forward, stocks the quarter, growth all in a the Brazil anticipate X% particularly commercial chain across industrial Mexico industry and segments, and consistent with Looking sequentially in demand increased supply sector. the

a the Looking in and in ahead, industries we by in Region, quarter, reflecting the supported automotive steel third construction saw rise in growth shipments projected the slight steel the market. sector. In increase, improving Southern conditions the advances Argentina of the expect shipments

anticipate Argentina we for While the shipment in increase in an pace quarter. recovery the third the of remains uncertain,

Let's page. on now segment consolidated profitability next steel the the sales review and

steel chart, by price segment, Looking main per lower steel impacted margins operating markets. the steel right second and Ternium's realized sales income decline. declined due primarily in at Cash were also for the the product chart, in top quarter, ton to prices upper-left the in the

ton Additionally, per cost slightly during this increased period.

of expect Looking and to spot contract Mexico prices effect the lower to ahead, condition. decline levels quarter, third margins current in prices sequentially soft the primarily the in we due to

revenue to net performance both the see per that turn to stable examine of and mining steady. On and Page X, adjusted second X segment. were mining the in the remained the Page Now, sales quarter for as segment net We let's the income. see ton volume EBITDA let's

the significant the decreased in and In highlighted per in we cost EBITDA, have As in below, previously drop in the a commented, adjusted minor markets the primary and depreciation Mexican top net was ton. the our key sequential results. realized factors decrease chart impact in loss, chart from increase a prices can offset tax I financial higher operating the we the deferred of before. the due This results of by as the improved see mentioned to partially primarily income peso,

right The the slide a let's X, was half position working financial position flow the of increase part helped Now, $XXX constructions which let's $X.X activities evaluate Page Steel of declined consolidation shipment which year-over-year, also by billion, contributed a right a provided modest industrial $XXX the tons per consolidation ADS adjusted period new of of year of reached the farm -- next steel the wind The the $X.X EBITDA The second our of with in maintain of a the chart. million value performance to due only to in cash the solid of million projects this Pesqueria the cash end to represents tax first capital. Ternium's million year. decrease mentioned compared loss and at X.X lower dividends. Coming the year. the in to chart, to quarter, [ ] with first of primarily This margin cash Argentina. shipments, see second proceed of in in for expenditures upstream first the center decrease the in deferred a instruments, $X.X last our decline on net prices the stood in lower the fair in by was to advances while strong together performance X.X record of billion. lower driven mining of Usiminas we half of the growth in In million, generated, earnings flow financial also level in This in Capital during [ half is the [ decline operating strong before. Usiminas, $XXX second largely quarter in year. half. and upper as to experiencing was attributable Adjusted ] ] operational the first last half. shown cash paid and as the first during a quarter, the influenced by I've the advancing were downstream half results and development our the in

of slide, On accounting the in the in the $XXX flow half million, to from first cash XXXX, free was strong flow of amounting operations billion. was first of final $X.X the After $XXX for year capital half cash million. expenditures

with session. Please you this, now can much remarks, and for attention. ahead. the your [indiscernible] our start we Thank we So very Q&A initial go

Operator

America. question from Our Ribeiro comes first Bank the Instructions] of of line [Operator Caio with

Caio Ribeiro

correction shoots secondly, see whether I green if have reducing be asset? wanted the revised would iron any ore which specific any my regarding the if months, your update whether in asset, the would if sales that the to would then you just note, So, U.S., certain question prices you MUSA, production you an more iron any in a expect a that then from levels could emerging per level there related that on to just first market-related. MUSA, decision and planned ahead, where project if MUSA still be wanted updates changes to or you last under see there recent at when take similar is expectations to $XXX not. price and third-party which over could and in to pressure HRC would expansion a have with the you potential And And prices with see provide not, asset? been front, your ore more ton, to on support and I any to the a contemplate CapEx rebound. And on

Maximo Vedoya

Caio, you, your for questions. Thank

were end $XXX are The the guess, in the first in month. I around end week, today seeing But not America we said my coils prices. in or -- month, the per the to we these metric by last but one, prices in rolled I prices last of hot by U.S. North last of by ton U.S., remarks, that increasing initial are seeing it July, down the

is bottom that we the So this price. feel of a

or in Mexico Of a lack this to not the in In this, different the of long-term, medium I are part the some course, and the part, in it is because of and yes, you're very the third that to going U.S. said, pricing, we our we as always in more strong sectors. both part this our are is seeing some that of indication seeing I up. demand of still realize think in bottom quarter contract be business. But coming

last grew year, affecting of But and in which X and clearly, that China growing in or of of Again, was think And for I prices see by and the to X on to come the a that steel. U.S. still of U.S. months, the the XX% the this I markets, Mexico, the apparent impacted or China, although production, down. is Mexico, last is it excess -- U.S. down, record this the shipping Mexico coming production is months other steel in are robust see demand has couple which to then coming this last consumption I volume it is of been has But not Mexico. It's export that what

are near the be up I evidence Caio, the going this, in with a first your hope yes, prices will on one, and the future. clear I think, at I questions, are bottom, is seeing it answered and we So least. bottom, that up going

Caio Ribeiro

definitely. Yes, very That's clear.

