San Nicolas De Los Garsas, Mexico
San Nicolas De Los Garsas, Mexico

Ternium is a manufacturer of flat and long steel products with production centers in Argentina, Mexico, Guatemala, Colombia and the United States. It is the leading steel company in Latin America with highly integrated processes to manufacture steel and value-added products. Wikipedia.

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News Article | May 1, 2017
Site: www.businesswire.com

LUXEMBOURG--(BUSINESS WIRE)--Ternium S.A. (NYSE:TX), announces that it has filed its annual report on Form 20-F for the year ended December 31, 2016 with the U.S. Securities and Exchange Commission (SEC). The annual report can be downloaded from the SEC website at www.sec.gov and from Ternium’s website at http://www.ternium.com/irhome. Holders of Ternium’s shares and ADSs, and any other interested parties, may request a hard copy of the annual report, free of charge, through our website at http://www.ternium.com/contacts. Ternium is a leading steel producer in Latin America, with an annual production capacity of approximately 11.0 million tons of finished steel products. The company manufactures and processes a broad range of value-added steel products for customers active in the construction, automotive, home appliances, capital goods, container, food and energy industries. With production facilities located in Mexico, Argentina, Colombia, the southern United States and Guatemala, Ternium serves markets in the Americas through its integrated manufacturing system and extensive distribution network. In addition, Ternium participates in the control group of Usiminas, a leading steel company in the Brazilian steel market, and has agreed to acquire CSA Siderúrgica do Atlântico, a Brazilian manufacturer of steel slabs. More information about Ternium is available at www.ternium.com.


News Article | April 27, 2017
Site: www.marketwired.com

The financial and operational information contained in this press release is based on unaudited consolidated condensed interim financial statements presented in U.S. dollars and prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board and adopted by the European Union, or IFRS; Additionally, this press release includes non-IFRS alternative performance measures i.e., EBITDA, Net cash / debt and Free Cash Flow; See exhibit I for more details on these alternative performance measures LUXEMBOURG--(Marketwired - Apr 26, 2017) - Tenaris S.A. ( : TS) ( : TS) ( : TS) ( : TEN) ("Tenaris") today announced its results for the quarter ended March 31, 2017 in comparison with its results for the quarter ended March 31, 2016. *EBITDA includes severance charges of $9 million in Q1 2017, $8 million in Q4 2016 and $13 million in Q1 2016. If these charges were not included EBITDA would have been $207 million (18%) in Q1 2017, $180 million (17%) in Q4 2016,and $204 million (17%) in Q1 2016. Our sales rose 10% quarter on quarter reflecting a strong increase in demand in USA and Canada, partially offset by lower sales in the Middle East and Africa. Our EBITDA continues to recover from the low point reached in the second quarter of last year and our net income benefited from an after tax gain of $92 million from the sale of Republic Conduit and a positive income tax charge. Net cash provided by operations was $26 million, with an increase in working capital of $105 million reflecting higher inventories and receivables. Capital expenditures amounted to $139 million and our net cash position (cash, other current investments and fixed income investments held to maturity less total borrowings) rose to $1.6 billion, including the $328 million we collected from the sale of Republic Conduit. Four months into 2017, the recovery in shale drilling in the USA and Canada has been impressive. With oil and gas prices remaining rangebound ($50-55/bbl, $3.00-3.30/million BTU), however, we expect the pace of the recovery will slow down. In the rest of the world, signs of recovery are more scarce, as oil and gas companies focus on strengthening cash flow and their financial position. In Latin America, drilling activity has been recovering from a very low base and, in Argentina various operators have announced investments in the Vaca Muerta shale play. We estimate that global demand for OCTG products in 2017 will increase in the range of 35-40% with respect to 2016. The demand increase is concentrated in USA and Canada, where we have been implementing our Rig Direct™ program, reopening our Canadian mills and starting up the heat treatment and threading facilities of our new mill in Bay City, Texas. Our sales and EBITDA in the second quarter should be in line with those of this first quarter as further increases in sales in the USA are counterbalanced by seasonal effects in Canada and a lower quarterly level of shipments to the Middle East. In the second half of the year, sales should increase driven by higher demand from Rig Direct™ customers in North America and Argentina and line pipe shipments to Eastern Mediterranean offshore gas projects in the fourth quarter. Our EBITDA should also increase with margins improving based on a better absorption of fixed costs. Although pricing conditions are improving, particularly in North America, average revenue per ton will continue to be held back by a changing regional mix and the prices in our Eastern Hemisphere backlog. Net sales of tubular products and services increased 10% sequentially but declined 4% year on year. In North America sales increased 42% sequentially, reflecting an increase in drilling activity in the United States and Canada. In South America sales declined 4% due to lower demand for OCTG and line pipe in Argentina partially offset by higher shipments of connectors in Brazil and higher OCTG demand in Colombia. In Europe sales increased 7% as demand for mechanical pipe and line pipe for power generation and hydrocarbon processing industry remained stable while higher sales of OCTG in North Sea were partially offset by lower sales elsewhere. In the Middle East and Africa sales declined 17% as shipments for Zohr phase 1 were completed in January and we had a low level of demand in sub-Saharan Africa. In Asia Pacific sales increased 20% due to Rig Direct sales to Chevron in Thailand at full regimen but demand in the rest of the region continues to be low. Operating income from tubular products and services amounted to $31 million in the first quarter of 2017, compared to $5 million in the previous quarter and $21 million in the first quarter of 2016. The sequential increase is a result of an improvement in the margin; while average selling prices remained stable, we were able to reduce our costs due to a better absorption of fixed costs on higher volumes. Net sales of other products and services increased 9% sequentially but declined 10% year on year. The sequential increase in sales and operating income is due to increased revenues of sucker rods, coiled tubing and excess energy. Selling, general and administrative expenses, or SG&A, amounted to $294 million, or 25.5% of net sales, in the first quarter of 2017, compared to $280 million, 26.8% in the previous quarter and $279 million, 23.1% in the first quarter of 2016. Sequentially, SG&A declined as a percentage of sales due to a better absorption of fixed costs on higher sales and lower provisions for contingencies. Financial results amounted to a loss of $4 million in the first quarter of 2017, compared to a gain of $23 million in the previous quarter and a loss of $15 million in the first quarter of 2016, mainly explained by the negative impact from Euro appreciation against the U.S. dollar on Euro denominated intercompany liabilities in subsidiaries with functional currency U.S. dollar. These results are to a large extent offset in equity, in the currency translation adjustment reserve. Equity in earnings of non-consolidated companies generated a gain of $35 million in the first quarter of 2017, compared to a gain of $15 million in the previous quarter and a gain of $12 million the first quarter of 2016. These results are mainly derived from our equity investment in Ternium ( : TX) and Usiminas (BSP: USIM). Income tax amounted to a gain of $47 million in the first quarter of 2017, primarily reflecting the effect of the Mexican and Argentine peso revaluation on the tax base used to calculate deferred taxes at our Mexican and Argentine subsidiaries which have the U.S. dollar as their functional currency. This result offsets to a large extent the income tax charge for the same concept that was generated in the previous quarter due to a devaluation of the Mexican and Argentine peso. Results for discontinued operations amounted to $92 million in the first quarter of 2017, reflecting the after tax result of the sale of Republic Conduit, which was closed in January 2017. Results attributable to non-controlling interests amounted to zero in the first quarter of 2017, compared to a $9 million loss in the previous quarter and a gain of $10 million attributable to non-controlling interests in the first quarter of 2016. These results are mainly originated at our subsidiray in Japan, NKKTubes and at our pipe coating subsidiary in Nigeria. Net cash provided by operations during the first quarter of 2017 was $26 million, compared to $309 million in the first quarter of 2016 and $79 million used in the previous quarter. Capital expenditures amounted to $139 million for the first quarter of 2017, compared to $158 million in the previous quarter and $230 million in the first quarter of 2016. At the end of the quarter, our net cash position (cash, other current investments and fixed income investments held to maturity less total borrowings) amounted to $1.6 billion, compared to $1.4 billion at the beginning of the year, as in January 2017 we collected $328 million from the sale of Republic Conduit. Tenaris will hold a conference call to discuss the above reported results, on April 28, 2017, at 10:00 a.m. (Eastern Time). Following a brief summary, the conference call will be opened to questions. To access the conference call dial in +1 877 730 0732 within North America or +1 530 379.4676 Internationally. The access number is " 9094268". Please dial in 10 minutes before the scheduled start time. The conference call will be also available by webcast at www.tenaris.com/investors. A replay of the conference call will be available on our webpage http://ir.tenaris.com/ or by phone from 1.00 pm ET on April 28th, through 11.59 pm on May 6th, 2017. To access the replay by phone, please dial 855 859 2056 or 404 537 3406 and enter passcode "9094268" when prompted. Some of the statements contained in this press release are "forward-looking statements". Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to future oil and gas prices and their impact on investment programs by oil and gas companies. EBITDA provides an analysis of the operating results excluding depreciation and amortization and impairments, as they are non-cash variables which can vary substantially from company to company depending on accounting policies and the accounting value of the assets. EBITDA is an approximation to pre-tax operating cash flow and reflects cash generation before working capital variation. EBITDA is widely used by investors when evaluating businesses (multiples valuation), as well as by rating agencies and creditors to evaluate the level of debt, comparing EBITDA with net debt. EBITDA is calculated in the following manner: This is the net balance of cash and cash equivalents, other current investments and fixed income investments held to maturity less total borrowings. It provides a summary of the financial solvency and liquidity of the company. Net cash / (debt) is widely used by investors and rating agencies and creditors to assess the company's leverage, financial strength, flexibility and risks. Net cash/debt is calculated in the following manner: Net cash= Cash and cash equivalents + Other investments (Current) + Fixed income investments held to maturity - Borrowings (Current and Non-current). Free cash flow is a measure of financial performance, calculated as operating cash flow less capital expenditures. FCF represents the cash that a company is able to generate after spending the money required to maintain or expand its asset base. Free cash flow is calculated in the following manner: Free cash flow = Net cash (used in) provided by operating activities - Capital expenditures.


