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Name | Symbol | Market | Type |
---|---|---|---|
Ternium SA | NYSE:TX | NYSE | Depository Receipt |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.22 | -0.54% | 40.29 | 40.76 | 40.11 | 40.76 | 318,519 | 01:00:00 |
By:
|
|
By:
|
Name: Pablo Brizzio
|
|
Name: Máximo Vedoya
|
Title: Chief Financial Officer
|
|
Title: Chief Executive Officer
|
|
|
|
|
TERNIUM S.A.
|
|
Consolidated Condensed Interim Financial Statements
|
|
as of June 30, 2020
|
|
and for the six-month periods
|
|
ended on June 30, 2020 and 2019
|
|
|
|
26 Boulevard Royal, 4th floor
|
|
L – 2449 Luxembourg
|
|
R.C.S. Luxembourg: B 98 668
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
|
Page
|
||
|
|
||
2
|
|
||
3
|
|
||
Consolidated Condensed Interim Statements of Financial Position
|
4
|
|
|
Consolidated Condensed Interim Statements of Changes in Equity
|
5
|
|
|
Consolidated Condensed Interim Statements of Cash Flows
|
7
|
|
|
Notes to the Consolidated Condensed Interim Financial Statements
|
|
||
1
|
General information and basis of presentation
|
8
|
|
2
|
Accounting policies
|
8
|
|
3
|
Segment information
|
9
|
|
4
|
Cost of sales
|
11
|
|
5
|
Selling, general and administrative expenses
|
12
|
|
6
|
Finance expense, Finance income and Other financial income (expenses), net
|
12
|
|
7
|
Property, plant and equipment, net
|
12
|
|
8
|
Intangible assets, net
|
13
|
|
9
|
Investments in non-consolidated companies
|
13
|
|
10
|
Contingencies, commitments and restrictions on the distribution of profits
|
15
|
|
11
|
Related party transactions
|
19
|
|
12
|
Financial instruments by category and fair value measurement
|
20
|
|
13
|
The Covid-19 pandemic and its impact on Ternium
|
21
|
|
|
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
||
(All amounts in $ thousands)
|
|
|
|
|
|
|
Three-month period ended
June 30, |
|
Six-month period ended
June 30, |
||||||||
|
|
Notes
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
||||||||
Net sales
|
|
3
|
|
1,745,760
|
|
|
2,757,279
|
|
|
4,017,115
|
|
|
5,493,107
|
|
Cost of sales
|
|
3 & 4
|
|
(1,508,797
|
)
|
|
(2,277,666
|
)
|
|
(3,429,274
|
)
|
|
(4,492,713
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit
|
|
3
|
|
236,963
|
|
|
479,613
|
|
|
587,841
|
|
|
1,000,394
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses
|
|
3 & 5
|
|
(171,451
|
)
|
|
(243,634
|
)
|
|
(383,042
|
)
|
|
(462,682
|
)
|
Other operating income (expenses), net
|
|
3
|
|
74
|
|
|
434
|
|
|
(3,537
|
)
|
|
5,988
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income
|
|
3
|
|
65,586
|
|
|
236,413
|
|
|
201,262
|
|
|
543,700
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Finance expense
|
|
6
|
|
(13,566
|
)
|
|
(21,409
|
)
|
|
(29,859
|
)
|
|
(41,171
|
)
|
Finance income
|
|
6
|
|
7,049
|
|
|
6,508
|
|
|
14,997
|
|
|
12,391
|
|
Other financial (expenses) income, net
|
|
6
|
|
(8,100
|
)
|
|
7,833
|
|
|
106,400
|
|
|
(5,220
|
)
|
Equity in (losses) earnings of non-consolidated companies
|
|
9
|
|
(19,668
|
)
|
|
20,330
|
|
|
(13,582
|
)
|
|
35,207
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Profit before income tax expense
|
|
|
|
31,301
|
|
|
249,675
|
