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Ternium Announces Third Quarter and First Nine Months of 2020 Results

·24-min read


Luxembourg, 11/03/2020 / 16:15, EST/EDT - EQS Newswire - Ternium S.A.


LEXEMBOURG / ACCESSWIRE / November 3, 2020 / Ternium S.A. (NYSE:TX) today announced its results for the third quarter and first nine months ended September 30, 2020.

The financial and operational information contained in this press release is based on Ternium S.A.'s

operational data and consolidated condensed interim financial statements prepared in accordance with IAS 34 "Interim financial reporting" (IFRS) and presented in U.S. dollars ($) and metric tons.

Summary of Third Quarter of 2020 Results

Ternium's main markets rebounded in the third quarter of 2020 from their trough during the second quarter. Total steel shipments in the third quarter reached 2.8 million tons, up 16% on a sequential basis, with higher finished steel shipments in the company's key markets partially offset by lower slab shipments to third parties. Shipments in the third quarter were down 7% over the same period in 2019.

In Mexico, the company's main steel market, shipments recovered 23% sequentially to 1.4 million tons. The country's manufacturing industries continued ramping up their facilities during the third quarter, and activity in the construction sector slightly improved. Compared to the same period in 2019, shipments in Mexico were down 11% in the third quarter of 2020.

In the Southern Region, Ternium's shipments reached 547,000 tons in the third quarter of 2020, increasing 59% on a sequential basis from a very weak second quarter. On an year-over-year basis, shipments increased 9%.

In the Other Markets region, Ternium's finished steel shipments in the third quarter of 2020 increased sequentially and on an year-over-year basis, with a return to pre-pandemic levels in Colombia and continued strong demand in the US market. During the third quarter of 2020 the company's slab facility in Brazil returned to full capacity from minimum utilization rates in April, significantly increasing its integration with other Ternium's mills.

The company's EBITDA per ton in the third quarter of 2020 was $124, increasing $33 on a sequential basis, mainly reflecting an increase in revenue per ton mostly due to a higher value added product mix, partially offset by a slight increase in operating cost per ton. On an year-over-year basis, EBITDA per ton levels were similar.

Summary of First Nine Months of 2020 Results

Ternium's steel shipments in the first nine months of 2020 were 8.3 million tons, down 1.3 million tons compared to the same period in 2019 reflecting lower activity in the context of the COVID-19 outbreak. Shipments in the first nine months of 2020 decreased 10% in Mexico, 13% in the Southern Region and 19% in the Other Markets region.

EBITDA per ton decreased $26 year-over-year to $106, mainly reflecting lower steel prices, partially offset by lower cost per ton, which decreased due to lower purchased slab, raw material and energy costs and the positive impact on costs of weak local currencies vis-a-vis the U.S. dollar, partially offset by the negative impact on costs of lower mill utilization rates.

The company's net earnings in the first nine months of 2020 were $197.2 million, including a $77.8 million net financial result gain, mainly reflecting the Mexican peso and Brazilian real depreciation of 16% and 29%, respectively, against the U.S. dollar in the first nine months of 2020, and a $141.2 million non-cash deferred tax loss in connection with the depreciation of the Mexican peso in the period.

COVID-19 Update

During the third quarter of 2020, the pandemic's impact on steel demand in the Americas lessened significantly, allowing all of Ternium's industrial facilities to return to normal production rates. In addition, Ternium restarted several of its capital expenditure projects, including the continued construction of a new hot-rolling mill at the company's industrial center in Pesquería, Mexico and the final commissioning of a greenfield rebar facility in Colombia.

Though shipment levels in all of Ternium's markets are currently strong, uncertainty persists about the future course of the COVID-19 pandemic and related countermeasures in markets around the world.

Outlook

Ternium expects EBITDA in the fourth quarter of 2020 to increase compared to EBITDA in the third quarter of 2020, due to higher shipments and realized steel prices in its key markets.

In Mexico, the company anticipates steel volumes returning to pre-pandemic levels in the fourth quarter of 2020, as well as a continued recovery of shipments to the automotive, household appliances and HVAC industries driven by solid end-user demand in the U.S. market. Shipments to the construction market are also expected to sequentially improve, with steady demand from small construction and various governmental infrastructure projects.

In the Southern Region, following record-low shipments in the second quarter of 2020, volumes increased by 59% in the third quarter of 2020. Specifically in Argentina, this recovery was supported by advances in durable goods purchases and a buildup in building materials in the private construction sector. If this market dynamic persists throughout the rest of the year, it could support an additional sequential shipment increase in the Argentine market.

Ternium expects slab shipments from its facility in Brazil to remain stable in the fourth quarter of 2020 compared to levels in the third quarter, with a continued increase in domestic sales substituting exports to third parties, reflecting a faster than expected recovery in Brazilian domestic steel consumption.

Analysis of Third Quarter of 2020 Results

Net sales in the third quarter of 2020 were $2.1 billion, 13% lower than net sales in the third quarter of 2019. The following table outlines Ternium's consolidated net sales for the third quarter of 2020 and the third quarter of 2019:

* The item "Other products" primarily includes Ternium Brasil's and Ternium México's electricity sales.

Cost of sales was $1.8 billion in the third quarter of 2020, a decrease of $259.8 million compared to the third quarter of 2019. This was principally due to a $215.8 million, or 14%, decrease in raw material and consumables used, reflecting a 7% decrease in steel shipment volumes and lower purchased slabs, raw material and energy costs; and to a $44.0 million decrease in other costs, mainly including a $21.1 million decrease in labor costs, a $13.6 million decrease in services and fees and a $10.9 decrease in maintenance expenses.

Selling, General & Administrative (SG&A) expenses in the third quarter of 2020 were $183.1 million, or 9% of net sales, a decrease of $28.8 million compared to SG&A expenses in the third quarter of 2019 mainly due to a $9.6 million decrease in amortization of intangible assets, an $8.3 million decrease in labor costs, a $7.9 million decrease in services and fees and a $2.9 million decrease in offices expenses.

Operating income in the third quarter of 2020 was $201.0 million compared to operating income of $228.6 million in the third quarter of 2019 representing a steady rate of 9% of the net sales. The following table outlines Ternium's operating income by segment for the third quarter of 2020 and third quarter of 2019:

Net financial results were a $13.7 million loss in the third quarter of 2020, compared to a $34.9 million loss in the third quarter of 2019.

Equity in results of non-consolidated companies was a gain of $13.2 million in the third quarter of 2020, compared to a gain of $1.9 million in the third quarter of 2019 mainly due to positive results in Ternium investment in Usiminas and Techgen.