News Article | August 1, 2017
Site: globenewswire.com

LUXEMBOURG, Aug. 01, 2017 (GLOBE NEWSWIRE) -- Ternium S.A. (NYSE:TX) today announced its results for the second quarter and first half ended June 30, 2017. The financial and operational information contained in this press release is based on Ternium S.A.’s operational data and consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and presented in U.S. dollars (USD) and metric tons. Ternium’s operating income in the second quarter 2017 was USD392.8 million, a USD28.7 million increase compared to operating income in the first quarter 2017 due mainly to higher shipments. The company’s shipments were 166,000 tons higher compared to the first quarter 2017, as a result of a 57,000-ton increase in Mexico, a 54,000-ton increase in the Southern Region and a 54,000-ton increase in Other Markets. Operating margin4 was relatively stable, with a USD33 increase in steel revenue per ton, mainly due to higher realized prices in Mexico, mostly offset by an increase in operating cost per ton5 mainly related to higher raw material and purchased slab costs. Compared to the second quarter 2016, the company’s operating income in the second quarter 2017 increased USD99.3 million, with higher operating margin and slightly higher shipments. Operating margin in the second quarter 2017 increased year-over-year principally due to USD142 higher steel revenue per ton partially offset by USD100 higher steel operating cost per ton. Steel revenue per ton increased as a result of higher realized prices in all of Ternium’s markets. The increase in operating cost per ton was mainly related to higher raw material and purchased slab costs. Shipments were 33,000 tons higher compared to the second quarter 2016, mainly as a result of a 50,000-ton increase in the Southern Region and a 16,000-ton increase in Other Markets, partially offset by a 34,000-ton decrease in Mexico. The company’s net income in the second quarter 2017 was USD281.8 million, compared to USD310.4 million in the first quarter 2017. The USD28.6 million decrease in net income was mainly due to higher net financial expenses and an increase in the effective tax rate, partially offset by the above mentioned higher operating income. The effective tax rate in the first and second quarters of 2017 was significantly reduced by the non-cash effect on deferred taxes of the appreciation of the Mexican peso against the US dollar, of 10% and 5%, respectively. Relative to the prior-year-period, net income in the second quarter 2017 increased USD107.5 million mainly due to higher operating income and a decrease in effective tax rate, partially offset by higher net financial expenses. Net income in the second quarter 2017 included a net foreign exchange loss of USD37.5 million, compared to a gain of USD19.8 in the same quarter in 2016.  The net foreign exchange loss in the second quarter 2017 was mainly due to the non-cash negative impact of the Argentine peso’s 7% depreciation against the U.S. dollar on Siderar’s U.S. dollar financial position, which is offset by changes in Ternium’s net equity position in the currency translation adjustments line, and to the negative impact of the Mexican peso’s 5% appreciation against the U.S. dollar on a net short local currency position in Ternium’s Mexican subsidiaries. Operating income in the first half 2017 was USD757.0 million, a USD261.1 million increase compared to operating income in the first half 2016 due to higher operating margin and slightly higher shipments. Operating margin increased, mainly reflecting USD143 higher steel revenue per ton partially offset by USD94 higher steel operating cost per ton. Steel revenue per ton increased as a result of higher prices in all of Ternium’s steel markets. The increase in operating cost per ton was mainly due to higher raw material and purchased slab costs. Shipments were 77,000 tons higher compared to the first half 2016, mainly as a result of a 36,000-ton increase in the Southern Region, a 33,000-ton increase in Mexico and an 8,000-ton increase in Other Markets. Net income in the first half 2017 was USD592.2 million, compared to net income of USD297.8 million in the first half 2016. The USD294.3 million increase in the year-over-year comparison was mainly due to higher operating income and a lower effective tax rate, partially offset by higher net financial expenses, which included a USD79.9 million negative year-over-year difference in net foreign exchange results mainly related to the effect of the fluctuations of the Mexican peso against the U.S. dollar on a net short local currency position in Ternium’s Mexican subsidiaries. Steel market fundamentals in the North American region remain healthy, with steady end-user demand, adequate steel inventory levels and a higher than 75% capacity utilization rate. Ternium expects these factors to be supportive for steel prices in the region. At the same time, China’s steel domestic demand and production levels continue growing. In addition, finished steel imports in the U.S. are reaching 30% of the steel market. Many of these imports are being made under unfair terms, and the company is confident the governments in the region will continue working toward achieving a level playing field for the steel industry. In Argentina, signals of recovery in many sectors of the economy point to a strong second half of the year, and as a result GDP in the country could grow more than 2.5% in 2017. Good operating conditions in the agribusiness industry, a pick-up in public infrastructure investment and the gradual deployment of resources for the development of shale oil and gas fields by local and international oil companies are fostering an increase in steel demand. The company believes these developments could support a 10% growth in flat steel consumption in Argentina in 2017. Ternium expects a sequential decrease of operating income in the third quarter 2017 compared to the second quarter 2017, as a result of lower shipments and operating margin. Following record steel shipments in the second quarter 2017, the company anticipates lower volumes in the third quarter 2017 as a result of a seasonal decrease in Mexico, especially in the automotive and HVAC industries, partially offset by an increase in Argentina. Ternium expects slightly lower revenue per ton in the third quarter 2017 compared to the second quarter 2017 mainly as a result of lower realized prices in Mexico in connection with the usual lag effect of regular price resets contained in industrial customer sales contracts, and higher operating cost per ton due to higher purchased slab and raw material costs. Net gain attributable to Ternium’s equity owners in the second quarter 2017 was USD249.7 million, compared to net gain attributable to Ternium’s equity owners of USD154.0 million in the second quarter 2016. Including non-controlling interest, net gain for the second quarter 2017 was USD281.8 million, compared to net gain of USD174.3 million in the second quarter 2016. Earnings per ADS in the second quarter 2017 were USD1.27, compared to earnings per ADS of USD0.78 in the second quarter 2016. Net sales in the second quarter 2017 were USD2.3 billion, or 21% higher than net sales in the second quarter 2016. The following table outlines Ternium’s consolidated net sales for the second quarter 2017 and the second quarter 2016: Cost of sales was USD1.7 billion in the second quarter 2017, an increase of USD278.4 million compared to the second quarter 2016. This was principally due to a USD263.5 million, or 26%, increase in raw material and consumables used, mainly reflecting higher iron ore, coking coal, scrap, and purchased slabs costs, and a 1% increase in steel shipments volume; and to a USD14.9 million increase in other costs, mainly including a USD21.7 million increase in labor cost, a USD6.3 million increase in depreciation of property, plant and equipment and a USD3.1 million increase in services and fees, partially offset by a USD16.1 million decrease in maintenance expenses. Selling, General & Administrative (SG&A) expenses in the second quarter 2017 were USD189.0 million, or 8.4% of net sales, an increase of USD9.0 million compared to SG&A expenses in the second quarter 2016, mainly due to higher labor costs and services and fees expenses, partially offset by lower taxes and contributions (other than income tax). Other net operating expense in the second quarter 2017 was a USD12.6 million loss, compared to a USD0.4 million gain in the second quarter 2016. Other net operating expense in the second quarter 2017 included a USD15.9 million donation related to the Roberto Rocca technical school in Pesquería, Nuevo León, Mexico. Operating income in the second quarter 2017 was USD392.8 million, or 17.4% of net sales, compared to operating income of USD293.5 million, or 15.8% of net sales, in the second quarter 2016. The following table outlines Ternium’s operating income by segment for the second quarter 2017 and second quarter 2016: The steel segment’s operating income was USD398.5 million in the second quarter 2017, an increase of USD102.6 million compared to the second quarter 2016, reflecting higher net sales, partially offset by higher operating cost. Net sales of steel products in the second quarter 2017 increased 22% compared to the second quarter 2016, reflecting a 20% higher revenue per ton and a 33,000-ton increase in shipments. The USD142 increase in revenue per ton reflected higher steel prices in all of Ternium’s steel markets. Total shipments remained relatively stable in the second quarter 2017 year-over-year mainly due to higher volumes in the Southern Region and in Other Markets, partially offset by lower shipments in Mexico. Operating cost increased 18% in the second quarter 2017, due to a 17% increase in cost per ton and the above mentioned 1% increase in shipments. The increase in cost per ton year-over-year was mainly the result of higher purchased slab and raw material costs. The mining segment’s operating income was a loss of USD0.9 million in the second quarter 2017, compared to a loss of USD2.1 million in the second quarter 2016, mainly reflecting higher iron ore sales partially offset by higher operating cost. Mining products net sales in the second quarter 2017 increased USD7.1 million, mainly as a result of higher shipments and higher revenue per ton. Shipments were 875,000 tons, 8% higher than in the second quarter 2016. Operating cost increased 12% year-over-year, mainly due to the above mentioned 8% increase in shipment volumes and a 3% increase in operating cost per ton. EBITDA in the second quarter 2017 was USD497.9 million, or 22.0% of net sales, compared to USD392.8 million, or 21.1% of net sales, in the second quarter 2016. Net financial results were a USD67.1 million loss in the second quarter 2017, compared to a USD0.2 million loss in the second quarter 2016. During the second quarter 2017, Ternium’s net financial interest results totaled a loss of USD19.6 million, compared to a loss of USD19.8 million in the second quarter 2016. Net foreign exchange results were a loss of USD37.5 million in the second quarter 2017 compared to a gain of USD19.8 million in the second quarter 2016. The second quarter 2017 loss was mainly due to the negative impact of the Mexican peso’s 5% appreciation against the U.S. dollar on a net short local currency position in Ternium’s Mexican subsidiaries, and the Argentine peso’s 7% depreciation against the U.S. dollar on Ternium’s Argentine subsidiary Siderar’s U.S. dollar financial position (which uses the Argentine peso as its functional currency). The second quarter 2016 gain was mainly due to the positive impact of the Mexican peso’s 8% depreciation against the U.S. dollar. Change in fair value of financial instruments included in net financial results was a USD9.8 million loss in the second quarter 2017 compared to a USD0.4 million gain in the second quarter 2016. The loss in the second quarter 2017 was mainly related to certain derivative instruments entered into to compensate for the interest rate charges derived from Ternium’s Argentine subsidiary Siderar’s Argentine peso denominated financial debt. Equity in results of non-consolidated companies was a gain of USD15.2 million in the second quarter 2017, compared to a gain of USD4.9 million in the second quarter 2016, mainly due to better results from Ternium’s investment in Usiminas. Income tax expense in the second quarter 2017 was USD59.1 million, or 17% of income before income tax expense, compared to an income tax expense of USD124.0 million in the second quarter 2016, or 42% of income before income tax expense. Effective tax rate in the second quarter 2017 included a non-cash gain on deferred taxes due to the 5% appreciation of the Mexican peso against the U.S. dollar during the period, which increases, in U.S. dollar terms, the tax base used to calculate deferred tax at our Mexican subsidiaries (which have the U.S dollar as their functional currency). Effective tax rate in the second quarter 2016 included a non-cash charge on deferred taxes due to the 8% depreciation of the Mexican peso against the U.S. dollar during that period. Net gain attributable to non-controlling interest in the second quarter 2017 was USD32.1 million, compared to net gain of USD20.3 million in the same period in 2016. Net income attributable to Ternium’s equity owners in the first half 2017 was USD511.0 million, compared to a net income attributable to Ternium’s equity owners of USD248.4 million in the first half 2016. Including non-controlling interest, net income for the first half 2017 was USD592.2 million, compared to net income of USD297.8 million in the first half 2016. Earnings per ADS in the first half 2017 were USD2.60, compared to earnings of USD1.27 in the first half 2016. Net sales in the first half 2017 were USD4.3 billion, 22% higher than net sales in the first half 2016. The following table outlines Ternium’s consolidated net sales for the first half 2017 and the first half 2016: Cost of sales was USD3.2 billion in the first half 2017, an increase of USD488.1 million compared to the first half 2016. This was principally due to a USD453.2 million, or 23%, increase in raw material and consumables used, mainly reflecting higher iron ore, coking coal, scrap, energy and purchased slab costs and a 2% increase in steel shipments volume; and to a USD34.9 million increase in other costs, mainly including a USD39.3 million increase in labor cost, a USD5.5 million increase in depreciation of property, plant and equipment and a USD4.3 million increase in services and fees, partially offset by a USD15.4 million decrease in maintenance expenses. Selling, General & Administrative (SG&A) expenses in the first half 2017 were USD361.3 million, or 8.4% of net sales, an increase of USD17.3 million compared to SG&A expenses in the first half 2016 mainly due to higher labor costs, services and fees expenses, partially offset by lower taxes and contributions (other than income tax). Other net operating expense in the first half 2017 was a USD19.8 million loss, compared to a USD1.9 million loss in the first half 2016 mainly as a result of a donation related to the Roberto Rocca technical school in Pesquería, Nuevo León, Mexico in the second quarter 2017. Operating income in the first half 2017 was USD757.0 million, or 17.6% of net sales, compared to operating income of USD495.9 million, or 14.1% of net sales, in the first half 2016.  The following table outlines Ternium’s operating income by segment for the first half 2017 and the first half 2016. The steel segment’s operating income was USD747.0 million in the first half 2017, an increase of USD241.2 million compared to the operating income in the first half 2016, reflecting higher net sales, partially offset by higher operating cost. Net sales of steel products in the first half 2017 increased 22% compared to net sales in the first half 2016, reflecting a USD143 increase in steel revenue per ton and a 77,000 tons increase in shipments. Revenue per ton increased 20% reflecting higher steel prices in Ternium’s main markets. Shipments increased 2% year-over-year in the first half 2017 due to higher shipments in all the markets. Operating cost increased 17% due to a 16% increase in operating cost per ton and the above-mentioned 2% increase in shipment volumes. The increase in operating cost per ton was mainly due to higher raw material, purchased slab, energy and labor costs. The mining segment’s operating income was a gain of USD10.9 million in the first half 2017, compared to a loss of USD10.3 million in the first half 2016, reflecting higher iron ore sales and slightly higher operating cost. Net sales of mining products in the first half 2017 were 28% higher than those in the first half 2016, reflecting 21% higher revenue per ton and 6% higher shipments. Operating cost increased 6% year-over-year mainly due to the above mentioned 6% increase in shipment volumes and a stable operating cost per ton. EBITDA in the first half 2017 was USD962.6 million, or 22.4% of net sales, compared with USD695.8 million, or 19.8% of net sales, in the first half 2016. Net financial results were USD107.0 million loss in the first half 2017, compared to USD22.0 million loss in the first half 2016. During the first half 2017, Ternium’s net financial interest results totaled a loss of USD36.4 million, compared with a loss of USD29.4 million in the first half 2016, reflecting higher weighted average interest rates, partially offset by lower average indebtedness. Net foreign exchange results included a USD79.9 million negative year-over-year difference in net foreign exchange results mainly related to the effect of the fluctuations of the Mexican peso against the U.S. dollar on a net short local currency position in Ternium’s Mexican subsidiaries. In the first half 2017, the Mexican peso appreciated 15% against the U.S. dollar. Change in fair value of financial instruments included in net financial results was a USD9.5 million gain in the first half 2017 compared to a USD8.0 million gain in the first half 2016. Equity in results of non-consolidated companies was a gain of USD36.6 million in the first half 2017, compared to a gain of USD7.3 million in the first half 2016, mainly due to better results from Ternium’s investment in Usiminas. Income tax expense in the first half 2017 was USD94.4 million, or 14% of income before income tax, compared to an income tax expense of USD183.3 million, or 38% of income before income tax, in the first half 2016. Effective tax rate in the first half 2017 included a non-cash gain on deferred taxes due to the 15% appreciation of the Mexican peso against the U.S. dollar during the period. Net gain attributable to non-controlling interest in the first half 2017 was USD81.1 million, compared to a net gain of USD49.5 million in the first half 2016. Net cash provided by operating activities in the first half 2017 was USD106.5 million. Working capital increased by USD458.5 million in the first half 2017 as a result of a USD318.0 million increase in inventories and an aggregate USD284.4 million increase in trade and other receivables, partially offset by an aggregate USD143.9 million increase in accounts payable and other liabilities. The increase in the value of inventories in the first half 2017 was mainly due to USD189.4 million higher costs of slabs, goods in process and finished goods principally as a result of the pass-through of higher purchased slab, scrap, coal and iron ore prices, USD85.1 million higher steel volume and USD43.5 million higher prices and volume of raw materials and other. In addition, during the first half 2017, Ternium made tax payments of an aggregate USD403.9 million. Capital expenditures in the first half 2017 were USD182.5 million, USD47.7 million lower than in the first half 2016. The main investments carried out during the period included those made for the improvement of environmental and safety conditions at certain facilities, the upgrade and expansion of two hot strip mills, the expansion of connectivity and equipment automation, and in Peña Colorada’s iron ore operations. In the first half 2017, Ternium had negative free cash flow of USD76.0 million8. The company’s net proceeds from borrowings in the first half 2017 were USD331.1 million. Net dividends paid to shareholders were USD196.3 million and net dividends paid by subsidiaries to non-controlling interest were USD30.6 million. As of June 30, 2017, Ternium’s net debt position was USD1.2 billion9. Net cash provided by operating activities in the second quarter 2017 was USD20.7 million. Working capital increased by USD140.7 million in the second quarter 2017 as a result of an USD85.2 million increase in inventories and an aggregate USD86.0 million net increase in trade and other receivables, partially offset by an aggregate USD30.5 million net increase in accounts payable and other liabilities. The increase in the value of inventories in the second quarter 2017 was mainly due to higher costs of slabs, goods in process and finished goods principally as a result of the pass-through of higher purchased slab, scrap, coal and iron ore prices, partially offset by lower steel volume and lower volume and prices of raw materials and other. Capital expenditures in the second quarter 2017 were USD98.6 million, USD33.7 million lower than in the second quarter 2016. In addition, during the second quarter 2017, Ternium made tax payments of an aggregate USD337.1 million. Consequently, Ternium had negative free cash flow of USD77.9 million10 in the period. Some of the statements contained in this press release are “forward-looking statements”.  Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements.  These risks include but are not limited to risks arising from uncertainties as to gross domestic product, related market demand, global production capacity, tariffs, cyclicality in the industries that purchase steel products and other factors beyond Ternium’s control. Ternium is a leading steel producer in Latin America, with an annual production capacity of approximately 11.0 million tons of finished steel products. The company manufactures and processes a broad range of value-added steel products for customers active in the construction, automotive, home appliances, capital goods, container, food and energy industries.  With production facilities located in Mexico, Argentina, Colombia, the southern United States and Guatemala, Ternium serves markets in the Americas through its integrated manufacturing system and extensive distribution network.  In addition, Ternium participates in the control group of Usiminas, a Brazilian steel company.  More information about Ternium is available at www.ternium.com. ______________________________________ 1 EBITDA in the second quarter 2017 equals operating income of USD392.8 million adjusted to exclude depreciation and amortization of USD105.0 million. 2 Consolidated EBITDA divided by steel shipments. 3 Each American Depositary Share (ADS) represents 10 shares of Ternium’s common stock.  Results are based on a weighted average number of shares of common stock outstanding (net of treasury shares) of 1,963,076,776. 4 Operating margin is equal to revenue per ton minus operating cost per ton. 5 Operating cost per ton is equal to cost of sales plus SG&A, divided by shipments. 6 EBITDA in the first half 2017 equals operating income of USD757.0 million adjusted to exclude depreciation and amortization of USD205.6 million. 7 Each American Depositary Share (ADS) represents 10 shares of Ternium’s common stock.  Results are based on a weighted average number of shares of common stock outstanding (net of treasury shares) of 1,963,076,776. 8  Negative free cash flow in the first half 2017 equals net cash provided by operating activities of USD106.5 million less capital expenditures of USD182.5 million. 9  Net debt position at June 30, 2017 equals borrowings of USD1.5 billion less cash and equivalents plus other investments of USD0.3 billion. 10 Negative free cash flow in the second quarter 2017 equals net cash provided by operating activities of USD20.7 million less capital expenditures of USD98.6 million.