|
|
279,218
|
|
|
544,907
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax benefit (expense)
|
|
|
|
12,284
|
|
|
(46,456
|
)
|
|
(254,998
|
)
|
|
(116,739
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Profit for the period
|
|
|
|
43,585
|
|
|
203,219
|
|
|
24,220
|
|
|
428,168
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
||||
Owners of the parent
|
|
|
|
44,046
|
|
|
180,243
|
|
|
32,464
|
|
|
398,476
|
|
Non-controlling interest
|
|
|
|
(461
|
)
|
|
22,976
|
|
|
(8,244
|
)
|
|
29,692
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Profit for the period
|
|
|
|
43,585
|
|
|
203,219
|
|
|
24,220
|
|
|
428,168
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of shares outstanding
|
|
|
|
1,963,076,776
|
|
|
1,963,076,776
|
|
|
1,963,076,776
|
|
|
1,963,076,776
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted earnings per share for profit attributable to the equity holders of the company (expressed in $ per share)
|
|
|
|
0.02
|
|
|
0.09
|
|
|
0.02
|
|
|
0.20
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
||
(All amounts in $ thousands)
|
|
|
|
|
Three-month period ended June 30,
|
|
Six-month period ended
June 30, |
||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
|
|
(Unaudited)
|
|
(Unaudited)
|
||||||||
Profit for the period
|
|
43,585
|
|
|
203,219
|
|
|
24,220
|
|
|
428,168
|
|
|
|
|
|
|
|
|
|
|
||||
Items that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
||||
Currency translation adjustment
|
|
255
|
|
|
18,468
|
|
|
(2,897
|
)
|
|
(26,996
|
)
|
Currency translation adjustment from participation in non-consolidated companies
|
|
(20,609
|
)
|
|
8,679
|
|
|
(130,770
|
)
|
|
5,395
|
|
Changes in the fair value of financial instruments at fair value through other comprehensive income
|
|
352
|
|
|
13
|
|
|
421
|
|
|
45
|
|
Income tax related to financial instruments at fair value
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
Changes in the fair value of derivatives classified as cash flow hedges
|
|
(27
|
)
|
|
(435
|
)
|
|
(434
|
)
|
|
(703
|
)
|
Income tax related to cash flow hedges
|
|
8
|
|
|
131
|
|
|
130
|
|
|
211
|
|
Other comprehensive income items from participation in non-consolidated companies
|
|
66
|
|
|
2
|
|
|
66
|
|
|
69
|
|
Items that will not be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
||||
Remeasurement of post employment benefit obligations
|
|
262
|
|
|
(416
|
)
|
|
262
|
|
|
(416
|
)
|
Income tax relating to remeasurement of post employment benefit obligations
|
|
(21
|
)
|
|
63
|
|
|
(21
|
)
|
|
63
|
|
Remeasurement of post employment benefit obligations from participation in non-consolidated companies
|
|
21,569
|
|
|
(1,084
|
)
|
|
21,512
|
|
|
(1,241
|
)
|
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income (loss) for the period, net of tax
|
|
1,841
|
|
|
25,421
|
|
|
(111,745
|
)
|
|
(23,573
|
)
|
|
|
|
|
|
|
|
|
|
||||
Total comprehensive income (loss) for the period
|
|
45,426
|
|
|
228,640
|
|
|
(87,525
|
)
|
|
404,595
|
|
|
|
|
|
|
|
|
|
|
||||
Attributable to:
|
|
|
|
|
|
|
|
|
||||
Owners of the parent
|
|
45,721
|
|
|
198,630
|
|
|
(70,900
|
)
|
|
385,592
|
|
Non-controlling interest
|
|
(295
|
)
|
|
30,010
|
|