Income tax expense in the third quarter of 2020 was $27.5 million compared to $83.6 million in the third quarter of 2019. Income tax in the third quarter of 2020 included a $24.9 million non-cash gain on deferred taxes due to the appreciation of the Mexican peso against the U.S. dollar, which reduces, in U.S. dollar terms, the tax base used to calculate deferred taxes at our Mexican subsidiaries (which have the U.S dollar as their functional currency).

Analysis of First Nine Months of 2020 Results

Net sales in the first nine months of 2020 were $6.2 billion, 22% lower than net sales in the first nine months of 2019. The following table outlines Ternium's consolidated net sales for the first nine months of 2020 and the first nine months of 2019:

* The item "Other products" primarily includes Ternium Brasil's and Ternium México's electricity sales.

Cost of sales was $5.2 billion in the first nine months of 2020, a decrease of $1.3 billion compared to the first nine months of 2019. This was principally due to a $1.1 billion, or 22%, decrease in raw material and consumables used, mainly reflecting a 14% decrease in steel shipment volumes and lower purchased slabs, raw material and energy costs; and to a $195.7 million decrease in other costs, mainly including a $92.4 million decrease in maintenance expenses, a $79.7 million decrease in labor costs and a $33.5 million decrease in services and fees partially compensated by $14.3 increase in depreciation of property, plant and equipment.

Selling, General & Administrative (SG&A) expenses in the first nine months of 2020 were $566.1 million, or 9% of net sales, a decrease of $108.4 million compared to SG&A expenses in the first nine months of 2019 mainly due to $25.8 million decrease in labor costs, a $25.7 million decrease in amortization of intangible assets, a $21.5 million decrease in freight and transportation, a $16.8 million decrease in services and fees and a $11.5 million decrease in taxes.

Operating income in the first nine months 2020 was $402.3 million, or 7% of net sales, compared to operating income of $772.3 million, or 10% of net sales in the first nine months 2019. The following table outlines Ternium's operating income by segment for the first nine months of 2020 and first nine months of 2019:

Net financial results were a $77.8 million gain in the first nine months of 2020, mainly reflecting the positive impact of the Mexican peso and Brazilian real depreciation against the U.S. dollar, of 16% and 29% respectively in the period, on a net short local currency position at Ternium's Mexican and Brazilian subsidiaries. In the first nine months of 2019, net financial results were a loss of $68.9 million.

Equity in results of non-consolidated companies was a loss of $0.4 million in the first nine months of 2020, compared to a gain of $37.1 million in the same period in 2019 mainly due to negative results in Usiminas investment.

Income tax expense in the first nine months of 2020 was $282.5 million compared to $200.4 million in the first nine months of 2019. Income tax in the first nine months of 2020 included a $141.2 million non-cash loss on deferred taxes due to the significant depreciation of the Mexican peso against the U.S. dollar, which changes, in U.S. dollar terms, the tax base used to calculate deferred taxes at our Mexican subsidiaries (which have the U.S dollar as their functional currency).

Cash Flow and Liquidity

Net cash provided by operating activities in the first nine months of 2020 was $1.4 billion. Working capital decreased by $628.1 million in the first nine months of 2020 as a result of a $491.0 million decrease in inventories and an aggregate $142.1 million decrease in trade and other receivables, partially offset by an aggregate $4.9 million net decrease in accounts payable and other liabilities. The inventory value decrease in the first nine months of 2020 was due to a $259.6 million lower steel volume, a $134.1 million inventory value decrease in raw materials, supplies and other, and a $97.3 million lower cost of steel.

Capital expenditures in the first nine months of 2020 were $439.6 million, $305.3 million lower than in the first nine months of 2019 as Ternium has slowed or postponed several projects across its facilities, including its new hot-rolling mill in the company's Pesquería industrial center in Mexico. The main investments carried out during the first nine months of 2020 included those made for the new hot-rolling mill, the capacity expansion of the pulverized coal injection system in the company's Rio de Janeiro unit in Brazil, and projects aimed at further improving environmental and safety conditions throughout our main facilities.

In the first nine months of 2020, Ternium's free cash flow reached $1.0 billion and net repayment of borrowings were $313.9 million. As of September 30, 2020, Ternium had a net debt position of $562.4 million.

Net cash provided by operating activities in the third quarter of 2020 was $460.0 million. Working capital decreased by $140.6 million in the third quarter 2020 as a result of a $136.6 million decrease in inventories and an aggregate $77.3 million net increase in accounts payable and other liabilities, partially offset by an aggregate $73.4 million increase in trade and other receivables. The inventory value decrease in the third quarter of 2020 was due to a $58.8 million lower cost of steel, a $58.0 million lower steel volume and a $19.7 million inventory value decrease in raw materials, supplies and other. In the third quarter of 2020, Ternium's free cash flow was $388.8 million and net repayment of borrowings were $214.5 million.

Conference Call and Webcast

Ternium will host a conference call on November 4, 2020, at 11:00 a.m. ET in which management will discuss third quarter and first nine months of 2020 results. A webcast link will be available in the Investor Center section of the company's website at www.ternium.com.

Forward Looking Statements

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.

About Ternium

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, HVAC, construction, capital goods, container, food and energy industries through its manufacturing facilities, service center and distribution networks, and advanced customer integration systems. More information about Ternium is available at www.ternium.com.

Notes

Consolidated Income Statement

Consolidated Statement of Financial Position

Consolidated Statement of Cash Flows

Shipments

Revenue / ton 

Net Sales 

1 The item "Other products" primarily includes Ternium Brasil's and Ternium México's electricity sales.

SOURCE: Ternium S.A.



11/03/2020 EQS Newswire / EQS Group AG


 

 

3Q2020

 

 

2Q2020

 

 

3Q2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel Shipments (tons)

 

 

2,845,000

 

 

 

2,449,000

 

 

 

16

%

 

 

3,057,000

 

 

 

-7

%

Iron Ore Shipments (tons)

 

 

869,000

 

 

 

991,000

 

 

 

-12

%

 

 

904,000

 

 

 

-4

%

Net Sales ($ million)

 

 

2,138.6

 

 

 

1,745.8

 

 

 

23

%

 

 

2,449.7

 

 

 

-13

%

Operating Income ($ million)

 

 

201.0

 

 

 

65.6

 

 

 

207

%

 

 

228.6

 

 

 

-12

%

EBITDA1 ($ million)

 

 

353.4

 

 

 

223.9

 

 

 

58

%

 

 

388.0

 

 

 

-9

%

EBITDA Margin (% of net sales)

 

 

17

%

 

 

13

%

 

 

 

 

 

 

16

%

 

 

 

 

EBITDA per Ton2 ($)

 

 

124.2

 

 

 

91.4

 

 

 

 

 

 

 

126.9

 

 

 

 

 

Financial Result, Net ($ million)

 

 

(13.7

)

 

 

(14.6

)

 

 

 

 

 

 

(34.9

)

 

 

 

 

Income Tax Result ($ million)

