Ternium S.A. - ADR

Financial Performance: Ternium reported an adjusted EBITDA of $368 million and a net income of $93 million for Q3 2024. The adjusted EBITDA declined compared to previous quarters, primarily due to lower realized steel prices despite increased shipments across all primary markets.

Market Outlook: - In Mexico, the steel market remains healthy with increased demand, especially in the automotive sector, anticipated to reach a record 4.2 million units in production by 2025. A slight decline in shipments is expected for Q4 due to seasonal trends. - Brazil showed a 9% year-over-year increase in steel consumption in the first nine months of 2024, but a 20% rise in flat steel imports, primarily from China, poses challenges. The Brazilian government has implemented measures to safeguard against unfair trade but needs to close loopholes in the quota system. - Argentina is seeing a recovery in steel demand, yet there is a risk of increased imports that could undermine this progress.

CapEx and Growth Projects: Ternium’s capital expenditures are expected to range between $1.7 billion and $1.8 billion in 2024, focused on expansion projects in Pesquería, with an even higher CapEx estimate of $2.3 billion for 2025. This indicates a strong commitment to growth despite lower immediate cash flows.