|
(16,625
|
)
|
|
19,003
|
|
|
|
|
|
|
|
|
|
|
||||
Total comprehensive income (loss) for the period
|
|
45,426
|
|
|
228,640
|
|
|
(87,525
|
)
|
|
404,595
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
||
(All amounts in $ thousands)
|
|
|
|
|
|
|
Balances as of
|
||||||||||
|
|
Notes
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||
|
|
|
|
(Unaudited)
|
|
|
|
|
||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
||||
Property, plant and equipment, net
|
|
7
|
|
6,596,714
|
|
|
|
|
6,539,581
|
|
|
|
||
Intangible assets, net
|
|
8
|
|
915,719
|
|
|
|
|
943,838
|
|
|
|
||
Investments in non-consolidated companies
|
|
9
|
|
390,613
|
|
|
|
|
513,648
|
|
|
|
||
Other investments
|
|
|
|
6,295
|
|
|
|
|
3,253
|
|
|
|
||
Deferred tax assets
|
|
|
|
124,085
|
|
|
|
|
163,538
|
|
|
|
||
Receivables, net
|
|
|
|
483,055
|
|
|
|
|
592,565
|
|
|
|
||
Trade receivables, net
|
|
|
|
221
|
|
|
8,516,702
|
|
|
897
|
|
|
8,757,320
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
||||
Receivables, net
|
|
|
|
177,174
|
|
|
|
|
334,713
|
|
|
|
||
Derivative financial instruments
|
|
|
|
7,713
|
|
|
|
|
1,196
|
|
|
|
||
Inventories, net
|
|
|
|
1,803,893
|
|
|
|
|
2,158,298
|
|
|
|
||
Trade receivables, net
|
|
|
|
723,474
|
|
|
|
|
949,672
|
|
|
|
||
Other investments
|
|
|
|
704,056
|
|
|
|
|
212,271
|
|
|
|
||
Cash and cash equivalents
|
|
|
|
454,559
|
|
|
3,870,869
|
|
|
519,965
|
|
|
4,176,115
|
|
Non-current assets classified as held for sale
|
|
|
|
|
|
2,075
|
|
|
|
|
2,098
|
|
||
|
|
|
|
|
|
3,872,944
|
|
|
|
|
4,178,213
|
|
||
Total Assets
|
|
|
|
|
|
12,389,646
|
|
|
|
|
12,935,533
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
EQUITY
|
|
|
|
|
|
|
|
|
|
|
||||
Capital and reserves attributable to the owners of the parent
|
|
|
|
|
|
6,548,335
|
|
|
|
|
6,611,665
|
|
||
Non-controlling interest
|
|
|
|
|
|
1,067,695
|
|
|
|
|
1,103,208
|
|
||
Total Equity
|
|
|
|
|
|
7,616,030
|
|
|
|
|
7,714,873
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
||||
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
||||
Provisions
|
|
|
|
451,537
|
|
|
|
|
613,352
|
|
|
|
||
Deferred tax liabilities
|
|
|
|
511,179
|
|
|
|
|
403,278
|
|
|
|
||
Other liabilities
|
|
|
|
432,094
|
|
|
|
|
507,603
|
|
|
|
||
Trade payables
|
|
|
|
947
|
|
|
|
|
1,174
|
|
|
|
||
Derivative financial instruments
|
|
|
|
512
|
|
|
|
|
17
|
|
|
|
||
Lease liabilities
|
|
|
|
262,813
|
|
|
|
|
298,219
|
|
|
|
||
Borrowings
|
|
|
|
1,493,756
|
|
|
3,152,838
|
|
|
1,628,892
|
|
|
3,452,535
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
||||
Current income tax liabilities
|
|
|
|
30,607
|
|
|
|
|
47,053
|
|
|
|
||
Other liabilities
|
|
|
|
223,339
|
|
|
|
|
240,934
|
|
|
|
||
Trade payables
|
|
|
|
738,533
|
|
|
|
|
876,803
|
|
|
|
||
Derivative financial instruments
|
|
|
|
412
|
|
|
|
|
3,007
|
|
|
|
||
Lease liabilities
|
|
|
|
39,604
|
|
|
|
|
40,546
|
|
|
|
||
Borrowings
|
|
|
|
588,283
|
|
|
1,620,778
|
|
|
559,782
|
|
|
1,768,125
|
|
Total Liabilities
|
|
|
|
|
|
4,773,616
|
|
|
|
|
5,220,660
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Total Equity and Liabilities
|
|
|
|
|
|
12,389,646
|
|
|
|
|
12,935,533
|
|
TERNIUM S.A.