 

 

(27.5

)

 

 

12.3

 

 

 

 

 

 

 

(83.6

)

 

 

 

 

Net Result ($ million)

 

 

173.0

 

 

 

43.6

 

 

 

 

 

 

 

111.9

 

 

 

 

 

Equity Holders' Net Result ($ million)

 

 

145.6

 

 

 

44.0

 

 

 

 

 

 

 

95.3

 

 

 

 

 

Earnings per ADS3 ($)

 

 

0.74

 

 

 

0.22

 

 

 

 

 

 

 

0.49

 

 

 

 

 

 

 

 

9M2020

 

 

 

9M2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel Shipments (tons)

 

 

8,292,000

 

 

 

9,594,000

 

 

 

-14

%

Iron Ore Shipments (tons)

 

 

2,854,000

 

 

 

2,659,000

 

 

 

7

%

Net Sales ($ million)

 

 

6,155.8

 

 

 

7,942.8

 

 

 

-22

%

Operating Income ($ million)

 

 

402.3

 

 

 

772.3

 

 

 

-48

%

EBITDA6 ($ million)

 

 

879.3

 

 

 

1,262.6

 

 

 

-30

%

EBITDA Margin (% of net sales)

 

 

14

%

 

 

16

%

 

 

 

 

EBITDA per Ton ($)

 

 

106.0

 

 

 

131.6

 

 

 

 

 

Financial Result, Net ($ million)

 

 

77.8

 

 

 

(68.9

)

 

 

 

 

Income Tax Result ($ million)

 

 

(282.5

)

 

 

(200.4

)

 

 

 

 

Net Result ($ million)

 

 

197.2

 

 

 

540.1

 

 

 

 

 

Equity Holders' Net Result ($ million)

 

 

178.1

 

 

 

493.8

 

 

 

 

 

Earnings per ADS ($)

 

 

0.91

 

 

 

2.52

 

 

 

 

 

 

 

Net Sales (million $)

 

 

Shipments (thousand tons)

 

 

Revenue/ton ($/ton)

 

 

 

3Q2020

 

 

3Q2019

 

 

Dif.

 

 

3Q2020

 

 

3Q2019

 

 

Dif.

 

 

3Q2020

 

 

3Q2019

 

 

Dif.

 

Mexico

 

 

1,065.7

 

 

 

1,334.9

 

 

 

-20

%

 

 

1,445

 

 

 

1,629

 

 

 

-11

%

 

 

737

 

 

 

820

 

 

 

-10

%

Southern Region

 

 

495.6

 

 

 

435.9

 

 

 

14

%

 

 

547

 

 

 

504

 

 

 

9

%

 

 

906

 

 

 

865

 

 

 

5

%

Other Markets

 

 

508.0

 

 

 

595.1

 

 

 

-15

%

 

 

853

 

 

 

924

 

 

 

-8

%

 

 

596

 

 

 

644

 

 

 

-7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total steel products

 

 

2,069.4

 

 

 

2,365.8

 

 

 

-13

%

 

 

2,845

 

 

 

3,057

 

 

 

-7

%

 

 

727

 

 

 

774

 

 

 

-6

%

Other products*

 

 

45.6

 

 

 

83.9

 

 

 

-46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel segment

 

 

2,114.9

 

 

 

2,449.7

 

 

 

-14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mining segment

 

 

91.3

 

 

 

111.7

 

 

 

-18

%

 

 

869

 

 

 

904

 

 

 

-4

%

 

 

105

 

 

 

124

 

 

 

-15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment eliminations

 

 

(67.6

)

 

 

(111.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

2,138.6

 

 

 

2,449.7

 

 

 

-13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel segment

 

 

Mining segment

 

 

Intersegment
eliminations

 

 

Total

 

$ million

 

3Q2020

 

 

3Q2019

 

 

3Q2020

 

 

3Q2019

 

 

3Q2020

 

 

3Q2019

 

 

3Q2020

 

 

3Q2019

 

Net Sales

 

 

2,114.9

 

 

 

2,449.7

 

 

 

91.3

 

 

 

111.7

 

 

 

(67.6

)

 

 

(111.7

)

 

 

2,138.6

 

 

 

2,449.7

 

Cost of sales

 

 

(1,762.2

)

 

 

(2,065.1

)

 

 

(60.2

)

 

 

(61.6

)

 

 

65.9

 

 

 

110.3

 

 

 

(1,756.6

)

 

 

(2,016.4

)

SG&A expenses

 

 

(175.4

)

 

 

(208.2

)

 

 

(7.7

)

 

 

(3.7

)

 

 

-

 

 

 

-

 

 

 

(183.1

)

 

 

(211.9

)

Other operating income, net

 

 

1.8

 

 

 

6.9

 

 

 

0.2

 

 

 

0.3

 

 

 

-

 

 

 

-

 

 

 

2.0

 

 

 

7.2

 

Operating income

 

 

179.2

 

 

 

183.3

 

 

 

23.5

 

 

 

46.7

 

 

 

(1.7)

 

 

 

(1.4)

 

 

 

201.0

 

 

 

228.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

318.7

 

 

 

330.7

 

 

 

36.4

 

 

 

58.7

 

 

 

(1.7)

 

 

 

(1.4)

 

 

 

353.4

 

 

 

388.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales (million $)

 

 

Shipments (thousand tons)

 

 

Revenue/ton ($/ton)

 

 

 

9M2020

 

 

9M2019

 

 

Dif.

 

 

9M2020

 

 

9M2019

 

 

Dif.

 

 

9M2020

 

 

9M2019

 

 

Dif.

 

Mexico

 

 

3,186.1

 

 

 

4,129.4

 

 

 

-23

%

 

 

4,269

 

 

 

4,761

 

 

 

-10

%

 

 

746

 

 

 

867

 

 

 

-14

%

Southern Region

 

 

1,129.2

 

 

 

1,252.6

 

 

 

-10

%

 

 

1,270

 

 

 

1,454

 

 

 

-13

%

 

 

889

 

 

 

862

 

 

 

3

%

Other Markets

 

 

1,654.7

 

 

 

2,316.5

 

 

 

-29

%

 

 

2,753

 

 

 

3,379

 

 

 

-19

%

 

 

601

 

 

 

686

 

 

 

-12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total steel products

 

 

5,970.0

 

 

 

7,698.6

 

 

 

-22

%

 

 

8,292

 

 

 

9,594

 

 

 

-14

%

 

 

720

 

 

 

802

 

 

 

-10

%

Other products*

 

 

132.3

 

 

 

244.2

 

 

 

-46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel segment

 

 

6,102.3

 

 

 

7,942.8

 

 

 

-23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mining segment

 

 

284.8

 

 

 

264.3

 

 

 

8

%

 

 

2,854

 

 

 

2,659

 