London, the UK-based LyondellBasell Industries N.V.'s stock finished Tuesday's session 1.40% higher at $81.91. A total volume of 3.28 million shares was traded, which was above their three months average volume of 2.66 million shares. The Company's shares are trading below their 200-day moving average by 2.40%. Furthermore, shares of LyondellBasell Industries, which operates as a manufacturer of chemicals and polymers, refiner of crude oil, producer of gasoline blending components, and developer and licensor of technologies for production of polymers worldwide, have a Relative Strength Index (RSI) of 37.95. On May 03rd, 2017, LyondellBasell Industries announced a $1.7 million donation to the United Way of Greater Houston for its 2016 campaign. As part of the Company's commitment to being a responsible, good neighbor, LyondellBasell employees held United Way campaigns at 23 company sites across the US, and raised a total of $2.65 million. On May 08th, 2017, research firm Bank of America/ Merrill downgraded the Company's stock rating from 'Buy' to 'Underperform'. Visit us today and access our complete research report on LYB at: Shares in Emeryville, California headquartered Amyris Inc. ended at $0.33, down 3.07% from the last trading session. The stock recorded a trading volume of 9.62 million shares, which was above its three months average volume of 3.12 million shares. The Company's shares are trading 36.45% below their 50-day moving average. Moreover, shares of Amyris, which provides various alternatives to a range of petroleum-sourced products worldwide, have an RSI of 30.42. On May 08th, 2017, Amyris and Koninklijke DSM N.V. announced that they have agreed for the latter to make an equity investment in Amyris. At the same time, the companies will enter into a development cooperation focused on products for the global health and nutrition markets, including vitamins and other nutritional ingredients. The complimentary report on AMRS can be downloaded at: West Palm Beach, Florida headquartered Platform Specialty Products Corp.'s stock ended yesterday's session 0.89% lower at $13.37. A total volume of 1.95 million shares was traded, which was higher than their three months average volume of 1.93 million shares. The Company's shares have advanced 0.45% in the past month, 6.53% over the previous three months, and 36.29% on an YTD basis. The stock is trading 1.27% and 28.21% above its 50-day and 200-day moving averages, respectively. Additionally, shares of Platform Specialty Products, which produces and sells specialty chemical products in the Americas, the Asia-Pacific, and Europe, have an RSI of 47.63. On May 08th, 2017, Platform Specialty Products announced its financial results for Q1 ended March 31st, 2017. Net sales for Q1 2017 were $862 million; GAAP fully diluted loss per share was $0.09; adjusted earnings per share was $0.16; reported net loss attributable to common stockholders was $24 million; and adjusted EBITDA was $193 million. Register for free on Stock-Callers.com and access the latest research report on PAH at: On Tuesday, shares in Buenos Aires, Argentina headquartered Ternium S.A. recorded a trading volume of 619,095 shares, which was above their three months average volume of 525,500 shares. The stock finished 3.84% higher at $24.07. The Company's shares have advanced 11.96% in the previous three months and 3.99% since the start of this year. The stock is trading above its 200-day moving average by 7.19%. Furthermore, shares of Ternium, which manufactures and processes various steel products in Mexico, Argentina, Bolivia, Chile, Paraguay, Uruguay, the US, Central America, Colombia, and internationally, have an RSI of 49.66. On May 01st, 2017, Ternium announced that it has filed its annual report on Form 20-F for the year ended December 31st, 2016 with the US SEC. The annual report can be downloaded from the SEC website and from the Company's website. A hard copy of the annual report may be requested, free of charge, via the Company's website. Get free access to your research report on TX at: Stock Callers (SC) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. SC has two distinct and independent departments. 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LUXEMBOURG--(BUSINESS WIRE)--Ternium S.A. (NYSE:TX) today announced two new investment programs that will further develop its industrial system to better serve its customers. The company plans to install a new hot rolling mill at its Pesquería industrial center in Mexico, and to build a new steel reinforcing bar manufacturing facility in northern Colombia. The new state-of-the-art hot rolling mill in Mexico will target the growing industrial and commercial markets, improving customer service and reducing lead-times. The investment will constitute a significant technological upgrade to the country’s steel production capacity, enabling the expansion of Ternium’s product range to encompass a broader dimensional offering and the most advanced steel grades, with the aim at replacing high-value-added steel imports. Ternium’s new hot rolling mill will have an annual production capacity of 3.7 million metric tons. With a total investment of USD1.1 billion, the new line would be operational by the second half of 2020. The current plan includes the option to increase in the future the line’s production capacity by an additional 1.1 million metric tons with a small additional investment. “A new high-end hot rolling mill in Mexico is a logical next step after the addition of our new facility in Brazil, formerly known as CSA, to Ternium’s industrial system,” said Daniel Novegil, CEO of Ternium. “This new equipment, once operational, will integrate upstream with Ternium’s high-end steelmaking capacity in Brazil and downstream with the company’s state-of-the-art Pesquería facility. This will allow us to produce in Mexico technologically advanced products for the demanding and innovative automotive industry, as well as for a wide range of other industries like the home appliance, machinery, energy and construction sectors.” Mr. Novegil continued: “We are also proud to announce a new steel bar production facility in northern Colombia to integrate upstream our operations in the country. The Colombian steel market has been gaining relevance in the region in the last years, with significant growth in steel consumption. This investment will enable us to expand our market share in the dynamic construction sector by offering an alternative to imports. The new facility will enlarge Ternium’s footprint in the country and at the same time contribute to Colombia’s industrial development.” With annual production capacity of 520,000 metric tons and total investment of approximately USD90 million, the new steel bar and coil mill will expand Ternium’s reinforcing bar production capacity in Colombia to 720,000 metric tons. The new mill would be completed by the second half of 2019. Some of the statements contained in this press release are “forward-looking statements”. Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to gross domestic product, related market demand, global production capacity, tariffs, cyclicality in the industries that purchase steel products and other factors beyond Ternium’s control. Ternium is Latin America’s leading flat steel producer, with operating facilities in Mexico, Brazil, Argentina, Colombia, the southern United States and Central America. The company offers a broad range of high value-added steel products for customers active in the automotive, home appliances, construction, capital goods, container, food and energy industries through its manufacturing and service center network and advanced customer integration systems. More information about Ternium is available at www.ternium.com.