|
||
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
||
(All amounts in $ thousands)
|
|
|
Attributable to the owners of the parent (1)
|
|
|
|
|
|||||||||||||||||
|
|
Capital stock (2)
|
Treasury shares
(2) |
Initial public offering expenses
|
Reserves
(3) |
Capital stock issue discount (4)
|
Currency translation adjustment
|
Retained earnings
|
Total
|
|
Non-controlling interest
|
|
Total Equity
|
||||||||||
|
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance as of January 1, 2020
|
|
2,004,743
|
|
(150,000
|
)
|
(23,295
|
)
|
1,332,980
|
|
(2,324,866
|
)
|
(2,760,046
|
)
|
8,532,149
|
|
6,611,665
|
|
|
1,103,208
|
|
|
7,714,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Profit (loss) for the period
|
|
|
|
|
|
|
|
32,464
|
|
32,464
|
|
|
(8,244
|
)
|
|
24,220
|
|
||||||
Other comprehensive income (loss) for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency translation adjustment
|
|
|
|
|
|
|
(123,937
|
)
|
|
(123,937
|
)
|
|
(9,730
|
)
|
|
(133,667
|
)
|
||||||
Remeasurement of post employment benefit obligations
|
|
|
|
|
20,270
|
|
|
|
|
20,270
|
|
|
1,483
|
|
|
21,753
|
|
||||||
Cash flow hedges and others, net of tax
|
|
|
|
|
(155
|
)
|
|
|
|
(155
|
)
|
|
(149
|
)
|
|
(304
|
)
|
||||||
Others
|
|
|
|
|
458
|
|
|
|
|
458
|
|
|
15
|
|
|
473
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total comprehensive income (loss) for the period
|
|
—
|
|
—
|
|
—
|
|
20,573
|
|
—
|
|
(123,937
|
)
|
32,464
|
|
(70,900
|
)
|
|
(16,625
|
)
|
|
(87,525
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition of non-controlling interest (5)
|
|
|
|
|
7,570
|
|
|
|
|
7,570
|
|
|
(18,888
|
)
|
|
(11,318
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance as of June 30, 2020 (unaudited)
|
|
2,004,743
|
|
(150,000
|
)
|
(23,295
|
)
|
1,361,123
|
|
(2,324,866
|
)
|
(2,883,983
|
)
|
8,564,613
|
|
6,548,335
|
|
|
1,067,695
|
|
|
7,616,030
|
|
TERNIUM S.A.
|
||
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
||
(All amounts in $ thousands)
|
|
|
Attributable to the owners of the parent (1)
|
|
|
|
|
|||||||||||||||||
|
|
Capital stock (2)
|
Treasury shares
(2) |
Initial public offering expenses
|
Reserves (3)
|
Capital stock issue discount (4)
|
Currency translation adjustment
|
Retained earnings
|
Total
|
|
Non-controlling interest
|
|
Total Equity
|
||||||||||
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance as of January 1, 2019
|
|
2,004,743
|
|
(150,000
|
)
|
(23,295
|
)
|
1,385,701
|
|
(2,324,866
|
)
|
(2,702,477
|
)
|
8,203,449
|
|
6,393,255
|
|
|
1,091,321
|
|
|
7,484,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Profit for the period
|
|
|
|
|
|
|
|
398,476
|
|
398,476
|
|
|
29,692
|
|
|
428,168
|
|
||||||
Other comprehensive income (loss) for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency translation adjustment
|
|
|
|
|
|
|
(11,199
|
)
|
|
(11,199
|
)
|
|
(10,402
|
)
|
|
(21,601
|
)
|
||||||
Remeasurement of post employment benefit obligations
|
|
|
|
|
(1,520
|
)
|
|
|
|
(1,520
|
)
|
|
(74
|
)
|
|
(1,594
|
)
|
||||||
Cash flow hedges, net of tax
|
|
|
|
|
(251
|
)
|
|
|
|
(251
|
)
|
|
(241
|
)
|
|
(492
|
)
|
||||||
Others
|
|
|
|
|
86
|
|
|
|
|
86
|
|
|
28
|
|
|
114