 

 

7

%

 

 

100

 

 

 

99

 

 

 

0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment eliminations

 

 

(231.3

)

 

 

(264.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

6,155.8

 

 

 

7,942.8

 

 

 

-22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel segment

 

 

Mining segment

 

 

Intersegment
eliminations

 

 

Total

 

$ million

 

9M2020

 

 

9M2019

 

 

9M2020

 

 

9M2019

 

 

9M2020

 

 

9M2019

 

 

9M2020

 

 

9M2019

 

Net Sales

 

 

6,102.3

 

 

 

7,942.8

 

 

 

284.8

 

 

 

264.3

 

 

 

(231.3

)

 

 

(264.3

)

 

 

6,155.8

 

 

 

7,942.8

 

Cost of sales

 

 

(5,223.3

)

 

 

(6,587.0

)

 

 

(195.0

)

 

 

(186.2

)

 

 

232.5

 

 

 

264.1

 

 

 

(5,185.8

)

 

 

(6,509.1

)

SG&A expenses

 

 

(547.8

)

 

 

(663.2

)

 

 

(18.4

)

 

 

(11.4

)

 

 

-

 

 

 

-

 

 

 

(566.1

)

 

 

(674.5

)

Other operating (loss) income, net

 

 

(0.9

)

 

 

13.6

 

 

 

(0.6

)

 

 

(0.4

)

 

 

-

 

 

 

-

 

 

 

(1.5

)

 

 

13.2

 

Operating income

 

 

330.2

 

 

 

706.2

 

 

 

70.8

 

 

 

66.3

 

 

 

1.2

 

 

 

(0.2)

 

 

 

402.3

 

 

 

772.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

771.2

 

 

 

1,161.1

 

 

 

106.9

 

 

 

101.7

 

 

 

1.2

 

 

 

(0.2)

 

 

 

879.3

 

 

 

1,262.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ million

 

3Q2020

 

 

3Q2019

 

 

9M2020

 

 

9M2019

 

 

 

 

 

 

 

Net sales

 

 

2,138.6

 

 

 

2,449.7

 

 

 

6,155.8

 

 

 

7,942.8

 

Cost of sales

 

 

(1,756.6

)

 

 

(2,016.4

)

 

 

(5,185.8

)

 

 

(6,509.1

)

Gross profit

 

 

382.1

 

 

 

433.3

 

 

 

969.9

 

 

 

1,433.7

 

Selling, general and administrative expenses

 

 

(183.1

)

 

 

(211.9

)

 

 

(566.1

)

 

 

(674.5

)

Other operating income (expense), net

 

 

2.0

 

 

 

7.2

 

 

 

(1.5

)

 

 

13.2

 

Operating income

 

 

201.0

 

 

 

228.6

 

 

 

402.3

 

 

 

772.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance expense

 

 

(9.0

)

 

 

(25.6

)

 

 

(38.9

)

 

 

(66.8

)

Finance income

 

 

15.9

 

 

 

9.0

 

 

 

30.9

 

 

 

21.4

 

Other financial (expenses) income, net

 

 

(20.6

)

 

 

(18.3

)

 

 

85.8

 

 

 

(23.5

)

Equity in earnings (losses) of non-consolidated companies

 

 

13.2

 

 

 

1.9

 

 

 

(0.4

)

 

 

37.1

 

Profit before income tax expense

 

 

200.5

 

 

 

195.6

 

 

 

479.7

 

 

 

740.5

 

Income tax expense

 

 

(27.5

)

 

 

(83.6

)

 

 

(282.5

)

 

 

(200.4

)

Profit for the period

 

 

173.0

 

 

 

111.9

 

 

 

197.2

 

 

 

540.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the parent

 

 

145.6

 

 

 

95.3

 

 

 

178.1

 

 

 

493.8

 

Non-controlling interest

 

 

27.4

 

 

 

16.6

 

 

 

19.2

 

 

 

46.3

 

Profit for the period

 

 

173.0

 

 

 

111.9

 

 

 

197.2

 

 

 

540.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ million

 

September 30,2020

 

 

December 31, 2019

 

 

 

(Unaudited)

 

 

 

 

Property, plant and equipment, net

 

 

6,525.8

 

 

 

6,539.6

 

Intangible assets, net

 

 

908.3

 

 

 

943.8

 

Investments in non-consolidated companies

 

 

393.5

 

 

 

513.6

 

Deferred tax assets

 

 

126.8

 

 

 

163.5

 

Receivables, net

 

 

267.8

 

 

 

592.6

 

Trade receivables, net

 

 

0.1

 

 

 

0.9

 

Other investments

 

 

2.9

 

 

 

3.3

 

Total non-current assets

 

 

8,225.2

 

 

 

8,757.3

 

 

 

 

 

 

 

 

 

 

Receivables, net

 

 

217.0

 

 

 

334.7

 

Derivative financial instruments

 

 

1.5

 

 

 

1.2

 

Inventories, net

 

 

1,667.3

 

 

 

2,158.3

 

Trade receivables, net

 

 

776.3

 

 

 

949.7

 

Other investments

 

 

623.2

 

 

 

212.3

 

Cash and cash equivalents

 

 

680.7

 

 

 

520.0

 

Total current assets

 

 

3,965.9

 

 

 

4,176.1

 

 

 

 

 

 

 

 

 

 

Non-current assets classified as held for sale

 

 

1.9

 

 

 

2.1

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

12,193.0

 

 

 

12,935.5

 

 

 

 

 

 

 

 

 

 

Capital and reserves attributable to the owners of the parent

 

 

6,686.1

 

 

 

6,611.7

 

Non-controlling interest

 

 

1,091.0

 

 

 

1,103.2

 

 

 

 

 

 

 

 

 

 

Total Equity

 

 

7,777.1

 

 

 

7,714.9

 

 

 

 

 

 

 

 

 

 

Provisions

 

 

256.4

 

 

 

613.4

 

Deferred tax liabilities

 

 

469.2

 

 

 

403.3

 

Other liabilities

 

 

447.4

 

 

 

507.6

 

Trade payables

 

 

1.0

 

 

 

1.2

 

Derivative financial instruments

 

 

0.5

 

 

 

-

 

Lease liabilities

 

 

257.6

 

 

 

298.2

 

Borrowings

 

 

1,457.4

 

 

 

1,628.9

 

Total non-current liabilities

 

 

2,889.6

 

 

 

3,452.5

 

 

 

 

 

 

 

 

 

 

Current income tax liabilities

 

 

36.2

 

 

 

47.1

 

Other liabilities

 

 

215.6

 

 

 

240.9

 

Trade payables

 

 

824.6

 

 

 

876.8

 

Derivative financial instruments

 

 

0.1

 

 

 

3.0

 

Lease liabilities

 

 

41.2

 

 