Maximo Vedoya

Perfect.

but remember, next project year. don't the I by the the but past, the in talked be taken we decision of should think I MUSA end MUSA, of Second,

project. working We on are the

all on we the the are not -- will project. the which be the it team everything. engineering, yes, decision next -- decision advancing we that by production, we should huge seeing the scope But the is year. And the a not the advancing decline all are of production. decline end the working are be -- in to make working we that going in the We today need, permission, a in the things all year. -- this There of are Probably a technology, permissions or regarding

to bit, but a As a a little bit then volatile, going you decreasing bit. then well again mentioned, have little decreasing little to then are prices $XXX, going been they up up $XXX,

that the spectrum the ore. So is of of of the MUSA bottom $XXX prices we with price that the not comfortable, kind work very, of it but can iron that price. It's seems very are

So huge decline of part a a cost be huge. shouldn't probably the but we some MUSA, we or are not of part, revising volumes but a MUSA, small of are in marginal it expecting in the production

Operator

next the comes question Alba Morgan the line of And from De Carlos Stanley. with

Carlos de Alba

the that still Maximo, the official haven't question, a an U.S. the XX% exports I done that. deal? are on document Mexican U.S. is that tariff or really decision? the XX% feet Just is maybe the there talk negotiations not melted are officials Brazil, and that cold seen maybe official put it in final to a Because steel US that Or having is for subject and -- on on in into announcement. import The fact, And the exemption country.

Maximo Vedoya

Carlos, I it. of official. The think Mexico it's President announced

a proclamation know government formal So this. is I -- saying Mexican there then the if from and don't

is So, I official. it guess,

the when working that is happening announced has assumption. are they the came but this X to now, think I implemented. we XX%, think implementation that And -- happening Remember, what under I be weeks later. is it

Carlos de Alba

Or necessarily U.S. will the relevance to if Mexican see remarks, point something clearly that And is, would apparently, then, a be would And Would mentioned with prepared point. how on increasing -- is this signed shares? to it follow. hearing from term, that on in the U.S. can own that in on time? mean the the up CSN on officials Usiminas on evolution you that do not Usiminas, to court that you short of interested elaborate this topic bit forcing shares you little of steps? they fact is the but negotiate be in lawsuit in have that at Yes. decision further CSN going have I has guess. and Ternium's the is little one a Is anyway, monitor possibility? in What the think And I'm a because same there more I the Ternium business. And it But said, your a President acquire are you next the bit sell your that second what doesn't those CSN? Mexico that Usiminas the that. not is stake

Maximo Vedoya

the answer I'll -- first, letter, -- second the same Okay. question least. at Carlos Caio Carlos, sorry,

judicial week let the first that ongoing of question, no. status is part part process, a question the I mean, right say that second the is the this And and that process regarding the now, answer -- The following judicial me the of is this of CSN-Ternium weeks.

it's So I to be a going have prefer and of add not said, as -- that in things lot something honest, already said remarks ongoing, I of much there's I to more is on. what my I mean, because prepared

So to what initial in I my I Carlos. hope you said remarks, I understand. stick

Carlos de Alba

can sure. with shares? add that just the you And Usiminas for wouldn't part any Why If my would Ternium of second there, CSN be negotiate color first follow-up on more Yes, question. a then, great.

Pablo Brizzio

Carlos, is this Pablo.

know, all, Brazil is you are process as going on but that, is you in long. process of are this right, in Brazil, the First a

So we cannot count that this immediately. the will case be

position -- to it's to with that. So we say will what respect happen in any are we not not what and will do

So that it's at we do this nothing happening in moment. Brazil, but can it's

Operator

your of with Research. the Timna comes from Wolfe line And Tanners next question

Timna Tanners

much the does Mexico. really AHMSA third you about export doesn't opportunity talk it more to potentially Can like demand that as And with in declaring day, for that produce very at bankruptcy? the U.S.? from nicely, end indeed, a situation also, much Ternium quarter, Lazaro you of it's it busy matter little if pointed take seems you if to out imported bit the But opportunities Are much the you're any Regarding good with Cardenas isn't very share? pretty Brazilian slabs, all the interesting. the in seeing going any? to Mexico