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total comprehensive income (loss) for the period
|
|
—
|
|
—
|
|
—
|
|
(1,685
|
)
|
—
|
|
(11,199
|
)
|
398,476
|
|
385,592
|
|
|
19,003
|
|
|
404,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid in cash
|
|
|
|
|
|
|
|
(235,569
|
)
|
(235,569
|
)
|
|
|
|
(235,569
|
)
|
|||||||
Dividends paid in cash to non-controlling interest
|
|
|
|
|
|
|
|
|
—
|
|
|
(29,594
|
)
|
|
(29,594
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance as of June 30, 2019 (unaudited)
|
|
2,004,743
|
|
(150,000
|
)
|
(23,295
|
)
|
1,384,016
|
|
(2,324,866
|
)
|
(2,713,676
|
)
|
8,366,356
|
|
6,543,278
|
|
|
1,080,731
|
|
|
7,624,008
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
||
(All amounts in $ thousands)
|
|
|
|
|
Six- month period ended June 30,
|
||||
|
|
Notes
|
|
2020
|
|
2019
|
||
|
|
|
|
(Unaudited)
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Profit for the period
|
|
|
|
24,220
|
|
|
428,168
|
|
Adjustments for:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
7 & 8
|
|
324,692
|
|
|
330,889
|
|
Income tax accruals less payments
|
|
|
|
179,812
|
|
|
(202,413
|
)
|
Equity in losses (earnings) of non-consolidated companies
|
|
9
|
|
13,582
|
|
|
(35,207
|
)
|
Interest accruals less payments
|
|
|
|
3,721
|
|
|
4,558
|
|
Changes in provisions
|
|
|
|
(337
|
)
|
|
(2,671
|
)
|
Changes in working capital (1)
|
|
|
|
487,581
|
|
|
215,988
|
|
Net foreign exchange results and others
|
|
|
|
(86,839
|
)
|
|
9,246
|
|
Net cash provided by operating activities
|
|
|
|
946,432
|
|
|
748,558
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
||
Capital expenditures
|
|
7 & 8
|
|
(368,429
|
)
|
|
(488,942
|
)
|
Recovery of loans to non-consolidated companies
|
|
|
|
—
|
|
|
24,480
|
|
(Increase) Decrease in other investments
|
|
|
|
(494,827
|
)
|
|
17,938
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
221
|
|
|
475
|
|
Acquisition of non-controlling interest
|
|
|
|
(11,318
|
)
|
|
—
|
|
Net cash used in investing activities
|
|
|
|
(874,353
|
)
|
|
(446,049
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
|
||
Dividends paid in cash to company’s shareholders
|
|
|
|
—
|
|
|
(235,569
|
)
|
Dividends paid in cash to non-controlling interest
|
|
|
|
—
|
|
|
(28,530
|
)
|
Finance lease payments
|
|
|
|
(20,355
|
)
|
|
(19,629
|
)
|
Proceeds from borrowings
|
|
|
|
219,487
|
|
|
869,359
|
|
Repayments of borrowings
|
|
|
|
(318,803
|
)
|
|
(353,805
|
)
|
Net cash (used in) provided by financing activities
|
|
|
|
(119,671
|
)
|
|
231,826
|
|
(Decrease) Increase in cash and cash equivalents
|
|
|
|
(47,592
|
)
|
|
534,335
|
|
Movement in cash and cash equivalents
|
|
|
|
|
|
|
||
At January 1,
|
|
|
|
519,965
|
|
|
250,541
|
|
Effect of exchange rate changes and inflation adjustment
|
|
|
|
(17,814
|
)
|
|
(7,347
|
)
|
(Decrease) Increase in cash and cash equivalents
|
|
|
|
(47,592
|
)
|
|
534,335
|
|
Cash and cash equivalents as of June 30, (2)
|
|
|
|
454,559
|
|
|
777,529
|
|
|
|
|
|
|
|
|
||
Non-cash transactions:
|
|
|
|
|
|
|
||
Acquisition of PP&E under lease contract agreements
|
|
|
|
2,079
|
|
|
4,266
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
1.
