• Shipments: 16 million tons for 2024.
• Adjusted EBITDA: ARS 2 billion with a 12% margin.
• Cash Generation: ARS 2 billion in cash generated in 2024.
• Net Cash Position: ARS 1.6 billion at the end of December 2024.
• Capital Expenditures (CapEx): Close to ARS 2 billion in 2024.
• Dividends Paid: More than ARS 600 million in 2024.
• Net Income (Q4 2024): ARS 333 million.
• Net Sales Decline (Q4 2024): Sequential decline of 14%.
• Mining Shipments: Stable in Q4 2024, but down 9% year-over-year.
• Cash Flow from Operations (Q4 2024): Supported by a decrease in working capital.
• Proposed Annual Dividend: ARS 2.70, with a dividend yield of approximately 9%.

• Warning! GuruFocus has detected 5 Warning Signs with BUE:TXAR.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ternium Argentina SA reported shipments of 16 million tons for 2024 with an Adjusted EBITDA of ARS 2 billion, maintaining a 12% margin despite industry challenges.
• The company made significant progress on its downstream expansion project in Mexico, with new facilities starting operations and others on track for completion by the end of 2025.
• A new wind farm in Argentina began generating electricity, expected to deliver substantial economic benefits and support the company's decarbonization goals.
• Usiminas in Brazil showed operational improvements, with vehicle production growing by 10% and crude steel production reaching high levels.
• The Roberto Rocca Technical School in Santa Cruz, Brazil, began its first classes, reflecting Ternium's commitment to community development and education.

Negative Points

• Shipments in Mexico decreased due to a weaker commercial market and uncertainties surrounding trade actions.
• Argentina experienced a real decline in shipments by approximately 20% due to macroeconomic measures, with steel demand yet to return to historic levels.
• Imports of flat steel in Brazil exceeded 3 million tons, with China accounting for a significant portion, disrupting the local market.
• Adjusted EBITDA decreased due to lower prices and reduced shipments, partially offset by increased steel costs per ton.
• The Brazilian Real's depreciation against the US dollar negatively impacted Usiminas' financial results, affecting Ternium's overall performance.

Q & A Highlights

Q: Can you provide more details on the outlook for the first quarter of 2025 and the ramp-up of the Pesqueria project? A: (Maximo Vedoya, CEO) The finishing lines at Pesqueria are ahead of schedule and should reach full capacity in the next two to three months. The galvanized line is on track to start in December 2025, and the cold rolling line's startup has been advanced to December 2025. The ramp-up for these projects typically takes 9 to 12 months. (Pablo Brizzio, CFO) We expect a slight increase in Adjusted EBITDA for Q1 2025, driven by stable shipment levels, a decline in costs, and a marginal decrease in prices.

Q: Is Ternium considering increasing its stake in Usiminas, and what are the next priorities for the company? A: (Maximo Vedoya, CEO) Both Ternium and Nippon Steel have options to buy or sell stakes in Usiminas starting July. We are pleased with Usiminas' performance and will focus on maximizing its potential. Priorities include improving the performance of Ternium's mill and addressing commercial challenges with imports from China.

Q: How is Ternium prepared to navigate potential trade tariffs, and will this affect new investments? A: (Maximo Vedoya, CEO) We are not planning to halt any investments. The Pesqueria project is crucial for substituting imports in the Mexican market. The steel shop project will strengthen Ternium's position as rules of origin become stricter. We are working with automotive customers to replace imports from Asia.

Q: What is your outlook on the impact of Chinese steel exports on your markets, and how are countries responding? A: (Maximo Vedoya, CEO) China's steel exports increased by 25% in 2024, creating challenges. Mexico is actively defending against unfair trade with anti-dumping measures. Brazil is working on more effective trade barriers, while Argentina is still stabilizing its macroeconomy but will likely address unfair trade soon.

Q: How do you view the US-Mexico trade policy on steel, and what are the implications of potential tariffs? A: (Maximo Vedoya, CEO) We export a small volume to the US, and Mexico has a significant steel trade deficit with the US. The focus should be on addressing trade with other countries. We expect a reasonable agreement between the US and Mexico, as both countries benefit from the USMCA.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.