News Article | February 22, 2017
Site: www.marketwired.com

LUXEMBOURG--(Marketwired - Feb 21, 2017) - Ternium S.A. ( : TX) entered today into a definitive agreement with thyssenkrupp AG ("tkAG") to acquire a 100% ownership interest in thyssenkrupp Slab International B.V. ("tkSI") and its wholly-owned subsidiary CSA Siderúrgica do Atlântico Ltda. ("CSA"). In addition, tkAG will assign to Ternium a 2.0 million tons per year agreement to supply slabs to thyssenkrupp's former Calvert re-rolling facility in Alabama, U.S. ("Calvert"). The price of the transaction was set using EUR1.5 billion as enterprise value and September 30, 2016 as a locked-box date, and is subject to agreed-upon adjustments at closing. The transaction, which will require antitrust clearance in several jurisdictions, including Brazil, Germany and the U.S., and other conditions, is expected to close on or before September 30, 2017. Based on the agreed-upon valuation and adjustments as of September 30, 2016, and considering CSA's financial debt with BNDES of EUR0.3 billion, Ternium expects to disburse EUR1.26 billion for this transaction. Daniel Novegil, Ternium's CEO said: "Upon completion of this transaction, Ternium is adding another state-of-the-art facility into its industrial system. This will enable us to enhance our differentiation. The facility's specialization in high-end steel slabs, combined with a coordinated product development and supply chain management effort with our high-end steel capacity in Mexico and Argentina, will support new integration opportunities for the manufacturing of sophisticated finished steel products for our customers. This, in turn, will strengthen our business in strategic industrial sectors across Latin America." The assets to be acquired had in calendar year 2016 consolidated annual sales of EUR1.6 billion, shipments of 4.3 million tons and EBITDA of EUR256 million. CSA is a steel slab producer with a steelmaking facility located in the state of Rio de Janeiro, Brazil, and has an annual production capacity of 5 million tons of high-end steel slabs, a deep-water harbor and a 490 MW combined cycle power plant. With annual crude steel production of 6.0 million tons and shipments of 9.8 million tons, Ternium purchased from third parties approximately 3.7 million tons of steel slabs in 2016, that were processed in its downstream facilities to obtain finished steel products to supply its customers. Ternium offers a high-value-added product range to serve the most demanding requirements of its industrial customers. After the completion of the CSA acquisition, Ternium will substantially increase its steelmaking capacity. Ternium anticipates that it will finance the acquisition with bank debt, and that it will begin consolidating tkSI's balance sheet and results of operations as from the third quarter of 2017. Some of the statements contained in this press release are "forward-looking statements". Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to gross domestic product, related market demand, global production capacity, tariffs, cyclicality in the industries that purchase steel products and other factors beyond Ternium's control. Ternium is a leading steel producer in Latin America, with an annual production capacity of approximately 11.0 million tons of finished steel products. The company manufactures and processes a broad range of value-added steel products for customers active in the construction, automotive, home appliances, capital goods, container, food and energy industries. With production facilities located in Mexico, Argentina, Colombia, the southern United States and Guatemala, Ternium serves markets in the Americas through its integrated manufacturing system and extensive distribution network. In addition, Ternium participates in the control group of Usiminas, a Brazilian steel company. More information about Ternium is available at www.ternium.com.