|
GENERAL INFORMATION AND BASIS OF PRESENTATION
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
|
|
Six- month period ended June 30, 2020 (Unaudited)
|
||||||||||
|
|
Steel
|
|
Mining
|
|
Inter-segment eliminations
|
|
Total
|
||||
IFRS
|
|
|
|
|
|
|
|
|
||||
Net sales
|
|
3,987,313
|
|
|
193,521
|
|
|
(163,719
|
)
|
|
4,017,115
|
|
Cost of sales
|
|
(3,461,131
|
)
|
|
(134,816
|
)
|
|
166,673
|
|
|
(3,429,274
|
)
|
Gross profit
|
|
526,182
|
|
|
58,704
|
|
|
2,954
|
|
|
587,841
|
|
Selling, general and administrative expenses
|
|
(372,395
|
)
|
|
(10,647
|
)
|
|
—
|
|
|
(383,042
|
)
|
Other operating income, net
|
|
(2,759
|
)
|
|
(778
|
)
|
|
—
|
|
|
(3,537
|
)
|
Operating income - IFRS
|
|
151,028
|
|
|
47,280
|
|
|
2,954
|
|
|
201,262
|
|
Management view
|
|
|
|
|
|
|
|
|
||||
Net sales
|
|
3,987,313
|
|
|
191,366
|
|
|
(161,564
|
)
|
|
4,017,115
|
|
Operating income
|
|
254,648
|
|
|
52,200
|
|
|
(1,388
|
)
|
|
305,460
|
|
Reconciliation items:
|
|
|
|
|
|
|
|
|
||||
Differences in Cost of sales
|
|
|
|
|
|
|
|
(104,198
|
)
|
|||
Operating income - IFRS
|
|
|
|
|
|
|
|
201,262
|
|
|||
Financial income (expense), net
|
|
|
|
|
|
|
|
91,538
|
|
|||
Equity in earnings of non-consolidated companies
|
|
|
|
|
|
|
|
(13,582
|
)
|
|||
Income before income tax expense - IFRS
|
|
|
|
|
|
|
|
279,218
|
|
|||
Depreciation and amortization - IFRS
|
|
(301,504
|
)
|
|
(23,188
|
)
|
|
—
|
|
|
(324,692
|
)
|
|
|
Six- month period ended June 30, 2019 (Unaudited)
|
||||||||||
|
|
Steel
|
|
Mining
|
|
Inter-segment eliminations
|
|
Total
|
||||
IFRS
|
|
|
|
|
|
|
|
|
||||
Net sales
|
|
5,493,095
|
|
|
152,583
|
|
|
(152,571
|
)
|
|
5,493,107
|
|
Cost of sales
|
|
(4,521,870
|
)
|
|
(124,623
|
)
|
|
153,780
|
|
|
(4,492,713
|
)
|
Gross profit
|
|
971,225
|
|
|
27,960
|
|
|
1,209
|
|
|
1,000,394
|
|
Selling, general and administrative expenses
|
|
(454,990
|
)
|
|
(7,692
|
)
|
|
—
|
|
|
(462,682
|
)
|
Other operating income, net
|
|
6,688
|
|
|
(700
|
)
|
|
—
|
|
|
5,988
|
|
Operating income - IFRS
|
|
522,923
|
|
|
19,568
|
|
|
1,209
|
|
|
543,700
|
|
Management view
|
|
|
|
|
|
|
|
|
||||
Net sales
|
|
5,545,448
|
|
|
232,538
|
|
|
(232,526
|
)
|
|
5,545,460
|
|
Operating income
|
|
466,161
|
|
|
100,642
|
|
|
2,369
|
|
|
569,172
|
|
Reconciliation items:
|
|
|
|
|
|
|
|
|
||||
Differences in Cost of sales
|
|
|
|
|
|
|
|
83,938
|
|
|||
Effect of inflation adjustment
|
|
|
|
|
|
|
|
(109,410
|
)
|
|||
Operating income - IFRS
|
|
|
|
|
|
|
|
543,700
|
|
|||
Financial income (expense), net
|
|
|
|
|
|
|
|
(34,000
|
)
|
|||
Equity in earnings of non-consolidated companies
|
|
|
|
|
|
|
|
35,207
|
|
|||
Income before income tax expense - IFRS
|
|
|
|
|
|
|
|
544,907
|
|
|||