 

40.5

 

Borrowings

 

 

408.8

 

 

 

559.8

 

Total current liabilities

 

 

1,526.4

 

 

 

1,768.1

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

4,416.0

 

 

 

5,220.7

 

 

 

 

 

 

 

 

 

 

Total equity and liabilities

 

 

12,193.0

 

 

 

12,935.5

 

 

 

 

 

 

 

 

 

 

$ million

 

3Q2020

 

 

3Q2019

 

 

9M2020

 

 

9M2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

 

 

173.0

 

 

 

111.9

 

 

 

197.2

 

 

 

540.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

152.4

 

 

 

159.4

 

 

 

477.1

 

 

 

490.3

 

Equity in (earnings) losses of non-consolidated companies

 

 

(13.2

)

 

 

(1.9

)

 

 

0.4

 

 

 

(37.1

)

Changes in provisions

 

 

-

 

 

 

0.4

 

 

 

(0.3

)

 

 

(2.3

)

Net foreign exchange results and others

 

 

58.8

 

 

 

20.3

 

 

 

(28.1

)

 

 

29.6

 

Interest accruals less payments

 

 

0.8

 

 

 

(1.5

)

 

 

4.6

 

 

 

3.0

 

Income tax accruals less payments

 

 

(52.4

)

 

 

14.8

 

 

 

127.4

 

 

 

(187.6

)

Changes in working capital

 

 

140.6

 

 

 

202.7

 

 

 

628.1

 

 

 

418.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

460.0

 

 

 

506.2

 

 

 

1,406.4

 

 

 

1,254.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(71.1

)

 

 

(255.9

)

 

 

(439.6

)

 

 

(744.8

)

Proceeds from the sale of property, plant & equipment

 

 

0.1

 

 

 

-

 

 

 

0.4

 

 

 

0.5

 

Acquisition of non-controlling interest

 

 

(2.8

)

 

 

(4.2

)

 

 

(14.1

)

 

 

(4.2

)

Loans to non-consolidated companies

 

 

-

 

 

 

-

 

 

 

-

 

 

 

24.5

 

Decrease (increase) in other Investments

 

 

84.3

 

 

 

(184.4

)

 

 

(410.5

)

 

 

(166.5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) investing activities

 

 

10.5

 

 

 

(444.4)

 

 

 

(863.9)

 

 

 

(890.5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends paid in cash to company's shareholders

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(235.6

)

Dividends paid in cash to non-controlling interest

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(28.5

)

Finance Lease Payments

 

 

(10.1

)

 

 

(9.0

)

 

 

(30.4

)

 

 

(28.6

)

Proceeds from borrowings

 

 

24.8

 

 

 

263.6

 

 

 

244.3

 

 

 

1,133.0

 

Repayments of borrowings

 

 

(239.4

)

 

 

(448.2

)

 

 

(558.2

)

 

 

(802.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by financing activities

 

 

(224.6)

 

 

 

(193.6)

 

 

 

(344.3)

 

 

 

38.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

 

245.8

 

 

 

(131.9)

 

 

 

198.2

 

 

 

402.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thousand tons

 

3Q2020

 

 

3Q2019

 

 

2Q2020

 

 

9M2020

 

 

9M2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

 

1,445

 

 

 

1,629

 

 

 

1,175

 

 

 

4,269

 

 

 

4,761

 

Southern Region

 

 

547

 

 

 

504

 

 

 

344

 

 

 

1,270

 

 

 

1,454

 

Other Markets

 

 

853

 

 

 

924

 

 

 

931

 

 

 

2,753

 

 

 

3,379

 

Total steel segment

 

 

2,845

 

 

 

3,057

 

 

 

2,449

 

 

 

8,292

 

 

 

9,594

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total mining segment

 

 

869

 

 

 

904

 

 

 

991

 

 

 

2,854

 

 

 

2,659

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$/ton

 

3Q2020

 

 

3Q2019

 

 

2Q2020

 

 

9M2020

 

 

9M2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

 

737

 

 

 

820

 

 

 

725

 

 

 

746

 

 

 

867

 

Southern Region

 

 

906

 

 

 

865

 

 

 

852

 

 

 

889

 

 

 

862

 

Other Markets

 

 

596

 

 

 

644

 

 

 

587

 

 

 

601

 

 

 

686

 

Total steel segment

 

 

727

 

 

 

774

 

 

 

690

 

 

 

720

 

 

 

802

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total mining segment

 

 

105

 

 

 

124

 

 

 

100

 

 

 

100

 

 

 

99

 

 

$ million

 

3Q2020

 

 

3Q2019

 

 

2Q2020

 

 

9M2020

 

 

9M2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

 

1,065.7

 

 

 

1,334.9

 

 

 

851.5

 

 

 

3,186.1

 

 

 

4,129.4

 

Southern Region

 

 

495.6

 

 

 

435.9

 

 

 

292.8

 

 

 

1,129.2

 

 

 

1,252.6

 

Other Markets

 

 

508.0

 

 

 

595.1

 

 

 

546.4

 

 

 

1,654.7

 

 

 

2,316.5

 

Total steel products

 

 

2,069.4

 

 

 

2,365.8

 

 

 

1,690.7

 

 

 

5,970.0

 

 

 

7,698.6

 

Other products1

 

 

45.6

 

 

 

83.9

 

 

 

42.5

 

 

 

132.3

 

 

 

244.2

 

Total steel segment

 

 

2,114.9

 

 

 

2,449.7

 

 

 

1,733.2

 

 

 

6,102.3

 

 

 

7,942.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total mining segment

 

 

91.3

 

 

 

111.7

 

 

 

98.7

 

 

 

284.8

 

 

 

264.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total steel and mining segments

 

 

2,206.2

 

 

 

2,561.4

 

 

 

1,831.9

 

 

 

6,387.1

 

 

 

8,207.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment eliminations

 

 

(67.6

)

 

 

(111.7

)

 

 

(86.1

)

 

 

(231.3

)

 

 

(264.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net sales

 

 

2,138.6

 

 

 

2,449.7

 

 

 

1,745.8

 

 

 

6,155.8

 

 

 

7,942.8

 

 

 

3Q2020

 

 

2Q2020

 

 

3Q2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel Shipments (tons)

 

 

2,845,000

 

 

 

2,449,000

 

 

 

16

%

 

 

3,057,000

 

 

 

-7

%

Iron Ore Shipments (tons)

 

 

869,000

 

 

 

991,000

 

 

 

-12

%

 

 

904,000

 

 

 

-4

%

Net Sales ($ million)

 

 

2,138.6

 

 

 

1,745.8

 

 

 

23

%

 

 

2,449.7

 

 

 

-13

%

Operating Income ($ million)

 

 

201.0

 

 

 

65.6

 

 

 

207

%

 

 