Maximo Vedoya

course, a right, U.S. the Timna, nobody you to only we are remember, ones not of And to likes little taken but something have the are exporting away. bit

that in Brazil, countries, sense sorry, and poured the melted the the doesn't for Ternium, U.S. It's but both imports from sense. make -- and for export from volume the any a Mexico the U.S. when having clearly in maybe volume from U.S. Mexico, Mexico the exports is, So, not -- as whole as the what the a more volume big to restriction is slabs it's from U.S. a volume Brazil, for important both to

the putting restriction, that's be, a any And the to make -- when small much to sense. U.S., Mexico, more from the may So our U.S. honest. position, as to that Mexico U.S. be the it as it exports from doesn't

our also. that volume customers and the right to all to we in fulfill our big, You're the U.S. need that Mexico compared sells it's not but that the domestic opportunities in market,

So that's part of first the the question.

-- don't honest, should Xth much not the be process. asked of very Nevertheless, long AHMSA a process. a for supposedly, I think press there's there think go where process process something a To is no it's going immediately. You the bankruptcy AHMSA. AHMSA about deadline in not easy we August, what's something to the of that I agreement. know to It's bankruptcy bankruptcy it's still was because The the be besides

Timna Tanners

it. Got

principle. fair a the about really That's So point. it's recognize more I

margin If Cardenas? starting price question. September, if about also talk fourth is the then, the second raw in could magnitude quarter the a is help And for because here opportunity with I'm with timing. to if And for I decreases? could, of on touch some the also cadence could material Just still you just to If the about the stabilize any pricing? to enough the that think Lazaro of U.S. you trying opportunity

Maximo Vedoya

Yes.

month prices months. fourth the through see bit little of week this a are following the increase because we yes, continue and the starting this to the quarter, should prices think that this I -- in the should and in improve

So $XXX the the say ], between of difficult be volatility normal said the and American $XXX it's I yes, increase, should to are in Timna. with the right magnitude we course, a [ region very now, that price North of accustomed to. always

to view. I -- that's I'm So, that, the increased. our fourth it's saying not is be yet, to quarter be going going in that But don't but

Pablo Brizzio

Okay. Timna, Pablo. this is

quarter. of You asked possibility in margins fourth relationship entering recoverability of the to the the into

As try be should at achieving certain this say, year, to took of semester the But the first still If there. run, in always of together are be long the XX%. always of could volatility level the level we margin. we we we

So of clearly, because said. confirmed that third reflected if that costs in are a higher quarter see and than with that all are should recover our and some the have things Maximo need a the increased, will to during in we we level the reduction to we we prices Out together methodology what we what the the third reduction will see quarter. during And fourth mentioned you the that quarter of margins we -- because First see In or First - utilized, these

position to of are us year chance level recover in reasonable if margins. very after should So yes, we have the the correct, all we effects, a these at full

Maximo Vedoya

important them half let something melted U.S. something some exports not slabs very Timna, so of million which sound comes to as don't to around I that with let X.X -- add want for semi-finished not in volume X.X products, It's X.X a million, exports different yes, is US in not of that million, me problem -- me products, Brazil. that like it's that, from flat is million. huge Ternium. put poured. because than U.S. from flat like of products, something price, parts, a but this more and more Mexico or and poured, X melted of this volume, finishing what Of the -- whole, Mexico the Mexico come and tons from

any have to make before it said, I as the this sense said numbers So restriction doesn't in, remarks. my I in

Operator

question your Goldman with Farid line the next And of from Marcio comes Sachs.

Marcio Farid Filho

question side. a demand have the on I

Shipments well. that both demand strong, is the buyers U.S. as and basically back declining that's You on the Mexico a is relatively price holding weak. for environment. obviously understanding My purchases in mentioned quite quarter were that in

right? with a risk. initial check of clients the buying, seeing to wanted talked flows, recovery well? And our about what Mexico U.S. taxation potential the interdependence seeing some already just these the lot moment, what signs lot kind But and more between U.S. at by end since you're -- next a Just the that you than on you've of back USMCA are is price into are for like trade risks risks the you you're should know U.S. does aggressive as around coming it already competitors kind But a of new U.S. and you that things. are are if secondly, potentially even seeing corner, and and is on please? I HRC the year, Mexico with price of suggestion the follow-up assessing one stabilization potential feel and a administration elections just

