The steel company, Terniumpresented his second quarterly report of the year. It was reported there a net loss of US$743 million. Analysts say that It was a bad quarter in operational terms but “worse than expected.”
Ignacio Sniechowski, Group Research Manager IEBreported on its networks that shipments fell 27% in volume compared to the second quarter of last year but increased 17% compared to the first quarter of this year.
“The gross margin fell by 11% and the operating margin was negative. A loss of US$3 billion in operating results. With low production levels and high costs, it was obvious,” he added.
The net result is a loss of US$156 billion or US$0.03 per share ($30.54).Normalizing the result (i.e. removing the effect of said provision) the net result ends up with a profit of US$55 billion,” he explained.
Finally, he analyzed: “At the valuation level, it continues to trade below book value 0.92x. With a cash flow that represents 29% of the market cap at today’s close. Conclusion: a bad quarter for Ternium, in operational terms perhaps worse than expected (even discounting the contingency for Usiminas)”.
According to the company’s own statement, in Mexico, Steel demand from automakers continued to grow during the second quarterbut Activity in the Mexican commercial steel market was negatively affected by a downward trend in steel prices. Additionally, customer demand in the appliance and HVAC sectors softened in the period, reflecting a relatively sluggish construction market in North America amid high interest rates.
In Brazil, steel demand picked up in the second quarter, particularly in the automotive and industrial sectors. However, Imports of steel products remained elevated, with a significant year-on-year expansion in the first half of 2024.
In the Southern Region, steel demand in the second quarter reflected an improvement in Argentine market conditions, as Demand from industrial customers and the commercial market showed a gradual recovery.
What’s coming
Ternium expects a sequential decline in adjusted EBITDA for the third quarter of 2024mainly attributed to reduced margins partially offset by an increase in shipments in key markets, they officially explained.
The company anticipates a decline in realized steel prices, largely as a result of the reset of quarterly and semi-annual contract prices in Mexico.
The company expects steady demand in Mexico’s industrial and commercial markets, with supply chain inventories at manageable levels..
“The automotive industry continues to grow and the construction sector is enjoying an uptick in investment from nearshoring activities, leading to the establishment of new factories and an increasing need for warehousing and logistics facilities,” they said.
In Brazil, Ternium anticipated a modest increase in shipments, supported by projected growth in the automotive industry and improved activity in the construction sectorOn the other hand, despite the recent establishment of a quota system to regulate steel imports into the country, imports during the second quarter remained high.
In Argentina, Ternium expects shipments to increase in the third quarter of 2024 following a shortage in supplies in the second quarter, although the pace of recovery remains uncertain.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