228.6

 

 

 

-12

%

EBITDA1 ($ million)

 

 

353.4

 

 

 

223.9

 

 

 

58

%

 

 

388.0

 

 

 

-9

%

EBITDA Margin (% of net sales)

 

 

17

%

 

 

13

%

 

 

 

 

 

 

16

%

 

 

 

 

EBITDA per Ton2 ($)

 

 

124.2

 

 

 

91.4

 

 

 

 

 

 

 

126.9

 

 

 

 

 

Financial Result, Net ($ million)

 

 

(13.7

)

 

 

(14.6

)

 

 

 

 

 

 

(34.9

)

 

 

 

 

Income Tax Result ($ million)

 

 

(27.5

)

 

 

12.3

 

 

 

 

 

 

 

(83.6

)

 

 

 

 

Net Result ($ million)

 

 

173.0

 

 

 

43.6

 

 

 

 

 

 

 

111.9

 

 

 

 

 

Equity Holders' Net Result ($ million)

 

 

145.6

 

 

 

44.0

 

 

 

 

 

 

 

95.3

 

 

 

 

 

Earnings per ADS3 ($)

 

 

0.74

 

 

 

0.22

 

 

 

 

 

 

 

0.49

 

 

 

 

 

 

 

 

9M2020

 

 

 

9M2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel Shipments (tons)

 

 

8,292,000

 

 

 

9,594,000

 

 

 

-14

%

Iron Ore Shipments (tons)

 

 

2,854,000

 

 

 

2,659,000

 

 

 

7

%

Net Sales ($ million)

 

 

6,155.8

 

 

 

7,942.8

 

 

 

-22

%

Operating Income ($ million)

 

 

402.3

 

 

 

772.3

 

 

 

-48

%

EBITDA6 ($ million)

 

 

879.3

 

 

 

1,262.6

 

 

 

-30

%

EBITDA Margin (% of net sales)

 

 

14

%

 

 

16

%

 

 

 

 

EBITDA per Ton ($)

 

 

106.0

 

 

 

131.6

 

 

 

 

 

Financial Result, Net ($ million)

 

 

77.8

 

 

 

(68.9

)

 

 

 

 

Income Tax Result ($ million)

 

 

(282.5

)

 

 

(200.4

)

 

 

 

 

Net Result ($ million)

 

 

197.2

 

 

 

540.1

 

 

 

 

 

Equity Holders' Net Result ($ million)

 

 

178.1

 

 

 

493.8

 

 

 

 

 

Earnings per ADS ($)

 

 

0.91

 

 

 

2.52

 

 

 

 

 

 

 

Net Sales (million $)

 

 

Shipments (thousand tons)

 

 

Revenue/ton ($/ton)

 

 

 

3Q2020

 

 

3Q2019

 

 

Dif.

 

 

3Q2020

 

 

3Q2019

 

 

Dif.

 

 

3Q2020

 

 

3Q2019

 

 

Dif.

 

Mexico

 

 

1,065.7

 

 

 

1,334.9

 

 

 

-20

%

 

 

1,445

 

 

 

1,629

 

 

 

-11

%

 

 

737

 

 

 

820

 

 

 

-10

%

Southern Region

 

 

495.6

 

 

 

435.9

 

 

 

14

%

 

 

547

 

 

 

504

 

 

 

9

%

 

 

906

 

 

 

865

 

 

 

5

%

Other Markets

 

 

508.0

 

 

 

595.1

 

 

 

-15

%

 

 

853

 

 

 

924

 

 

 

-8

%

 

 

596

 

 

 

644

 

 

 

-7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total steel products

 

 

2,069.4

 

 

 

2,365.8

 

 

 

-13

%

 

 

2,845

 

 

 

3,057

 

 

 

-7

%

 

 

727

 

 

 

774

 

 

 

-6

%

Other products*

 

 

45.6

 

 

 

83.9

 

 

 

-46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel segment

 

 

2,114.9

 

 

 

2,449.7

 

 

 

-14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mining segment

 

 

91.3

 

 

 

111.7

 

 

 

-18

%

 

 

869

 

 

 

904

 

 

 

-4

%

 

 

105

 

 

 

124

 

 

 

-15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment eliminations

 

 

(67.6

)

 

 

(111.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

2,138.6

 

 

 

2,449.7

 

 

 

-13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel segment

 

 

Mining segment

 

 

Intersegment
eliminations

 

 

Total

 

$ million

 

3Q2020

 

 

3Q2019

 

 

3Q2020

 

 

3Q2019

 

 

3Q2020

 

 

3Q2019

 

 

3Q2020

 

 

3Q2019

 

Net Sales

 

 

2,114.9

 

 

 

2,449.7

 

 

 

91.3

 

 

 

111.7

 

 

 

(67.6

)

 

 

(111.7

)

 

 

2,138.6

 

 

 

2,449.7

 

Cost of sales

 

 

(1,762.2

)

 

 

(2,065.1

)

 

 

(60.2

)

 

 

(61.6

)

 

 

65.9

 

 

 

110.3

 

 

 

(1,756.6

)

 

 

(2,016.4

)

SG&A expenses

 

 

(175.4

)

 

 

(208.2

)

 

 

(7.7

)

 

 

(3.7

)

 

 

-

 

 

 

-

 

 

 

(183.1

)

 

 

(211.9

)

Other operating income, net

 

 

1.8

 

 

 

6.9

 

 

 

0.2

 

 

 

0.3

 

 

 

-

 

 

 

-

 

 

 

2.0

 

 

 

7.2

 

Operating income

 

 

179.2

 

 

 

183.3

 

 

 

23.5

 

 

 

46.7

 

 

 

(1.7)

 

 

 

(1.4)

 

 

 

201.0

 

 

 

228.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

318.7

 

 

 

330.7

 

 

 

36.4

 

 

 

58.7

 

 

 

(1.7)

 

 

 

(1.4)

 

 

 

353.4

 

 

 

388.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales (million $)

 

 

Shipments (thousand tons)

 

 

Revenue/ton ($/ton)

 

 

 

9M2020

 

 

9M2019

 

 

Dif.

 

 

9M2020

 

 

9M2019

 

 

Dif.

 

 

9M2020

 

 

9M2019

 

 

Dif.