Maximo Vedoya

you, Marcio. Thank

Brazil ] Alberto, weeks because and from X of blast with Tornado port of with also reasons. have furnace. only less the demand, The first shipped external also shipments Brownsville we the a because [ yes, part we shipped different problem -- and than that lot we Part the a we of for Also but is also of the problems other Mexico for in in slab issues, because problems. what question, little the a some we Also, of the the have of the were not to pickup second quarter, had demand, bit Mexico. seeing because are should

had our shipments our seeing to of the are things, a that shipments because prices both that are this realizing, we because pickup go pickup up. and a So people stocks, of are in starting ones

you mentioned. are we seeing, things both as So

Mexico I my is who view U.S. same see the regardless to in and is U.S., Regarding be I -- mean, of going the government. USMCA, don't

I Canada is very U.S. U.S.. Mexico, as I X only think not the sides. see strong -- Mexico the a or benefited and it's U.S. countries, for relationship The X for excellent from a don't I have lot I -- one, mean, the the USMCA. USMCA see and agreement for both countries an for

about to evidence a only of you export XX%. services, this the But from U.S. this. Mexico the similar. some numbers advice, is Mexico there's which XXXX the in XX%, much also put so U.S. If XXXX, increased from by and you exports But give -- are to let export goods, me increased XX%. if not of U.S., but you by is also more, take both lot to

So from both a are lot countries benefiting that.

created You the the and of take top millions U.S., exports. the jobs -- destination of XX a USMCA one has U.S. lot -- U.S. of the states I of of don't Mexico know, the their in jobs evidence different states has the in of there's jobs the as

don't all is will I changing with that to the the So to somebody of cancelling or benefits and think U.S. the see USMCA Mexico bringing that this

can are others, sure, improve, there things but think for that we no. some I

some investment X XXXX, is in there. issue take Chinese the in in mentioned other last Mexico. that some numbers, years, direct The it's FDA very are you Chinese there in doubt the Mexico made the I didn't foreign as but the that in the you to are it's year, a China investing Mexico, not the Mexico and than I press, if the investment mention know, the But companies XXXX Chinese X% There they not reason of, of it, X less investment U.S. are USMCA. as put don't again, all in putting of But

So are it's the numbers very, but are very some insignificant. coming, small. there Yes, companies

on much I for an think, other bottom the lot there's against steel, bigger tough direct but investment products. the countries. laws in of trade, of U.S. only not Again, invasion have foreign X countries, more here we a it's is, unfair the mutual yes, that. anything And also to, China the from make numbers. receiving not But X is and line So

that work make together to to possible. have We

Operator

Citi. comes And of the line Hacking your Alex with question from next

Alexander Hacking

just I to quarter? to fundamental more you at was be Is And even to ask provision, and correct I that guess, wanted that look that's that's quarter? And not loss. financial profitability there in FX When quickly operating am something third loss reporting I statements just Siderar? the would an is on operating Or the happened how an see would second the I evolving in accounting? there right? So, for an there including seem loss, that the operating seem be underlying they the quarter, Siderar. at

Maximo Vedoya

is Pablo, quarter low. elaborate of a quarter are you kind then bit quarter time. the -- very a second level were of main quarter first Alex, issue issue second more. -- long where It's a was almost X. Yes, that and correct. the The and main the we lowest little volumes But Remember, Argentina the were Ternium in

the But market elaborate if don't economy the more. little now We or Argentine Pablo, of know, to in volumes market. situation you whole bit a due an I the to want increase are seeing of the

Pablo Brizzio

best a You're because not right. Alex, not First First totally quarter. explained, quarter year, to It methodology together before, - the -- Again, we same as should for Maximo what discussed had we -- Out In also some sum a end, see all Argentina the Ternium we due for cost we only impacted different result. very in increase we in then fourth unfortunately right. -- the you're the quarter the the at was that the up

see expecting higher should reduction quarters. coming are quarters. in to during the We coming see the We in also some volumes cost

So during that the should third saw the situation reversed you clearly be the quarter. fourth quarter second during the and

Alexander Hacking

Okay. since It was for That's caught my the calculation, eye XXXX. because it in my just worst model quarter [indiscernible] clear. some

Operator

question next from line Leo with of Pactual. your the Correa And BTG comes

Leonardo Correa

increasing of dividend you, but Ternium and situation here, help ones. how CapEx you dividend been the this We're know right, [Technical has program the exactly high guys bit Difficulty] mean Mexico. I don't there's forward, still now couple going bit Pablo, with the consistently for given have CSN somewhat a A years. this the details you more -- litigation. still We hopefully, projects past can [Technical a of ends. Difficulty] over quick And messy in situation,

know that going if decision, you predict is I of you Board are forward. just there's course, I provisions, and these management, on uncertainty, you a dividend this a Of double to right? how the know you check increasing conservative your great but level to how wanted have you're So, on check never balance there's sheet that. I risk a guys double to consequence, as guys arguments, guys reevaluate any but imagine can wanted given just And high anyway, just things.