News Article | February 21, 2017
Site: www.marketwired.com

LUXEMBOURG--(Marketwired - Feb 21, 2017) -  Ternium S.A. ( : TX) today announced its results for the fourth quarter and full year period ended December 31, 2016. The financial and operational information contained in this press release is based on Ternium S.A.'s operational data and consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and presented in U.S. dollars (USD) and metric tons. Operating income in 2016 was USD1.1 billion, 79% higher than operating income in 2015. Steel shipments reached 9.8 million tons in 2016, slightly higher year-over-year mainly as a result of a 472,000 ton increase in Mexico, partially offset by a 331,000 ton decrease in the Southern Region. Operating margin increased, mainly reflecting USD133 lower operating cost per ton partially offset by USD77 lower revenue per ton. The decrease in operating cost per ton was mainly due to lower purchased slabs, raw material, energy and labor costs. Steel revenue per ton decreased as a result of lower steel prices in Ternium's main steel markets, partially offset by a higher value added product mix. Net income in 2016 was USD706.9 million, compared to net income of USD59.8 million in 2015. The USD647.1 million increase in the year-over-year comparison was mainly due to higher operating income, better results from non-consolidated companies and lower net financial expenses, partially offset by consequently higher income tax expenses. Ternium's operating income in the fourth quarter 2016 was USD246.7 million, with a strong EBITDA per ton of USD147.4. Operating margin6 decreased sequentially mainly as a result of a USD45 higher steel operating cost per ton7 and a USD13 lower steel revenue per ton, while shipments were slightly higher mainly due to an improvement in shipments in the Southern Region. The increase in operating cost per ton was mainly related to higher purchased slabs and raw material costs flowing through the company's inventories. Steel revenue per ton decreased principally as a result of lower realized steel prices in Mexico and Other Markets partially offset by higher steel prices in the Southern region. Although steel prices in the NAFTA market increased during the fourth quarter 2016, Ternium's revenue per ton in Mexico reflected the third quarter 2016 steel price decrease in the market as a result of the regular price reset of index-based quarterly contracts with industrial customers. Compared to the fourth quarter 2015, the company's operating income in the fourth quarter 2016 increased USD55.1 million, with higher operating margin and shipments. Operating margin in the fourth quarter 2016 increased year-over-year principally due to 4% lower operating cost per ton partially offset by a slight decrease of steel revenue per ton. Shipments were 68,000 tons higher compared to the fourth quarter 2015, mainly as a result of a 118,000 ton increase in Mexico partially offset by a 66,000 ton decrease in the Southern Region. The company's net income in the fourth quarter 2016 was USD144.8 million, compared to USD264.3 million in the third quarter 2016. The USD119.6 million decrease in net income was mainly due to the above mentioned lower operating income, partially offset by better net financial expenses and results from non-consolidated companies, as well as lower income tax expense. Relative to the prior-year-period, net income in the fourth quarter 2016 increased by USD271.3 million mainly due to better results from non-consolidated companies, higher operating income and better net financial expenses, partially offset by higher income tax expense. In the fourth quarter 2015, results from non-consolidated companies included a USD191.9 million impairment charge on Ternium's investments in Usiminas. During 2016, Ternium inaugurated the Roberto Rocca Technical School in Pesquería, Mexico, with 128 students at the start of the 2016-2017 school year. The school, which is a part of Ternium's Pesquería Industrial Center, is the first of its kind in Mexico, offering specializations in electro-mechanics and other disciplines, and scholarships for all students. Once fully completed, the school will have capacity for 360 students, with 12 classrooms, 17 workshops, two labs, a library, a gym, an auditorium, a cafeteria and other facilities. Ternium expects a total investment of approximately USD28.0 million for the school. Ternium's Pesquería Industrial Center, founded in 2013 with a greenfield investment of USD1.1 billion, is located approximately 25 miles from Ternium's main facilities in Monterrey, Mexico, and is focused on manufacturing high-end steel for the auto industry. The Roberto Rocca Technical School is an example of Ternium's social responsibility initiatives that focus on increasing the technical skills and knowledge of the communities in which Ternium operates. Ternium's board of directors proposed that an annual dividend of USD0.10 per share (USD1.00 per ADS), or approximately USD196.3 million in the aggregate, be approved at the company's annual general shareholders' meeting, which is scheduled to be held on May 3, 2017. If the annual dividend is approved at the shareholders' meeting, it will be paid on May 12, 2017, with record-date of May 9, 2017. Ternium expects sequentially higher operating income in the first quarter 2017 on an increase in shipments and operating margin. Higher shipments in Mexico will be partially offset by seasonally lower shipments in the Southern Region. In addition, operating margin will increase as a result of higher realized prices in the company's main markets and relatively stable cost per ton. The company's shipments in Mexico increased 8% year-over-year in 2016, which was above the country's apparent steel use year-over-year expansion of 2% to 3%. Ternium's performance was driven by incrementally improved local manufacturing and construction activity and a weaker oil & gas sector. Additionally, several governmental trade measures in 2016 against unfair steel trade practices in the U.S. and Mexico resulted in lower steel imports in the region and improved business conditions. Steel consumption in Mexico could soften in 2017, as lingering uncertainties over NAFTA's future terms of trade affect construction activity and the investment climate in the country. Notwithstanding this, Ternium expects sequentially higher shipment volumes in Mexico in the first quarter of the year, reflecting a restocking in the value chain in response to strengthening steel prices. Argentina's steel market was relatively weak in 2016, as the country faced a significant rebalancing of the economy's relative prices in a year of macroeconomic policy changes, coupled with a recession in the Brazilian economy. Domestic steel demand, however, started to rebound in the fourth quarter 2016 and the company believes it will gradually recover during 2017, as some of Argentina's steel consuming sectors start to show positive signs, together with improved expectations for the neighboring Brazilian economy. Ternium expects sequentially lower shipments in the Southern Region in the first quarter 2017, mainly as a result of seasonally slower customer activity at the beginning of the year. Ternium also anticipates an increase in revenue per ton, following an upturn in international steel prices. Net gain attributable to Ternium's equity owners in the fourth quarter 2016 was USD118.4 million, compared to net loss attributable to Ternium's equity owners of USD126.2 million in the fourth quarter 2015. Including non-controlling interest, net gain for the fourth quarter 2016 was USD144.8 million, compared to net loss of USD126.5 million in the fourth quarter 2015. Earnings per ADS in the fourth quarter 2016 were USD0.60, compared to losses per ADS of USD0.64 in the fourth quarter 2015. Net sales in the fourth quarter 2016 were USD1.8 billion, or 2% higher than net sales in the fourth quarter 2015. The following table outlines Ternium's consolidated net sales for the fourth quarter 2016 and the fourth quarter 2015: Cost of sales was USD1.4 billion in the fourth quarter 2016, a decrease of USD21.8 million compared to the fourth quarter 2015. This was principally due to a USD19.5 million, or 2%, decrease in raw material and consumables used, mainly reflecting lower iron ore, coking coal and scrap, partially offset by a 3% increase in steel shipments volume. Selling, General & Administrative (SG&A) expenses in the fourth quarter 2016 were USD175.5 million, or 9.5% of net sales, a decrease of USD4.6 million compared to SG&A expenses in the fourth quarter 2015, mainly due to lower taxes and contributions (other than income tax) partially offset by higher labor costs and services and fees expenses. Other net operating expense in the fourth quarter 2016 was a USD10.8 million loss, compared to a USD0.1 million gain in the fourth quarter 2015. Other net operating expense in the fourth quarter 2016 included an USD11.1 million donation related to the Roberto Rocca technical school in Pesquería, Nuevo León, Mexico. Operating income in the fourth quarter 2016 was USD246.7 million, or 13% of net sales, compared to operating income of USD191.6 million, or 11% of net sales, in the fourth quarter 2015. The following table outlines Ternium's operating income by segment for the fourth quarter 2016 and fourth quarter 2015: The steel segment's operating income was USD246.1 million in the fourth quarter 2016, an increase of USD48.1 million compared to the fourth quarter 2015, reflecting higher net sales and lower operating cost. Net sales of steel products in the fourth quarter 2016 increased 2% compared to the fourth quarter 2015, reflecting a 68,000-ton increase in shipments partially offset by a slightly lower revenue per ton. Shipments increased 3% year-over-year in the fourth quarter 2016 mainly due to higher shipments in Mexico and in Other Markets, partially offset by lower shipment in the Southern Region. The decrease in revenue per ton reflected lower steel prices in the Southern Region partially offset by higher steel prices and better product mix in Mexico. Operating cost decreased 1% in the fourth quarter 2016, due to a 4% decrease in cost per ton partially offset by the above mentioned 3% increase in shipments. The decrease in cost per ton year-over-year was mainly the result of lower raw material costs. The mining segment's operating income was a gain of USD0.9 million in the fourth quarter 2016, compared to a loss of USD3.3 million in the fourth quarter 2015, mainly reflecting higher iron ore sales partially offset by higher operating cost. Mining products net sales in the fourth quarter 2016 increased USD9.2 million, mainly as a result of higher revenue per ton partially offset by lower shipments. Shipments were 855,000 tons, 6% lower than in the fourth quarter 2015. Operating cost increased 10% year-over-year, mainly due to 17% increase in operating cost per ton partially offset by the above mentioned 6% decrease in shipment volumes. EBITDA in the fourth quarter 2016 was USD350.6 million, or 19.0% of net sales, compared to USD297.1 million, or 16.4% of net sales, in the fourth quarter 2015. Net financial results were a USD3.7 million loss in the fourth quarter 2016, compared to a USD53.5 million loss in the fourth quarter 2015. During the fourth quarter 2016, Ternium's net financial interest results totaled a loss of USD21.1 million, compared to a loss of USD15.5 million in the fourth quarter 2015, reflecting higher weighted average interest rates partially offset by a lower indebtedness. Net foreign exchange results were a gain of USD16.4 million in the fourth quarter 2016 compared to a loss of USD30.1 million in the fourth quarter 2015. The fourth quarter 2016 gain was mainly due to the positive impact of the Mexican peso's 6% devaluation against the U.S. dollar on a net short local currency position in Ternium's