 

Mexico

 

 

3,186.1

 

 

 

4,129.4

 

 

 

-23

%

 

 

4,269

 

 

 

4,761

 

 

 

-10

%

 

 

746

 

 

 

867

 

 

 

-14

%

Southern Region

 

 

1,129.2

 

 

 

1,252.6

 

 

 

-10

%

 

 

1,270

 

 

 

1,454

 

 

 

-13

%

 

 

889

 

 

 

862

 

 

 

3

%

Other Markets

 

 

1,654.7

 

 

 

2,316.5

 

 

 

-29

%

 

 

2,753

 

 

 

3,379

 

 

 

-19

%

 

 

601

 

 

 

686

 

 

 

-12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total steel products

 

 

5,970.0

 

 

 

7,698.6

 

 

 

-22

%

 

 

8,292

 

 

 

9,594

 

 

 

-14

%

 

 

720

 

 

 

802

 

 

 

-10

%

Other products*

 

 

132.3

 

 

 

244.2

 

 

 

-46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel segment

 

 

6,102.3

 

 

 

7,942.8

 

 

 

-23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mining segment

 

 

284.8

 

 

 

264.3

 

 

 

8

%

 

 

2,854

 

 

 

2,659

 

 

 

7

%

 

 

100

 

 

 

99

 

 

 

0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment eliminations

 

 

(231.3

)

 

 

(264.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

6,155.8

 

 

 

7,942.8

 

 

 

-22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel segment

 

 

Mining segment

 

 

Intersegment
eliminations

 

 

Total

 

$ million

 

9M2020

 

 

9M2019

 

 

9M2020

 

 

9M2019

 

 

9M2020

 

 

9M2019

 

 

9M2020

 

 

9M2019

 

Net Sales

 

 

6,102.3

 

 

 

7,942.8

 

 

 

284.8

 

 

 

264.3

 

 

 

(231.3

)

 

 

(264.3

)

 

 

6,155.8

 

 

 

7,942.8

 

Cost of sales

 

 

(5,223.3

)

 

 

(6,587.0

)

 

 

(195.0

)

 

 

(186.2

)

 

 

232.5

 

 

 

264.1

 

 

 

(5,185.8

)

 

 

(6,509.1

)

SG&A expenses

 

 

(547.8

)

 

 

(663.2

)

 

 

(18.4

)

 

 

(11.4

)

 

 

-

 

 

 

-

 

 

 

(566.1

)

 

 

(674.5

)

Other operating (loss) income, net

 

 

(0.9

)

 

 

13.6

 

 

 

(0.6

)

 

 

(0.4

)

 

 

-

 

 

 

-

 

 

 

(1.5

)

 

 

13.2

 

Operating income

 

 

330.2

 

 

 

706.2

 

 

 

70.8

 

 

 

66.3

 

 

 

1.2

 

 

 

(0.2)

 

 

 

402.3

 

 

 

772.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

771.2

 

 

 

1,161.1

 

 

 

106.9

 

 

 

101.7

 

 

 

1.2

 

 

 

(0.2)

 

 

 

879.3

 

 

 

1,262.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ million

 

3Q2020

 

 

3Q2019

 

 

9M2020

 

 

9M2019

 

 

 

 

 

 

 

Net sales

 

 

2,138.6

 

 

 

2,449.7

 

 

 

6,155.8

 

 

 

7,942.8

 

Cost of sales

 

 

(1,756.6

)

 

 

(2,016.4

)

 

 

(5,185.8

)

 

 

(6,509.1

)

Gross profit

 

 

382.1

 

 

 

433.3

 

 

 

969.9

 

 

 

1,433.7

 

Selling, general and administrative expenses

 

 

(183.1

)

 

 

(211.9

)

 

 

(566.1

)

 

 

(674.5

)

Other operating income (expense), net

 

 

2.0

 

 

 

7.2

 

 

 

(1.5

)

 

 

13.2

 

Operating income

 

 

201.0

 

 

 

228.6

 

 

 

402.3

 

 

 

772.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance expense

 

 

(9.0

)

 

 

(25.6

)

 

 

(38.9

)

 

 

(66.8

)

Finance income

 

 

15.9

 

 

 

9.0

 

 

 

30.9

 

 

 

21.4

 

Other financial (expenses) income, net

 

 

(20.6

)

 

 

(18.3

)

 

 

85.8

 

 

 

(23.5

)

Equity in earnings (losses) of non-consolidated companies

 

 

13.2

 

 

 

1.9

 

 

 

(0.4

)

 

 

37.1

 

Profit before income tax expense

 

 

200.5

 

 

 

195.6

 

 

 

479.7

 

 

 

740.5

 

Income tax expense

 

 

(27.5

)

 

 

(83.6

)

 

 

(282.5

)

 

 

(200.4

)

Profit for the period

 

 

173.0

 

 

 

111.9

 

 

 

197.2

 

 

 

540.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the parent

 

 

145.6

 

 

 

95.3

 

 

 

178.1

 

 

 

493.8

 

Non-controlling interest

 

 

27.4

 

 

 

16.6

 

 

 

19.2

 

 

 

46.3

 

Profit for the period

 

 

173.0

 

 

 

111.9

 

 

 

197.2

 

 

 

540.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ million

 

September 30,2020

 

 

December 31, 2019

 

 

 

(Unaudited)

 

 

 

 

Property, plant and equipment, net

 

 

6,525.8

 

 

 

6,539.6

 

Intangible assets, net

 

 

908.3

 

 

 

943.8

 

Investments in non-consolidated companies

 

 

393.5

 

 

 

513.6

 

Deferred tax assets

 

 

126.8

 

 

 

163.5

 

Receivables, net

 

 

267.8

 

 

 

592.6

 

Trade receivables, net

 

 

0.1

 

 

 

0.9

 

Other investments

 

 

2.9

 

 

 

3.3

 

Total non-current assets

 

 

8,225.2

 

 

 

8,757.3

 

 

 

 

 

 

 

 

 

 

Receivables, net

 

 

217.0

 

 

 

334.7

 

Derivative financial instruments

 

 

1.5

 

 

 

1.2

 

Inventories, net

 

 

1,667.3

 

 

 

2,158.3

 

Trade receivables, net

 

 

776.3

 

 

 

949.7

 

Other investments

 

 

623.2

 

 

 

212.3

 

Cash and cash equivalents

 

 

680.7

 

 

 

520.0

 

Total current assets

 

 

3,965.9

 

 

 

4,176.1

 

 

 

 

 

 

 

 

 

 

Non-current assets classified as held for sale

 

 

1.9

 

 

 

2.1

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

12,193.0

 

 

 

12,935.5

 

 

 

 

 

 

 

 

 

 

Capital and reserves attributable to the owners of the parent

 

 

6,686.1

 

 

 

6,611.7

 

Non-controlling interest

 

 

1,091.0

 

 

 

1,103.2

 

 

 

 

 

 

 

 

 

 

Total Equity

 

 

7,777.1

 

 

 

7,714.9

 

 

 

 

 

 

 

 

 

 

Provisions

 

 

256.4

 

 

 

613.4

 

Deferred tax liabilities

 

 

469.2

 

 

 

403.3

 

Other liabilities

 

 

447.4

 

 

 

507.6

 

Trade payables

 

 

1.0

 

 

 

1.2

 

Derivative financial instruments

 