about been changes [indiscernible] is Second over prices lot Clearly, call. anytime soon. a in anything this steel the China talking sure we've situation culprit. point, Not

has the obviously collapsed Looking to close at Difficulty], slabs [Technical $XXX. price

curious this bit Is Just how you to how these that. plant to on how breakeven in does levels? Ternium CSA you more -- wanted you What on flat Just plants, a environment? it hear generating? hear type can are at of -- the or does economics Brasil how operate

Pablo Brizzio

Leo, Pablo here.

me couple in start me the the to reason you things no Let -- have we bit with And let what We mentioned dividends. question the see question. a little And a regarding that. on first expand of change in dividend. to relationship doing your been

have have. The company net will position positive the this cash CapEx total very that the quarter very cash during even a minor free cash of the to flow semester, so plan generate We we affected, in the to first was is change that of in continues a dividend this not the continue on very was company And track. the level the online, numbers in much during that we record and that the paid though also, reflected semester. reduction

quarters, we second no take us and a the the you up to change continue to really in what one. been reason and was have of again, pricing in position could So will do, was And something We there see what said been we've dividend and with that discussing to results, that. so margins that ]. shouldn't together anything to because we're expected we recoverability can increased before nothing that now volumes to what change relationship with we be in put [ in the payments. Maximo, then, doing that -- there the coming there doing on

Maximo Vedoya

is first especially remember, is slabs. situation greater. Yes. of all, plus the buyer Ternium of a Ternium slabs, Leo, net Usiminas of prices, even

a Mexico So it's this, Ternium bad sells, can -- either either Usiminas own of the Argentina. companies, slabs. thing, Brasil you Ternium prices say mean, I or not sends our Ternium either everything if to or

a the So Ternium we in Brasil. are production not of seeing problem

of work you slabs. a level net buyer this Ternium know, Brasil very as at so a again, As for are it prices. whole, we of is can But Ternium efficient,

Operator

your the question line And from comes Rodolfo of Angele. next

Rodolfo De Angele

the Just mentioned next overall of call in EBITDA quarter. North But wanted to release, in things America. in confirm you be in was that bottoming, message the should weaker getting into the terms better are that prices the guidance outlook from the

this you with of bit a That's timing just there's wonder know a more a I but bit difference, So I all. if comment details. on could

Maximo Vedoya

yes, message Well, yes, the you're I -- Rodolfo, start Pablo, but and then right.

that Prices the spot in the the -- the Mexico, quarter but quarter especially just for the lag we one Next is the prices, prices, contract of outlook decrease, not recalled. in the prices. the next because gave should you contract contract prices;

from bit So are an that bottom are But second from sorry bit a down. EBITDA regarding overall in following the spot our June, quarter. the Brazil. we quarter, industrial seeing an and from little a have will little in an increase July and And Argentina this is price and overall, Volume prices, the this see higher, is to and increase the volume Overall, we in the decrease then the in a outlook bottom. -- going in because be the of probably July. prices, June Mexico, ones increase -- prices no, in in

Pablo Brizzio

Yes.

me Let -- it's Rodolfo, Pablo.

that that add past. purchased be to raw and in Let just will said the what Maximo the me be we certain the to see reflecting slabs level continuing material will cost also of purchased

are is a also than was that it's are the we Ternium, better also mentioned So down. what prices fourth when higher quarter are the cost why still reflect for It should only scenario that over reduction today. down. that going That's right a here not reflecting prices in also iron but mentioned price we that ore start are we going now, seeing Coal seeing increases we reflecting to seeing.

also are reducing raw materials prices So ]. [ for

fully usually, we always at during year-end. a more But and and a that quarter. the quarter This and fourth timing and a you year. yes, quarter in third the bottom yet look the longer see But could on and recovery the general, this prices, quarter to seeing of will entering We like period is difference into not because third for during than that. the have the lead cost lag we the next the clearly are could in fourth to the

Operator

to back no turn now the this CEO. will there further call time. And are questions I at over the

Maximo Vedoya

We welcome feedback and asked. you your We all thank any the may you Thank to have. appreciate you, all. you call this on questions participation and

thank nice So Bye-bye. have again, you day. a and

Operator

concludes conference today's And this call.

You may now disconnect.

Ternium (TX) 31 Jul 242024 Q2 Earnings call transcript