Ternium (TX) Q4 2024 earnings summary

Executive summary

• 2024 shipments reached 16 million tons, with adjusted EBITDA of $2.04 billion and a 12% margin, despite a challenging steel market environment.

• Net cash position at year-end was $1.6 billion, after nearly $2 billion in CapEx and over $600 million in dividends paid.

• Downstream expansion in Mexico advanced, with new pickling and finishing lines operational and further lines on track for completion by end-2025.

• Wind farm in Argentina began generating electricity, supporting decarbonization and reducing third-party power purchases.

• Q4 2024 saw net income of $333 million, including a $404 million provision reversal related to Usiminas litigation.

Financial highlights

• Adjusted EBITDA for 2024 was $2.04 billion with a 12% margin; Q4 adjusted EBITDA was $270 million, down 27% sequentially.

• Net income for Q4 was $333 million, including a $404 million provisional reversal; full year adjusted net income was $584 million.

• Q4 saw a sequential decline in adjusted EBITDA due to lower realized prices and reduced shipments, partially offset by lower costs.

• Steel segment net sales declined 14% sequentially in Q4, driven by lower shipments and prices; mining segment margins improved on lower costs.

• Full year cash from operations reached $1.9 billion; capex was $1.9 billion, mainly for Mexico expansion and the new wind farm.

Outlook and guidance

• Q1 2025 is expected to see a small increase in adjusted EBITDA, with stable shipments and improved margins as cost reductions outpace price declines.

• CapEx is projected to peak at $2.5 billion in 2025.

• Shipments in Brazil are expected to increase in Q1 2025, while Mexico and Argentina remain stable.

• Dividend proposal of $2.70 per ADS for 2024, with a 9% yield; $0.90 already paid, $1.80 pending shareholder approval.

• Ramp-up of new finishing lines in Mexico and full operation of the new wind farm in Argentina are expected to support future performance.