Flat and long steel manufacturer Ternium South America announced Wednesday its results for the Q3 and nine-month period ended September 30, 2010.
Ternium's operating income in Q3 2010 was US$267.6 million, a decrease of 26 percent from US$359.2 million in Q2 2010, mainly due to higher cost per net ton (nt) and slightly lower shipments and revenue per nt. Cost per nt increased mainly as a result of higher cost for purchased slabs and scrap. Shipments decreased 21,000 nt in Q3 2010 compared to Q2 2010, mainly due to a 71,000 nt decrease in shipments in the North America Region.
Ternium's operating income in the first nine months of 2010 was US$920.3 million, compared to US$80.3 million in the first nine months of 2009. The increase was mainly due to an additional 1.2 million nt in shipments and US$148 in revenue per nt, partially offset by a slightly higher operating cost per nt. Shipments and revenue per ton in the first nine months of 2009 were significantly impacted by the global economic downturn during the period.
Ternium's net income in Q3 2010 was US$200.8 million, a decrease of US$29.8 million compared to last quarter. Net income in Q3 2010 increased US$96.2 million when compared to Q2 2009.
Net income was US$676.6 million in the first nine months of 2010, US$104.3 million higher than net income in the first nine months of 2009.
Ternium anticipates that steel demand in Latin America, driven by solid economic growth, will continue to recover. However, as a result of normal seasonal patterns, the company's shipments in the coming quarters are expected to remain relatively stable compared to shipment levels in Q3 2010.
Sales of flat products during Q3 2010 were US$1.6 billion, an increase of 46 percent compared with the same quarter in 2009. Net sales increased as a result of higher shipments and revenue per nt. Shipments of flat products were 1.7 million tons in Q3 2010, an increase of 18 percent compared with the same period in 2009, mainly due to an increase in demand in the South & Central America Region. Revenue per nt shipped increased 24 percent in Q3 2010 when compared with the same period in 2009, mainly due to higher prices in Ternium's main steel markets.
Sales of long products were US$217.0 million in Q3 2010, an increase of 48 percent compared to the same period in 2009 mainly due to higher shipments and revenue per nt. Shipments of long products totaled 347,000 nt in Q3 2010, a 28 percent increase versus the same quarter in 2009 mainly due to higher billets shipments in the South & Central America Region.
Sales of other products totaled US$40.7 million during the third quarter 2010, compared to US$21.2 million during the third quarter 2009. The increase was mainly driven by higher iron ore shipments and prices.
Sales of flat and long products in the North America Region increased 27 percent versus the same period in 2009, mainly due to higher revenue per nt. Shipments in the region totaled 1.2 million nt during Q3 2010, or 4 percent higher than in the same period in 2009 as a result of higher shipments in Mexico, offset by lower shipments in the US.
Flat and long product sales in the South & Central America Region surged 80 percent versus the same period in 2009. Shipments in the region were 52 percent higher than in Q3 2009, mainly due to a recovery from the 2009 global economic downturn. Revenue per nt shipped was up 19 percent compared to the same quarter in 2009, mainly due to higher prices.