Mexican subsidiaries. The fourth quarter 2015 loss was mainly due to the negative impact of the Argentine Peso's 28% depreciation against the U.S. dollar on Ternium's Argentine subsidiary Siderar's U.S. dollar financial position. Siderar's functional currency is the Argentine Peso. Change in fair value of financial instruments included in net financial results was a USD1.3 million gain in the fourth quarter 2016 compared to an USD7.4 million loss in the fourth quarter 2015. Equity in results of non-consolidated companies was a gain of USD6.5 million in the fourth quarter 2016, compared to a loss of USD213.4 million in the fourth quarter 2015. The equity in results of non-consolidated companies in the fourth quarter 2015 included a USD191.9 million loss related to an impairment of Ternium's investment in Usiminas. Income tax expense in the fourth quarter 2016 was USD104.8 million, or 42% of income before income tax expense, compared to an income tax expense of USD51.2 million in the fourth quarter 2015, or 68% of income before income tax expense. Effective tax rate in the fourth quarter 2016 included a non-cash charge on deferred taxes due to the 6% devaluation of the Mexican peso against the U.S. dollar during the period, which reduces, in U.S. dollar terms, the tax base used to calculate deferred tax at our Mexican subsidiaries (which have the U.S. dollar as their functional currency). Effective tax rate in the fourth quarter 2015 was mainly affected by the impact of non-taxable losses stemming from the investment in Usiminas. Net gain attributable to non-controlling interest in the fourth quarter 2016 was USD26.3 million, compared to net loss of USD0.3 million in the same period in 2015. Net income attributable to Ternium's equity owners in 2016 was USD595.6 million, compared to a net income attributable to Ternium's equity owners of USD8.1 million in 2015. Including non-controlling interest, net income for 2016 was USD706.9 million, compared to net income of USD59.8 million in 2015. Earnings per ADS in 2016 were USD3.03, compared to earnings of USD0.04 in 2015. Net sales in 2016 were USD7.2 billion, 8% lower than net sales in 2015. The following table outlines Ternium's consolidated net sales for 2016 and 2015: Cost of sales was USD5.4 billion in 2016, a decrease of USD1.1 billion compared to 2015. This was principally due to a USD969.6 million, or 20%, decrease in raw material and consumables used, mainly reflecting lower iron ore, coking coal, scrap, energy and purchased slabs costs; and to a USD123.3 million decrease in other costs, mainly including a USD50.2 million decrease in maintenance expenses, a USD39.5 million decrease in labor cost, a USD28.9 million decrease in depreciation of property, plant and equipment and amortization of intangible assets, and an USD9.2 million decrease in services and fees, partially offset by a 2% increase in steel shipments volume. Selling, General & Administrative (SG&A) expenses in 2016 were USD687.9 million, or 9.5% of net sales, a decrease of USD82.3 million compared to SG&A expenses in 2015 mainly due to lower taxes and contributions (other than income tax), lower labor costs, freight and transportation expenses, and services and fees expenses. Other net operating expense in 2016 was a USD9.9 million loss, compared to a USD9.5 million gain in 2015. Other net operating expense in 2016 included an USD11.1 million donation related to the Roberto Rocca technical school in Pesquería, Nuevo León, Mexico. Operating income in 2016 was USD1.1 billion, or 15.8% of net sales, compared to operating income of USD639.3 million, or 8.1% of net sales, in 2015. The following table outlines Ternium's operating income by segment for 2016 and 2015. The steel segment's operating income was USD1.1 billion in 2016, an increase of USD473.5 million compared to the operating income in 2015, reflecting lower operating cost, partially offset by lower net sales. Net sales of steel products in 2016 decreased 8% compared to net sales in 2015, reflecting a USD77 decrease in steel revenue per ton, partially offset by a 164,000 tons increase in shipments. Revenue per ton decreased 9% reflecting lower steel prices in Ternium's main steel markets, partially offset by a better product mix. Shipments increased 2% year-over-year in 2016 mainly due to higher shipments in Mexico and Other Markets, partially offset by lower shipments in the Southern Region. Operating cost decreased 16% due to a 17% decrease in operating cost per ton partially offset by the above-mentioned 2% increase in shipment volumes. The decrease in operating cost per ton was mainly due to lower raw material, purchased slabs, energy and labor costs. The mining segment's operating income was a gain of USD1.5 million in 2016, compared to a loss of USD24.5 million in 2015, mainly reflecting lower operating cost and relatively stable iron ore sales. Net sales of mining products in 2016 were 1% higher than those in 2015, reflecting 9% lower shipments offset by 11% higher revenue per ton. Operating cost decreased 11% year-over-year, mainly due to the above mentioned 9% decrease in shipment volumes and 2% decrease in operating cost per ton. EBITDA in 2016 was USD1.5 billion, or 21.4% of net sales, compared with USD1.1 billion, or 13.6% of net sales, in 2015. Net financial expenses were USD37.9 million in 2016, compared to USD99.4 million in 2015. During 2016, Ternium's net interest results totaled a loss of USD75.8 million, compared with a loss of USD81.5 million in 2015. Net foreign exchange results was a gain of USD20.3 million in 2016 compared to a loss of USD5.2 million in 2015. Change in fair value of financial instruments included in net financial results was a USD19.3 million gain in 2016 compared to a USD10.2 million loss in 2015. Equity in results of non-consolidated companies was a gain of USD14.6 million in 2016, compared to a loss of USD272.8 million in 2015. The equity in results of non-consolidated companies in 2015 included the above mentioned USD191.9 million loss related to an impairment of Ternium's investment in Usiminas. Income tax expense in 2016 was USD411.5 million, or 37% of income before income tax, compared to an income tax expense of USD207.3 million, or 78% of income before income tax, in 2015. Effective tax rate in 2016 included a non-cash charge on deferred taxes due to the 17% devaluation of the Mexican peso against the U.S. dollar during the period, which reduces, in U.S. dollar terms, the tax base used to calculate deferred tax at our Mexican subsidiaries (which have the U.S. dollar as their functional currency). Effective tax rate in 2015 was mainly affected by the impact of non-taxable losses stemming from the investment in Usiminas, among other non-cash effects on deferred taxes. Net gain attributable to non-controlling interest in 2016 was USD111.3 million, compared to a net gain of USD51.7 million in 2015. Net cash provided by operating activities in 2016 was USD1.1 billion. Working capital increased by USD162.4 million in 2016 as a result of an aggregate USD149.7 million increase in trade and other receivables and a USD114.7 million increase in inventories, partially offset by an aggregate USD102.0 million increase in accounts payable and other liabilities. The increase in inventories in 2016 was mainly due to higher inventory cost, partially offset by lower inventory volumes, of goods in process, purchased slabs and raw materials, and higher inventory cost and volumes of finished goods. Cash flow related to capital expenditures in 2016 was USD435.5 million, USD31.2 million lower than cash flow in 2015. The main investments carried out during the year included, in Mexico, those made for the upgrade and expansion of a hot strip mill, the expansion of service center processing capacity, the improvement of environmental and safety conditions at certain facilities and the expansion of Peña Colorada's iron ore processing facilities to compensate for lower grade ore reserves, and, in Argentina, those made at the steelmaking facilities, the coking facilities, the hot-rolling mill and at one cold-rolling mill. In 2016, Ternium had free cash flow of USD664.1 million8. During the year, the company contributed USD114.4 million to Usiminas in connection with its capital increase process and lent USD92.5 million to its non-consolidated company Techgen. In addition, Ternium's net repayment of borrowings in 2016 was USD281.2 million. Net dividends paid to shareholders were USD176.7 million and net dividends paid by subsidiaries to non-controlling interest were USD50.8 million. As of December 31, 2016, Ternium's net debt position was USD0.9 billion9. Net cash provided by operating activities in the fourth quarter 2016 was USD278.1 million. Working capital decreased by USD0.6 million in the fourth quarter 2016 as a result of an aggregate USD44.0 million decrease in trade and other receivables and an aggregate USD42.2 million increase in accounts payable and other liabilities, partially offset by a USD85.6 million increase in inventories. The increase in inventories in the fourth quarter 2016 was mainly due to higher inventory cost of finished goods and raw materials, and higher inventory volumes of goods in process and purchased slabs. Cash flow related to capital expenditures in the fourth quarter 2016 was USD100.4 million, USD23.4 million lower than cash flow in the fourth quarter 2015. Ternium had free cash flow of USD177.7 million10 in the period. Some of the statements contained in this press release are "forward-looking statements". Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to gross domestic product, related market demand, global production capacity, tariffs, cyclicality in the industries that purchase steel products and other factors beyond Ternium's control. Ternium is a leading steel producer in Latin America, with an annual production capacity of approximately 11.0 million tons of finished steel products. The company manufactures and processes a broad range of value-added steel products for customers active in the construction, automotive, home appliances, capital goods, container, food and energy industries. With production facilities located in Mexico, Argentina, Colombia, the southern United States and Guatemala, Ternium serves markets in the Americas through its integrated manufacturing system and extensive distribution network. In addition, Ternium participates in the control group of Usiminas, a Brazilian steel company. More information about Ternium is available at www.ternium.com. 1 EBITDA in 2016 equals operating income of USD1.1 billion adjusted to exclude depreciation and amortization of USD406.9 million. 2 Each American Depositary Share (ADS) represents 10 shares of Ternium's common stock. Results are based on a weighted average number of shares of common stock outstanding (net of treasury shares) of 1,963,076,776. 3 EBITDA in the fourth quarter 2016 equals operating income of USD246.7 million adjusted to exclude depreciation and amortization of USD103.9 million. 4 Consolidated EBITDA divided by steel shipments. 5 Each American Depositary Share (ADS) represents 10 shares of Ternium's common stock. Results are based on a weighted average number of shares of common stock outstanding (net of treasury shares) of 1,963,076,776. 6 Operating margin is equal to revenue per ton minus operating cost per ton. 7 Operating cost per ton is equal to cost of sales plus SG&A, divided by shipments. 8 Free cash flow in 2016 equals net cash provided by operating activities of USD1.1 billion less capital expenditures of USD435.5 million. 9 Net debt position at December 31, 2016 equals borrowings of USD1.2 billion less cash and equivalents plus other investments of USD0.3 billion. 10 Free cash flow in the fourth quarter 2016 equals net cash provided by operating activities of USD278.1 million less capital expenditures of USD100.4 million.