Depreciation and amortization - IFRS
|
|
(307,453
|
)
|
|
(23,436
|
)
|
|
—
|
|
|
(330,889
|
)
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
|
|
Six- month period ended June 30, 2020 (Unaudited)
|
||||||||||
|
|
Mexico
|
|
Southern region
|
|
Other markets
|
|
Total
|
||||
|
|
|
|
|
|
|
|
|
||||
Net sales
|
|
2,167,411
|
|
|
633,941
|
|
|
1,215,763
|
|
|
4,017,115
|
|
|
|
|
|
|
|
|
|
|
||||
Non-current assets (1)
|
|
4,714,696
|
|
|
969,774
|
|
|
1,827,963
|
|
|
7,512,433
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Six- month period ended June 30, 2019 (Unaudited)
|
||||||||||
|
|
Mexico
|
|
Southern region
|
|
Other markets
|
|
Total
|
||||
|
|
|
|
|
|
|
|
|
||||
Net sales
|
|
2,880,949
|
|
|
822,864
|
|
|
1,789,294
|
|
|
5,493,107
|
|
|
|
|
|
|
|
|
|
|
||||
Non-current assets (1)
|
|
4,275,745
|
|
|
1,019,551
|
|
|
1,912,117
|
|
|
7,207,413
|
|
|
|
|
|
|
|
|
|
|
||||
(1) Includes Property, plant and equipment and Intangible assets.
|
|
|
|
|
4.
|
COST OF SALES
|
|
|
Six- month period ended June 30,
|
||||
|
|
2020
|
|
2019
|
||
|
|
(Unaudited)
|
||||
Inventories at the beginning of the year
|
|
2,158,298
|
|
|
2,689,829
|
|
Translation differences
|
|
—
|
|
|
(21,919
|
)
|
Plus: Charges for the period
|
|
|
|
|
||
Raw materials and consumables used and
other movements |
|
2,291,794
|
|
|
3,264,758
|
|
Services and fees
|
|
58,619
|
|
|
78,601
|
|
Labor cost
|
|
261,652
|
|
|
320,309
|
|
Depreciation of property, plant and equipment
|
|
261,984
|
|
|
249,968
|
|
Amortization of intangible assets
|
|
6,993
|
|
|
8,941
|
|
Maintenance expenses
|
|
185,491
|
|
|
266,996
|
|
Office expenses
|
|
2,662
|
|
|
4,167
|
|
Insurance
|
|
5,065
|
|
|
4,972
|
|
Change of obsolescence allowance
|
|
2,481
|
|
|
5,415
|
|
Recovery from sales of scrap and by-products
|
|
(10,231
|
)
|
|
(12,199
|
)
|
Others
|
|
8,359
|
|
|
8,589
|
|
Less: Inventories at the end of the period
|
|
(1,803,893
|
)
|
|
(2,375,714
|
)
|
Cost of Sales
|
|
3,429,274
|
|
|
4,492,713
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
5.
|
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|
|
Six- month period ended June 30,
|
|||
|
2020
|
|
2019
|
|
|
(Unaudited)
|
|||
Services and fees
|
30,297
|
|
39,176
|
|
Labor cost
|
92,174
|
|
109,617
|
|
Depreciation of property, plant and equipment
|
8,062
|
|
8,197
|
|
Amortization of intangible assets
|
47,653
|
|
63,783
|
|
Maintenance and expenses
|
1,861
|
|
2,881
|
|
Taxes
|
39,288
|
|
51,713
|
|
Office expenses
|
14,413
|
|
17,499
|
|
Freight and transportation
|
138,816
|
|
163,089
|
|
Increase (decrease) of allowance for doubtful accounts
|
1,068
|
|
(343
|
)
|
Others
|
9,410
|
|
7,070
|
|
Selling, general and administrative expenses
|
383,042
|
|
462,682
|
|
6.
