Ternium’s net income falls in Q4 despite increase in Mexican shipments

Friday, 20 February 2015 01:59:27 (GMT+3)   |  
       

Ternium’s net income fell 51 percent in the fourth quarter of 2014 (Q4), year-on-year, to $61.6 million, due to an increase in production costs of steel, the company said on Thursday.

According to the company, its operating margins decreased “sequentially” mainly as a result of $35/mt lower steel revenue, “partially offset by $6/mt lower steel operating cost.”

“Steel revenue per ton decreased mainly as a result of lower steel prices in Ternium's main steel markets. The decrease in steel operating cost per ton included lower purchased slabs costs and higher energy costs,” Ternium said in a statement.

Ternium’s Q4 EBTIDA decreased 23 percent to $300.9 million.

Ternium said iron ore shipments decreased by 9 percent to 3.8 million mt in 2014, while steel shipments increased 4 percent to 9.3 million mt.

The company’s net income in 2014 was stable, with a 0.7 percent decrease compared to 2013, reaching $588.8 million. The full year’s EBITDA was 1 percent lower compared to 2013, at $1.4 billion.

Ternium said it had record steel shipments in 2014, “largely due to a 13 percent increase in shipments in the Mexican market.”
 
“Strong fundamentals for steel demand, including a vibrant manufacturing industry and a slowly improving construction sector, underpin the company's continued positive outlook for shipments in Mexico,” the company said.

As for Argentina, Ternium's steel shipments decreased 6 percent in 2014, as a result of a decrease in flat steel demand in most end-markets.

For 2015, Ternium expects a relatively “stable” operating income in Q1 2015 compared to its operating income in the Q4 2014. “This forecast is based on lower revenue per metric ton in Ternium's main markets, offset by lower cost per ton and slightly higher shipments mainly due to an increase in shipments in Mexico.”


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