News Article | March 1, 2017
Site: www.businesswire.com

LUXEMBOURG--(BUSINESS WIRE)--Ternium S.A. (NYSE: TX) today announced its plans to build a hot-dip galvanizing line and a pre-painting line in its facility in Pesquería, Mexico. The new lines will target Mexico’s industrial markets, deepening the company’s import substitution strategy. Ternium’s new hot-dip galvanizing and pre-painting lines will have annual production capacity of 300,000 and 120,000 metric tons, respectively. With a total investment of approximately USD260 million, the new lines would be operational by 2020 and expand Ternium’s current hot-dip galvanizing and pre-painting production capacity in Mexico by 17% and 20%, respectively. This new high-value-adding processing capacity will support Ternium’s leading position as a steel supplier to the growing household appliances, lightning and metal-mechanic industries in Mexico, and will broaden the company’s product range. Some of the statements contained in this press release are “forward-looking statements”. Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to gross domestic product, related market demand, global production capacity, tariffs, cyclicality in the industries that purchase steel products and other factors beyond Ternium’s control. Ternium is a leading steel producer in Latin America, with an annual production capacity of approximately 11.0 million tons of finished steel products. The company manufactures and processes a broad range of value-added steel products for customers active in the construction, automotive, home appliances, capital goods, container, food and energy industries. With production facilities located in Mexico, Argentina, Colombia, the southern United States and Guatemala, Ternium serves markets in the Americas through its integrated manufacturing system and extensive distribution network. In addition, Ternium participates in the control group of Usiminas, a Brazilian steel company. More information about Ternium is available at www.ternium.com.


News Article | November 3, 2016
Site: www.marketwired.com

LUXEMBOURG--(Marketwired - Nov 3, 2016) -  Ternium S.A. ( : TX) today announced its results for the third quarter and first nine months ended September 30, 2016. The financial and operational information contained in this press release is based on Ternium S.A.'s operational data and consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and presented in U.S. dollars (USD) and metric tons. Ternium's operating income in the third quarter 2016 was USD399.1 million, USD105.6 million higher than operating income in the second quarter 2016. Shipments were 2.3 million tons in the third quarter 2016, decreasing 260,000 tons sequentially, mainly as a result of 225,000 tons lower shipments in Mexico, affected by a destocking in the commercial market over the past few months as well as by third quarter seasonality in the automotive industry. Operating margin4 increased in the quarter as a result of an 11% sequential increase in steel revenue per ton partially offset by a 3% higher operating cost per ton5. Steel revenue per ton increased 13% in Mexico, 10% in Other Markets and 3% in the Southern Region. Compared to the third quarter 2015, the company's operating income in the third quarter 2016 increased USD258.6 million, with higher operating margin partially offset by lower shipments. Operating margin in the third quarter 2016 increased principally due to lower cost of purchased slabs, raw materials, energy and labor, as steel revenue per ton remained stable in the year-over-year comparison. Shipments were 115,000 tons lower compared to the third quarter 2015, mainly as a result of a 106,000-ton decrease in the Southern Region. The company's net income in the third quarter 2016 was USD264.3 million, compared to USD174.3 million in the second quarter 2016. The USD90.1 million increase in net income was mainly due to higher operating income and a lower effective tax rate, partially offset by higher net financial expenses and lower gains from non-consolidated companies. Relative to the prior-year-period, net income in the third quarter 2016 increased by USD224.3 million mainly due to higher operating income, better results from non-consolidated companies and lower net financial expenses, partially offset by consequently higher income tax expenses. Summary of First Nine Months of 2016 Results Operating income in the first nine months of 2016 was USD895.0 million, 100% higher than operating income in the first nine months of 2015. Steel shipments reached 7.4 million tons in the first nine months of 2016, slightly higher year-over-year mainly as a result of 354,000 tons higher shipments in Mexico partially offset by 265,000 tons lower shipments in the Southern Region. Steel operating margin increased, mainly reflecting USD162 lower operating cost per ton partially offset by USD100 lower revenue per ton. The decrease in operating cost per ton was mainly due to lower cost of purchased slabs, raw materials, energy and labor. Net income in the first nine months of 2016 was USD562.2 million, compared to net income of USD186.3 million in the first nine months of 2015. The USD375.9 million increase in the year-over-year comparison was mainly due to higher operating income, better results from non-consolidated companies and lower net financial expenses, partially offset by consequently higher income tax expenses. Following significant decreases since June 2016, steel prices bottomed out, with several announcements of price increases recently taking place in the U.S. market. In addition, an increase in raw material benchmark prices, particularly with respect to metallurgical coal, is supporting strength in international steel prices and reducing the gap vis-à-vis U.S. prices. Steel end-user demand in North America remains stable at healthy levels. In Mexico, the automotive and household appliance industries are steady, while construction is weak as a result of low government infrastructure spending and a deceleration of private construction growth. As anticipated, steel market conditions in Argentina remained weak in the third quarter 2016, however, Ternium believes domestic steel demand has started to rebound. The automotive industry in the country continues to operate at a low capacity utilization rate, although domestic automobile sales have been growing in the past few months and auto exports to Brazil, the major export destination for Argentina's car industry, should increase if expectations for an economic recovery in that country come to fruition. After a transition period in 2016, the company expects Argentina to return to growth in 2017. Ternium expects sequentially lower operating income in the last quarter of the year, after a strong performance in the third quarter 2016. The company anticipates relatively stable shipments and lower operating margin as a result of lower revenue per ton and higher cost per ton. Average realized prices in the fourth quarter 2016 will begin to reflect the significant decrease in steel prices over the past few months in the North-American market, with the usual lag effect of regular price resets contained in industrial customer sales contracts. In addition, the company's cost of sales in the fourth quarter will be affected by the pass-through of higher slab market prices, which increased to current levels at the end of the first half of 2016. Net gain attributable to Ternium's equity owners in the third quarter 2016 was USD228.9 million, compared to net gain attributable to Ternium's equity owners of USD24.8 million in the third quarter 2015. Including non-controlling interest, net gain for the third quarter 2016 was USD264.3 million, compared to net gain of USD40.0 million in the third quarter 2015. Earnings per ADS in the third quarter 2016 were USD1.17, compared to earnings per ADS of USD0.13 in the third quarter 2015. Net sales in the third quarter 2016 were USD1.9 billion, or 5% lower than net sales in the third quarter 2015. The following table outlines Ternium's consolidated net sales for the third quarter 2016 and the third quarter 2015: Cost of sales was USD1.3 billion in the third quarter 2016, a decrease of USD329.6 million compared to the third quarter 2015. This was principally due to a USD302.3 million, or 25%, decrease in raw material and consumables used, mainly reflecting lower iron ore, coking coal, scrap, energy and purchased slabs costs, and a 5% decrease in steel shipments; and to a USD27.3 million decrease in other costs, mainly including a USD9.0 million decrease in maintenance expenses, a USD7.8 million decrease in depreciation of property, plant and equipment and amortization of intangible assets, a USD7.4 million decrease in labor cost and a USD4.9 million decrease in services and fees. Selling, General & Administrative (SG&A) expenses in the third quarter 2016 were USD168.4 million, or 9.1% of net sales, a decrease of USD19.6 million compared to SG&A expenses in the third quarter 2015, mainly due to lower labor costs, freight and transportation expenses and lower taxes and contributions (other than income tax). Operating income in the third quarter 2016 was USD399.1 million, or 21.5% of net sales, compared to operating income of USD140.5 million, or 7.2% of net sales, in the third quarter 2015. The following table outlines Ternium's operating income by segment for the third quarter 2016 and third quarter 2015: The steel segment's operating income was USD392.3 million in the third quarter 2016, an increase of USD249.1 million compared to the third quarter 2015, reflecting lower operating cost, partially offset by lower net sales. Net sales of steel products in the third quarter 2016 decreased 5% compared to the third quarter 2015, reflecting a 115,000-ton decrease in shipments and similar revenue per ton. Shipments decreased 5% year-over-year in the third quarter 2016 mainly due to lower shipments in the Southern Region. The increase in revenue per ton reflected higher steel prices and better product mix in Mexico offset by lower steel prices in the Southern Region. Operating cost decreased 19% year-over-year in the third quarter 2016, due to a 15% decrease in cost per ton and the above mentioned 5% decrease in shipments. The decrease in cost per ton year-over-year was mainly the result of lower raw material and purchased slabs costs. The mining segment's operating income was a gain of USD10.9 million in the third quarter 2016, compared to a loss of USD4.1 million in the third quarter 2015, mainly reflecting higher iron ore sales and lower operating cost. Mining products net sales in the third quarter 2016 increased USD7.0 million, mainly as a result of higher revenue per ton partially offset by lower shipments. Shipments were 808,000 tons, 9% lower than in the third quarter 2015. Operating cost decreased 14% year-over-year, mainly due to the above mentioned 9% decrease in shipment volumes and a 5% decrease in operating cost per ton. The decrease in operating cost per ton was mainly the result of lower depreciation of property, plant and equipment. EBITDA in the third quarter 2016 was USD502.3 million, or 27.1% of net sales, compared to USD250.4 million, or 12.9% of net sales, in the third quarter 2015. Net financial results were a USD12.2 million loss in the third quarter 2016, compared to a USD19.9 million loss in the third quarter 2015. During the third quarter 2016, Ternium's net financial interest results totaled a loss of USD25.4 million, compared to a loss of USD21.5 million in the third quarter 2015, reflecting higher weighted average interest rates partially offset by a lower indebtedness. Net foreign exchange results were a gain of USD3.3 million in the third quarter 2016 compared to a gain of USD11.2 million in the third quarter 2015. Change in fair value of financial instruments included in net financial results was a USD10.0 million gain in the third quarter 2016 compared to an USD8.8 million loss in the third quarter 2015. This gain in the third quarter 2016 was mainly related to results from changes in the fair value of financial assets and by certain derivative instruments entered into to compensate for the interest rate charges derived from Ternium's Argentine subsidiary Siderar's Argentine Peso denominated financial debt. Equity in results of non-consolidated companies was a gain of USD0.8 million in the third quarter 2016, compared to a loss of USD48.8 million in the third quarter 2015, mainly due to better results from Ternium's investment in Usiminas. Income tax expense in the third quarter 2016 was USD123.4 million, or 32% of income before income tax expense, compared to an income tax expense of USD31.8 million in the third quarter 2015, or 44% of income before income tax expense. Net gain attributable to non-controlling interest in the third quarter 2016 was USD35.5 million, compared to net gain of USD15.2 million in the same period in 2015. Analysis of First Nine Months of 2016 Results Net income attributable to Ternium's equity owners in the first nine months of 2016 was USD477.2 million, compared to a net income attributable to Ternium's equity owners of USD134.3 in the first nine months of 2015. Including non-controlling interest, net income for the first nine months of 2016 was USD562.2 million, compared to net income of USD186.3 million in the first nine months of 2015. Earnings per ADS in the first nine months of 2016 were USD2.43, compared to earnings of USD0.68 in the first nine months of 2015. Net sales in the first nine months of 2016 were USD5.4 billion, 11% lower than net sales in the first nine months of 2015. The following table outlines Ternium's consolidated net sales for the first nine months of 2016 and the first nine months of 2015: Cost of sales was USD4.0 billion in the first nine months of 2016, a decrease of USD1.1 billion compared to the first nine months of 2015. This was principally due to a USD950.1 million, or 25%, decrease in raw material and consumables used, mainly reflecting lower iron ore, coking coal, scrap, energy and purchased slabs costs; and to a USD121.0 million decrease in other costs, mainly including a USD55.1 million decrease in labor cost, a USD32.5 million decrease in maintenance expenses, a USD27.3 million decrease in depreciation of property, plant and equipment and amortization of intangible assets, and an USD11.0 million decrease in services and fees, partially offset by a 1% increase in steel shipments volume. In addition, the Argentine peso significant devaluation against the US dollar by the end of 2015 helped to reduce Ternium's Argentine subsidiary's costs year-over-year, as a result of the currency devaluation effect on the U.S. dollar value of the subsidiary's inventory as of the end of December 2015. Selling, General & Administrative (SG&A) expenses in the first nine months of 2016 were USD512.5 million, or 9.5% of net sales, a decrease of USD77.7 million compared to SG&A expenses in the first nine months of 2015 mainly due to lower labor costs, freight and transportation expenses, services and fees expenses and lower taxes and contributions (other than income tax). Operating income in the first nine months of 2016 was USD895.0 million, or 16.7% of net sales, compared to operating income of USD447.7 million, or 7.4% of net sales, in the first nine months of 2015. The following table outlines Ternium's operating income by segment for the first nine months of 2016 and the first nine months of 2015. The steel segment's operating income was USD898.0 million in the first nine months of 2016, an increase of USD425.4 million compared to the operating income in the first nine months of 2015, reflecting lower operating cost, partially offset by lower net sales. Net sales of steel products in the first nine months of 2016 decreased 11% compared to net sales in the first nine months of 2015, reflecting a USD100 decrease in steel revenue per ton, partially offset by a 95,000 tons increase in shipments. Revenue per ton decreased 12% reflecting lower steel prices in Ternium´s main steel markets, partially offset by a better product mix. Shipments increased 1% year-over-year in the first nine months of 2016 mainly due to higher shipments in Mexico and the Other Markets, partially offset by lower shipments in the Southern Region. Operating cost decreased 20% due to a 21% decrease in operating cost per ton partially offset by the above-mentioned 1% increase in shipment volumes. The decrease in operating cost per ton was mainly due to lower raw material, purchased slabs, energy, labor and maintenance costs, as well as to the effect of the Argentine peso depreciation on the U.S. dollar value of Ternium's Argentine subsidiary's inventory as of the end of December 2015. The mining segment's operating income was a gain of USD0.6 million in the first nine months of 2016, compared to a loss of USD21.2 million in the first nine months of 2015, mainly reflecting lower operating cost, partially offset by lower iron ore sales. Net sales of mining products in the first nine months of 2016 were 5% lower than in the first nine months of 2015, reflecting 10% lower shipments partially offset by 5% higher revenue per ton. Operating cost decreased 17% year-over-year, mainly due to the above mentioned 10% decrease in shipment volumes and 7% decrease in operating cost per ton. The decrease in operating cost per ton was mainly the result of lower energy and labor costs. EBITDA in the first nine months of 2016 was USD1.2 billion, or 22.3% of net sales, compared with USD776.0 million, or 12.8% of net sales, in the first nine months of 2015. Net financial expenses were USD34.2 million in the first nine months of 2016, compared to USD45.9 million in the first nine months of 2015. During the first nine months of 2016, Ternium's net interest results totaled a loss of USD54.8 million, compared with a loss of USD66.0 million in the first nine months of 2015, reflecting lower average indebtedness. Net foreign exchange results was a gain of USD3.9 million in the first nine months of 2016 compared to a gain of USD24.9 million in the first nine months of 2015. Change in fair value of financial instruments included in net financial results was a USD18.0 million gain in the first nine months of 2016 compared to a USD2.8 million loss in the first nine months of 2015. Equity in results of non-consolidated companies was a gain of USD8.1 million in the first nine months of 2016, compared to a loss of USD59.4 million in the first nine months of 2015, mainly due to better results from Ternium's investment in Usiminas. Income tax expense in the first nine months of 2016 was USD306.7 million, or 35% of income before income tax, compared to an income tax expense of USD156.1 million, or 46% of income before income tax, in the same period in 2015. Net gain attributable to non-controlling interest in the first nine months of 2016 was USD84.9 million, compared to a net gain of USD52.0 million in the same period in 2015. Net cash provided by operating activities in the first nine months of 2016 was USD821.5 million. Working capital increased by USD163.0 million in the first nine months of 2016 as a result of an aggregate USD193.7 million increase in trade and other receivables and a USD29.1 million increase in inventories, partially offset by an aggregate USD59.8 million increase in accounts payable and other liabilities. Capital expenditures in the first nine months of 2016 were USD335.0 million, similar to capital expenditures in the first nine months of 2015. The main investments carried out during the period included, in Mexico, those made for the upgrade and expansion of a hot strip mill, the expansion of service center processing capacity, the improvement of environmental and safety conditions at certain facilities and the expansion of Peña Colorada's iron ore processing facilities to compensate for lower grade ore reserves, and, in Argentina, those made at the steelmaking facilities, the coking facilities, the hot-rolling mill and at one cold-rolling mill. In the first nine months of 2016, Ternium had free cash flow of USD486.5 million8. During the period, the company contributed USD114.4 million to Usiminas in connection with its capital increase process and lent USD77.2 million to its non-consolidated company Techgen. In addition, Ternium's net repayment of borrowings in the first nine months of 2016 was USD107.4 million. Net dividends paid to shareholders were USD176.7 million and net dividends paid by subsidiaries to non-controlling interest were USD50.8 million. As of September 30, 2016, Ternium's net debt position was USD1.1 billion9. Net cash provided by operating activities in the third quarter 2016 was USD220.4 million. Working capital increased by USD210.1 million in the third quarter 2016 as a result of a USD211.6 million increase in inventories and an aggregate USD17.1 million net increase in trade and other receivables, partially offset by an aggregate USD18.6 million net increase in accounts payable and other liabilities. The increase in inventories in the third quarter 2016 was mainly due to higher inventory cost and higher inventory volumes of finished goods, goods in process, purchased slabs and raw materials. Capital expenditures in the third quarter 2016 were USD104.9 million, similar to capital expenditures in the third quarter 2015. Ternium had free cash flow of USD115.5 million10 in the period. Some of the statements contained in this press release are "forward-looking statements". Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to gross domestic product, related market demand, global production capacity, tariffs, cyclicality in the industries that purchase steel products and other factors beyond Ternium's control. Ternium is a leading steel producer in Latin America, with an annual production capacity of approximately 11.0 million tons of finished steel products. The company manufactures and processes a broad range of value-added steel products for customers active in the construction, automotive, home appliances, capital goods, container, food and energy industries. With production facilities located in Mexico, Argentina, Colombia, the southern United States and Guatemala, Ternium serves markets in the Americas through its integrated manufacturing system and extensive distribution network. In addition, Ternium participates in the control group of Usiminas, a Brazilian steel company. More information about Ternium is available at www.ternium.com. 1 EBITDA in the third quarter 2016 equals operating income of USD399.1 million adjusted to exclude depreciation and amortization of USD103.1 million. 2 Consolidated EBITDA divided by steel shipments. 3 Each American Depositary Share (ADS) represents 10 shares of Ternium's common stock. Results are based on a weighted average number of shares of common stock outstanding (net of treasury shares) of 1,963,076,776. 4 Operating margin is equal to revenue per ton minus operating cost per ton. 5 Operating cost per ton is equal to cost of sales plus SG&A, divided by shipments. 6 EBITDA in the first nine months of 2016 equals operating income of USD895.0 million adjusted to exclude depreciation and amortization of USD303.0 million. 7 Each American Depositary Share (ADS) represents 10 shares of Ternium's common stock. Results are based on a weighted average number of shares of common stock outstanding (net of treasury shares) of 1,963,076,776. 8 Free cash flow in the first nine months of 2016 equals net cash provided by operating activities of USD821.5 million less capital expenditures of USD335.0 million. 9 Net debt position at September 30, 2016 equals borrowings of USD1.4 billion less cash and equivalents plus other investments of USD0.3 billion. 10 Free cash flow in the third quarter 2016 equals net cash provided by operating activities of USD220.4 million less capital expenditures of USD104.9 million.


