Ternium’s Fourth Quarter and Full-Year 2024 Results: Navigating Challenges and Steady Growth
On February 18, 2025, Ternium S.A. (NYSE: TX) announced its financial and operational results for the fourth quarter and full year ended December 31, 2024. The company’s figures, based on International Financial Reporting Standards, reflected a challenging market environment but highlighted steady growth in steel shipments, especially for industrial customers. Below are the key financial insights and performance metrics for Ternium’s operations in Q4 and FY 2024.
Fourth Quarter 2024 Highlights:
• Steel Products Shipments: Ternium shipped 3.8 million tons of steel products in Q4, a 9% decline compared to Q3 2024 and a 7% decrease from Q4 2023.
• Mining Products Shipments: Shipments of mining products stood at 1.7 million tons, marking a 3% decline from Q3 2024 and a 12% drop compared to Q4 2023.
• Net Sales: Total sales for the quarter amounted to $3.88 billion, a 13% decrease from the previous quarter and a 21% drop compared to Q4 2023.
• Adjusted EBITDA: Ternium’s Adjusted EBITDA dropped 27% to $270 million, reflecting lower shipments and steel price declines.
• Adjusted Net Loss: The company posted an Adjusted Net Loss of $71 million in Q4, compared to a profit of $554 million in Q4 2023.
• Net Income: Ternium reported a net income of $333 million in Q4, largely due to a $404 million provision reversal for ongoing litigation related to the 2012 acquisition of a stake in Usiminas.
• Earnings Per ADS: Earnings per American Depositary Share were $1.43 for Q4 2024, down from $2.11 in Q4 2023.
Full-Year 2024 Performance:
• Steel Products Shipments: Total shipments for the year amounted to 15.6 million tons, an increase of 10% over 2023.
• Mining Products Shipments: Mining product shipments surged by 56%, reaching 6.4 million tons.
• Net Sales: Full-year net sales remained stable at $17.6 billion, virtually unchanged from 2023.
• Adjusted EBITDA: The company reported a 26% decline in Adjusted EBITDA to $2.04 billion, mainly driven by lower steel prices and a softening market.
• Net Income: Ternium’s net income for the full year stood at $174 million, significantly lower than $986 million in 2023.
• Adjusted Net Income: Excluding provisions, Adjusted Net Income for the year totaled $584 million, down from $2.1 billion in 2023.
• Capital Expenditures (CapEx): Ternium invested $1.9 billion in 2024, focusing on its Pesquería industrial center in Mexico and the development of a new wind farm in Argentina.
• Dividends and Cash Flow: The company paid out $609 million in dividends and ended the year with a solid net cash position of $1.6 billion.
Market Trends and Regional Insights:
• Mexico: The steel market faced a downturn in Q4 due to year-end seasonality and a weakened commercial market. However, the industrial market remained strong, helping to offset the weaker commercial performance.
• Brazil: The Brazilian market softened in Q4 due to seasonal demand but experienced growth throughout the year, bolstered by local steel demand and Ternium’s consolidation of Usiminas starting in July 2023.
• Argentina: In Argentina, Ternium faced a 20% decline in steel shipments for the year, largely due to economic stabilization measures and the associated impact on steel consumption in Q1.
• U.S. and Other Markets: The company saw improved steel shipments in markets outside of Mexico and Brazil, though Q4 shipments in the U.S. were weaker.
Steel Prices and Cost Trends:
• Steel Prices: Ternium’s realized steel prices dropped by $116 per ton compared to 2023, influenced by weaker market conditions and declining demand.
• Steel Cost per Ton: Although steel prices fell, the company’s steel cost per ton decreased as well, but the decline lagged behind the reduction in raw material and slab prices due to the consumption of previously purchased higher-priced inventories.
Provisions and Litigation:
• Ternium faced a $410 million net provision for litigation related to its stake acquisition in Usiminas. This resulted in a significant financial adjustment, though the company benefited from a $404 million provision reversal in Q4 2024.
Key Takeaways:
• Steel Shipments: Ternium shipped 3.8 million tons of steel products in Q4 2024, a 9% decrease from Q3 2024 and 7% lower than Q4 2023.
• Adjusted EBITDA: Q4 Adjusted EBITDA dropped to $270 million, a 27% decline from Q3 2024.
• Net Income: Ternium reported $333 million in net income for Q4, boosted by a $404 million litigation provision reversal.
• Annual Steel Shipments: Full-year steel shipments totaled 15.6 million tons, a 10% increase from the previous year.
• CapEx: Ternium invested $1.9 billion in 2024, focusing on expanding its Pesquería industrial center in Mexico and constructing a new wind farm in Argentina.
• Net Cash: The company ended 2024 with a net cash position of $1.6 billion, supported by strong operating cash flow.
• Adjusted Loss: Excluding provisions, Adjusted Net Loss was $71 million for Q4 2024, while full-year Adjusted Net Income was $584 million.
• Dividends: Ternium paid out $609 million in dividends to shareholders in 2024.