 

0.5

 

 

 

-

 

Lease liabilities

 

 

257.6

 

 

 

298.2

 

Borrowings

 

 

1,457.4

 

 

 

1,628.9

 

Total non-current liabilities

 

 

2,889.6

 

 

 

3,452.5

 

 

 

 

 

 

 

 

 

 

Current income tax liabilities

 

 

36.2

 

 

 

47.1

 

Other liabilities

 

 

215.6

 

 

 

240.9

 

Trade payables

 

 

824.6

 

 

 

876.8

 

Derivative financial instruments

 

 

0.1

 

 

 

3.0

 

Lease liabilities

 

 

41.2

 

 

 

40.5

 

Borrowings

 

 

408.8

 

 

 

559.8

 

Total current liabilities

 

 

1,526.4

 

 

 

1,768.1

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

4,416.0

 

 

 

5,220.7

 

 

 

 

 

 

 

 

 

 

Total equity and liabilities

 

 

12,193.0

 

 

 

12,935.5

 

 

 

 

 

 

 

 

 

 

$ million

 

3Q2020

 

 

3Q2019

 

 

9M2020

 

 

9M2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

 

 

173.0

 

 

 

111.9

 

 

 

197.2

 

 

 

540.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

152.4

 

 

 

159.4

 

 

 

477.1

 

 

 

490.3

 

Equity in (earnings) losses of non-consolidated companies

 

 

(13.2

)

 

 

(1.9

)

 

 

0.4

 

 

 

(37.1

)

Changes in provisions

 

 

-

 

 

 

0.4

 

 

 

(0.3

)

 

 

(2.3

)

Net foreign exchange results and others

 

 

58.8

 

 

 

20.3

 

 

 

(28.1

)

 

 

29.6

 

Interest accruals less payments

 

 

0.8

 

 

 

(1.5

)

 

 

4.6

 

 

 

3.0

 

Income tax accruals less payments

 

 

(52.4

)

 

 

14.8

 

 

 

127.4

 

 

 

(187.6

)

Changes in working capital

 

 

140.6

 

 

 

202.7

 

 

 

628.1

 

 

 

418.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

460.0

 

 

 

506.2

 

 

 

1,406.4

 

 

 

1,254.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(71.1

)

 

 

(255.9

)

 

 

(439.6

)

 

 

(744.8

)

Proceeds from the sale of property, plant & equipment

 

 

0.1

 

 

 

-

 

 

 

0.4

 

 

 

0.5

 

Acquisition of non-controlling interest

 

 

(2.8

)

 

 

(4.2

)

 

 

(14.1

)

 

 

(4.2

)

Loans to non-consolidated companies

 

 

-

 

 

 

-

 

 

 

-

 

 

 

24.5

 

Decrease (increase) in other Investments

 

 

84.3

 

 

 

(184.4

)

 

 

(410.5

)

 

 

(166.5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) investing activities

 

 

10.5

 

 

 

(444.4)

 

 

 

(863.9)

 

 

 

(890.5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends paid in cash to company's shareholders

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(235.6

)

Dividends paid in cash to non-controlling interest

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(28.5

)

Finance Lease Payments

 

 

(10.1

)

 

 

(9.0

)

 

 

(30.4

)

 

 

(28.6

)

Proceeds from borrowings

 

 

24.8

 

 

 

263.6

 

 

 

244.3

 

 

 

1,133.0

 

Repayments of borrowings

 

 

(239.4

)

 

 

(448.2

)

 

 

(558.2

)

 

 

(802.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by financing activities

 

 

(224.6)

 

 

 

(193.6)

 

 

 

(344.3)

 

 

 

38.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

 

245.8

 

 

 

(131.9)

 

 

 

198.2

 

 

 

402.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thousand tons

 

3Q2020

 

 

3Q2019

 

 

2Q2020

 

 

9M2020

 

 

9M2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

 

1,445

 

 

 

1,629

 

 

 

1,175

 

 

 

4,269

 

 

 

4,761

 

Southern Region

 

 

547

 

 

 

504

 

 

 

344

 

 

 

1,270

 

 

 

1,454

 

Other Markets

 

 

853

 

 

 

924

 

 

 

931

 

 

 

2,753

 

 

 

3,379

 

Total steel segment

 

 

2,845

 

 

 

3,057

 

 

 

2,449

 

 

 

8,292

 

 

 

9,594

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total mining segment

 

 

869

 

 

 

904

 

 

 

991

 

 

 

2,854

 

 

 

2,659

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$/ton

 

3Q2020

 

 

3Q2019

 

 

2Q2020

 

 

9M2020

 

 

9M2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

 

737

 

 

 

820

 

 

 

725

 

 

 

746

 

 

 

867

 

Southern Region

 

 

906

 

 

 

865

 

 

 

852

 

 

 

889

 

 

 

862

 

Other Markets

 

 

596

 

 

 

644

 

 

 

587

 

 

 

601

 

 

 

686

 

Total steel segment

 

 

727

 

 

 

774

 

 

 

690

 

 

 

720

 

 

 

802

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total mining segment

 

 

105

 

 

 

124

 

 

 

100

 

 

 

100

 

 

 

99

 

 

$ million

 

3Q2020

 

 

3Q2019

 

 

2Q2020

 

 

9M2020

 

 

9M2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

 

1,065.7

 

 

 

1,334.9

 

 

 

851.5

 

 

 

3,186.1

 

 

 

4,129.4

 

Southern Region

 

 

495.6

 

 

 

435.9

 

 

 

292.8

 

 

 

1,129.2

 

 

 

1,252.6

 

Other Markets

 

 

508.0

 

 

 

595.1

 

 

 

546.4

 

 

 

1,654.7

 

 

 

2,316.5

 

Total steel products

 

 

2,069.4

 

 

 

2,365.8

 

 

 

1,690.7

 

 

 

5,970.0

 

 

 

7,698.6

 

Other products1

 

 

45.6

 

 

 

83.9

 

 

 

42.5

 

 

 

132.3

 

 

 

244.2

 

Total steel segment

 

 

2,114.9

 

 

 

2,449.7

 

 

 

1,733.2

 

 

 

6,102.3

 

 

 

7,942.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total mining segment

 

 

91.3

 

 

 

111.7

 

 

 

98.7

 

 

 

284.8

 

 

 

264.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total steel and mining segments

 

 

2,206.2

 

 

 

2,561.4

 

 

 

1,831.9

 

 

 

6,387.1

 

 

 

8,207.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment eliminations

 

 

(67.6

)

 

 

(111.7

)

 

 

(86.1

)

 

 

(231.3

)

 

 

(264.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net sales

 

 

2,138.6

 

 

 

2,449.7

 

 

 

1,745.8

 

 

 

6,155.8

 

 

 

7,942.8

 


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