News Article | February 22, 2017
Site: www.marketwired.com

The financial and operational information contained in this press release is based on audited consolidated financial statements presented in U.S. dollars and prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board and adopted by the European Union, or IFRS; Additionally, this press release includes non-IFRS alternative performance measures i.e., EBITDA, Net cash / debt and Free Cash Flow; See exhibit I for more details on these alternative performance measures LUXEMBOURG--(Marketwired - Feb 22, 2017) - Tenaris S.A. ( : TS) ( : TS) ( : TS) ( : TEN) ("Tenaris") today announced its results for the fourth quarter and year ended December 31, 2016 with comparison to its results for the fourth quarter and year ended December 31, 2015. *EBITDA includes severance charges of $8 million in Q4 2016, $10 million in Q3 2016 and $34 million in Q4 2015. If these charges were not included EBITDA would have been $180 million (17%) in Q4 2016, $144 million (14%) in Q3 2016 and $247 million (18%) in Q4 2015. Following the agreement to sell Republic Conduit to Nucor, our electric conduit business was reclassified in our financial statements as a discontinued operation. In Q4 2016 the conduit business had sales of $56 million, EBITDA of $14 million and net income of $8 million. Our fourth quarter sales rose 6% quarter on quarter, marking the end of a period of two years of consecutive quarterly declines. The increase in sales was led by North America, where shales drilling activity has been recovering rapidly, and the Middle East, where we had a good level of shipments during the quarter. Our EBITDA rose by 29% over the level of the previous quarter in spite of a further decline in average selling prices reflecting better absorption of fixed costs, lower levels of inefficiencies in our industrial operations with higher production levels and a partial recovery of allowances for bad debts. Cash used in operating activities amounted to $79 million in the fourth quarter of 2016, following an increase of $211 million in working capital. After a dividend payment of $153 million and capital expenditures of $158 million, our net cash position at the end of the year amounted to $1.4 billion. *EBITDA includes severance charges of $74 million in 2016 and $177 million in 2015. If these charges were not included 2016 EBITDA would have been $672 milion (16%) and 2015 EBITDA would have been $1,396 million (20%). The conduit business which as of December 31, 2016 is classified as a discontinued operation, in 2016 had sales of $235 million, EBITDA of $71 million and net income of $41 million. In 2016, our net sales declined 38% compared to 2015, affected by continued adverse market conditions. Sales of Tubes were down 38%, reflecting lower drilling activity in North and South America and in offshore regions worldwide, declines in selling prices and a lack of shipments for line projects in Brazil and Argentina following the first quarter of the year. EBITDA declined 51% year on year, reflecting lower sales and a reduction in gross margins on lower average selling prices and lower absorption of fixed costs. Net income amounted to a gain of $59 million in 2016 compared to a loss of $74 million in 2015, which had included an impairment charge of $400 million. In spite of capital expenditures of $787 million, mainly related to the construction of our greenfield project in Bay City, we reached a positive free cash flow of $77 million in 2016. After dividend payments of $508 million, our net cash position reached $1.4 billion at December 31, 2016, compared with $1.8 billion at December 31, 2015. The board of directors proposes, for the approval of the annual general shareholders' meeting to be held on May 3, 2017, the payment of an annual dividend of $0.41 per share ($0.82 per ADS), or approximately $484 million, which includes the interim dividend of $0.13 per share ($0.26 per ADS), or approximately $153 million, paid in November 2016. If the annual dividend is approved by the shareholders, a dividend of $0.28 per share ($0.56 per ADS), or approximately $331 million will be paid on May 24, 2017, with an ex-dividend date on May 22, 2017 and record date on May 23, 2017. On January 20, 2017, we completed the previously announced sale of our North American conduit business to Nucor for a total consideration of $ 332 million. The gain arising from this sale will be recorded in the first quarter of 2017. As of December 31, 2016 the conduit business is classified as a discontinued operation. As we enter 2017, in the USA and Canada, a rapid recovery is taking place in shale drilling activity, as oil and gas companies increase investments following two consecutive years of declining expenditure. The recovery is supported by oil prices which have risen above $50/bbl and natural gas prices (Henry Hub) above $3 per million BTU, drilling efficiencies and the relatively low cost of drilling materials, equipment and services. In addition, the agreement by OPEC and some non-OPEC countries late last year to cut production in order to accelerate the rebalancing of supply and demand and reduce excess inventory levels has reinforced confidence that the current level of oil prices can be sustained. In the rest of the world, exploration and production spending plans are more subdued. In offshore areas, operators have begun to move forward with selected projects but the overall level of spending is expected to decline for a third successive year as the previous backlog of investments sanctioned prior to 2015 are completed. Onshore spending is expected to be more stable and should begin to recover in regions such as Colombia. Our sales should rise steadily through the year based on higher demand from Rig Direct™ customers in North America and a strong backlog of orders for the Eastern Hemisphere. Although prices have begun to rise in North America, increases in our average selling prices will be held back by the prices fixed in our Eastern Hemisphere backlog. Our EBITDA, following a first quarter in line with this fourth quarter, should also rise steadily through the year with margins improving in the second half based on a better absorption of fixed costs. †Tubes Operating income includes severance charges of $7 million in Q4 2016, $9 million in Q3 2016 and $28 million in Q4 2015. Net sales of tubular products and services declined 24% year on year but increased 7% sequentially. Sequentially, the increase in sales in North America, reflects an increase in drilling activity and sales in Canada and higher sales of line pipe products for US onshore applications. In South America, sales declined mainly due to lower drilling activity and sales of OCTG products in Argentina. In Europe we had seasonally lower sales in the North Sea largely compensated by higher sales to hydrocarbon process industry and power generation customers. In the Middle East and Africa, we had higher sales throughout the Middle East partially offset by lower sales of OCTG products for offshore drilling in Africa. In Asia Pacific we had higher Rig Direct™ sales in Thailand partially offset by lower sales in the rest of the region. Operating income from tubular products and services decreased 4% year on year but recovered from the previous quarter loss. Tubes operating income improved due to an increase in volumes, particularly seamless, and a reduction in costs that compensate the price reduction and lower selling, general and administrative expenses. Net sales of other products and services decreased 22% year on year and 9% sequentially. The sequential decline is mainly due to lower sales of industrial equipment in Brazil and of energy related products, i.e., sucker rods and coiled tubing. The year on year decline in sales was mainly due to a decline in sales of industrial equipment in Brazil. Selling, general and administrative expenses, or SG&A, amounted to $280 million, 26.8% of net sales in the fourth quarter of 2016, compared to $304 million, 30.9% in the previous quarter and $362 million, 26.4% in the fourth quarter of 2015. Sequentially SG&A declined 8% mainly due to lower charges on the allowance for doubtful accounts and lower labor costs. Year on year, SG&A expenses declined 23% and remained relatively stable as a percentage of sales. Other operating income (expense) amounted to a loss of $2 million in the fourth quarter of 2016, compared to a gain of $17 million in the previous quarter and a loss of $3 million in the fourth quarter of 2015. Financial results amounted to a gain of $23 million in the fourth quarter of 2016, compared to a gain of $4 million in the previous quarter and a gain of $19 million in the fourth quarter of 2015. The sequential increase in the financial result is mainly due to net foreign exchange transactions results due to the effect of the Euro devaluation on Euro denominated intercompany-debt in subsidiaries with functional currency US dollar. This results are to a large extent offset in equity, in the currency translation adjustment reserve. Equity in earnings of non-consolidated companies generated a gain of $15 million in the fourth quarter of 2016, compared to a gain of $27 million in the previous quarter and a loss of $46 million in the same period of 2015. These results are mainly derived from our equity investment in Ternium ( : TX). Income tax charges totaled $27 million in the fourth quarter of 2016, primarily reflecting the Mexican and the Colombian peso devaluation on the tax base for deferred tax calculation. Income from discontinued operations amounted to $8 million in the fourth quarter of 2016, $12 million in the previous quarter and $5 million in the fourth quarter of 2015. This income corresponds to the North American electric conduit business sold to Nucor, which was classified as a discontinued operation following the conclusion of an agreement to sell this business on December 15, 2016 and closing the transaction in January 2017. Results attributable to non-controlling interests amounted to a loss of $9 million in the fourth quarter of 2016, compared to a loss of $1 million in the previous quarter and a gain of $2 million in the fourth quarter of 2015. These results are mainly attributable to our Japanese subsidiary, NKKTubes, while in the previous quarter they included also gains from our pipe coating subsidiary in Nigeria. Net cash used in operations during the fourth quarter of 2016 was $79 million, compared to cash generated of $254 million in the previous quarter and $203 million in the fourth quarter of 2015. Working capital increased by $211 million during the fourth quarter of 2016. Capital expenditures amounted to $158 million for the fourth quarter of 2016, compared to $187 million in the previous quarter and $307 million in the fourth quarter of 2015. During the quarter, our net cash position declined by $408 million to $1.4 billion at the end of the year, following the payment of an interim dividend of $153 million in November 2016. †Tubes operating income includes severance charges of $67 million in 2016 and $164 million in 2015. Additionally Operating income in 2015 includes an impairment charge of $400 million on our welded pipe operations in the United States. Net sales of tubular products and services decreased 38% to $4,015 million in 2016, compared to $6,444 million in 2015, reflecting a 24% decline in volumes and an 18% decrease in average selling prices. Sales were negatively affected by the adjustment in oil and gas drilling activity in response to the collapse in oil and gas prices, inventory adjustments and price declines, together with a decline of shipments to line pipe project in South America. In North America, our sales decreased 50%, due to the downturn in activity, inventory adjustments and lower prices. In South America, sales declined 44% due to the downturn in drilling activity in Argentina and Colombia, price declines and the lack of shipments to line pipe project in Argentina and Brazil following the first quarter sales. In Europe, sales declined 22% due to lower drilling activity and price declines but sales of industrial products and to hydrocarbon process industry and power generation customers were maintained at similar levels to those of 2015. In the Middle East and Africa sales declined 4% as shipments to Middle East customers and sales of offshore line pipe and coating services in Africa increased strongly but sales were affected by price declines and severely reduced offshore drilling activity and inventory adjustments in Africa. In Asia Pacific, sales were affected by lower drilling activity in Indonesia and the rest of the region, price declines, and lower sales of non-OCTG products in the region. Operating (loss) from tubular products and services, amounted to $71 million, compared to a $138 million gain in 2015. The decline in Tubes operating income was due to lower sales and a reduction in gross margin from 32% in 2015 to 27% in 2016. Additionally, our SG&A expenses as a percentage of sales increased from 24% in 2015 to 29% in 2016, due to the negative effect of fixed and semi-fixed expenses on lower sales. Net sales of other products and services decreased 39% to $278 million in 2016, compared to $459 million in 2015, due to lower sales of industrial equipment in Brazil and lower sales of energy related products, i.e., sucker rods and coiled tubing. Operating income from other products and services, decreased 57% to $12 million in 2016, from $28 million in 2015, mainly due to lower operating income from our sucker rods business. Selling, general and administrative expenses, or SG&A, decreased by $ 397 million (25%) in 2016 from $1,594 million in 2015 to $1,197 million in 2016. However, SG&A expenses increased as a percentage of net sales to 27.9% in 2016 compared to 23.1% in 2015, mainly due to the effect of fixed and semi fixed expenses on lower sales (e.g., depreciation and amortization and labor costs). Other operating income and expenses resulted in a gain of $10 million in 2016, compared to a loss of $396 million in 2015, mainly due to asset impairment charges amounting to $400 million in 2015. Financial results amounted to a gain of $22 million in 2016, compared to a gain of $15 million in 2015. Equity in earnings (losses) of non-consolidated companies generated a gain of $72 million in 2016, compared to a loss of $40 million in 2015. During 2015 we recorded an impairment charge of $29 million on our direct investment in Usiminas. Apart from the impairment result in 2015, these results were mainly derived from our equity investment in Ternium ( : TX). Net income for the year amounted to $59 million in 2016, including a gain from discontinued operations of $41 million, compared with a loss of $74 million, including a gain from discontinued operations of $19 million. Net income from continuing operations amounted to a gain of $17 million in 2016, which compares with a loss of $94 million in 2015. The loss in 2015 included an impairment charge of $400 million. Results in 2016 and 2015 reflect a challenging operating environment affected by a reduction in drilling activity and in the demand for OCTG products, deriving in lower shipments and prices, inefficiencies associated with low utilization of production capacity and severance costs to adjust the workforce to the new market conditions. Income attributable to non-controlling interest was $3 million in 2016, compared to $6 million in 2015. These results are mainly attributable to NKKTubes, our Japanese subsidiary. Net cash provided by operations during 2016 was $864 million, compared to $2.2 billion during 2015. During 2016 the reduction in working capital amounted to $348 million, compared to a reduction of $1.4 billion in 2015. Capital expenditures amounted to $787 million in 2016, compared to $1.1 billion in 2015. Dividends paid amounted to $508 million during 2016, compared to $531 million during 2015. During 2016, our net cash position declined from $1.8 billion at the beginning of the year to $1.4 billion at December 31, 2016. Tenaris will hold a conference call to discuss the above reported results, on February 23, 2017, at 08:00 a.m. (Eastern Time). Following a brief summary, the conference call will be opened to questions. To access the conference call dial in +1 877 730.0732 within North America or +1 530 379.4676 Internationally. The access number is "63007433". Please dial in 10 minutes before the scheduled start time. The conference call will be also available by webcast at www.tenaris.com/investors. A replay of the conference call will be available on our webpage http://ir.tenaris.com/ or by phone from 11:00 am ET on February 23 through 11:59 pm on March 3. To access the replay by phone, please dial +1 855 859.2056 or +1 404 537.3406 and enter passcode " 63007433" when prompted. Some of the statements contained in this press release are "forward-looking statements". Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to future oil and gas prices and their impact on investment programs by oil and gas companies. EBITDA provides an analysis of the operating results excluding depreciation and amortization and impairments, as they are non-cash variables which can vary substantially from company to company depending on accounting policies and the accounting value of the assets. EBITDA is an approximation to pre-tax operating cash flow and reflects cash generation before working capital variation. EBITDA is widely used by investors when evaluating businesses (multiples valuation), as well as by rating agencies and creditors to evaluate the level of debt, comparing EBITDA with net debt. EBITDA is calculated in the following manner: This is the net balance of cash and cash equivalents, other current investments and fixed income investments held to maturity less total borrowings. It provides a summary of the financial solvency and liquidity of the company. Net cash / (debt) is widely used by investors and rating agencies and creditors to assess the company's leverage, financial strength, flexibility and risks. Net cash/ debt is calculated in the following manner: Net cash/debt = Cash and cash equivalents + Other investments (Current)+ Fixed income investments held to maturity - Borrowings (Current and Non-current). Free cash flow is a measure of financial performance, calculated as operating cash flow less capital expenditures. FCF represents the cash that a company is able to generate after spending the money required to maintain or expand its asset base. Free cash flow is calculated in the following manner: Free cash flow= Net cash (used in) provided by operating activities - Capital expenditures.

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