|
FINANCE EXPENSE, FINANCE INCOME AND OTHER FINANCIAL INCOME (EXPENSES), NET
|
|
Six- month period ended June 30,
|
||||
|
2020
|
|
2019
|
||
|
(Unaudited)
|
||||
Interest expense
|
(29,859
|
)
|
|
(41,171
|
)
|
|
|
|
|
||
Finance expense
|
(29,859
|
)
|
|
(41,171
|
)
|
|
|
|
|
||
Interest income
|
14,997
|
|
|
12,391
|
|
|
|
|
|
||
Finance income
|
14,997
|
|
|
12,391
|
|
|
|
|
|
||
Net foreign exchange gain (loss)
|
100,465
|
|
|
(43,054
|
)
|
Inflation adjustment results
|
—
|
|
|
57,091
|
|
Change in fair value of financial assets
|
3,842
|
|
|
—
|
|
Derivative contract results
|
13,749
|
|
|
(6,592
|
)
|
Others
|
(11,656
|
)
|
|
(12,665
|
)
|
|
|
|
|
||
Other financial income (expenses), net
|
106,400
|
|
|
(5,220
|
)
|
|
Six- month period ended June 30,
|
||||
|
2020
|
|
2019
|
||
|
(Unaudited)
|
||||
At the beginning of the year
|
6,539,581
|
|
|
5,817,609
|
|
|
|
|
|
||
Effect of initial recognition of right-of-use assets
|
—
|
|
|
280,493
|
|
Currency translation differences
|
(1,851
|
)
|
|
(36,641
|
)
|
Additions
|
344,435
|
|
|
461,096
|
|
Value adjustments of lease contracts
|
(9,559
|
)
|
|
—
|
|
Disposals
|
(13,480
|
)
|
|
(18,071
|
)
|
Depreciation charge
|
(270,046
|
)
|
|
(258,165
|
)
|
Capitalized borrowing costs
|
8,089
|
|
|
7,906
|
|
Transfers and reclassifications
|
(455
|
)
|
|
(879
|
)
|
At the end of the period
|
6,596,714
|
|
|
6,253,348
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
|
Six- month period ended June 30,
|
||||
|
2020
|
|
2019
|
||
|
(Unaudited)
|
||||
At the beginning of the year
|
943,838
|
|
|
1,012,524
|
|
|
|
|
|
||
Currency translation differences
|
—
|
|
|
(13,202
|
)
|
Additions
|
26,073
|
|
|
27,847
|
|
Amortization charge
|
(54,646
|
)
|
|
(72,724
|
)
|
Transfers/Disposals
|
454
|
|
|
(380
|
)
|
At the end of the period
|
915,719
|
|
|
954,065
|
|
9.
|
INVESTMENTS IN NON-CONSOLIDATED COMPANIES
|
Company
|
|
Country of incorporation
|
|
Main activity
|
|
Voting rights as of
|
|
Value as of
|
||||
|
|
|
June 30, 2020
|
|
December 31, 2019
|
|
June 30, 2020
|
|
December 31, 2019
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS
|
|
Brazil
|
|
Manufacturing and selling of steel products
|
|
34.39%
|
|
34.39%
|
|
353,619
|
|
486,643
|
Other non-consolidated companies (1)
|
|
|
|
|
|
|
|
|
|
36,994
|
|
27,005
|
|
|
|
|
|
|
|
|
|
|
390,613
|
|
513,648
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
9.
|
INVESTMENTS IN NON-CONSOLIDATED COMPANIES (continued)
|
Value of investment
|
|
USIMINAS
|
|
|
|
|
|
As of January 1, 2020
|
|
486,643
|
|
Share of results (1)
|
|
(24,863
|
)
|
Other comprehensive income
|
|
(108,161
|
)
|
|
|
|
|
As of June 30, 2020
|
|
353,619
|
|
|
|
|
|
(1) It includes the adjustment of the values associated to the purchase price allocation.
|
Usiminas' shareholders' equity
|
|
2,478,497
|
|
Percentage of interest of the Company over shareholders' equity
|
|
20.42
|
%
|
|
|
|
|
Interest of the Company over shareholders' equity
|
|
506,147
|
|
|
|
|
|
Purchase price allocation
|
|
56,062
|
|
Goodwill
|
|
189,816
|
|
Impairment
|
|
(398,406
|
)
|
|
|
|
|
Total Investment in Usiminas
|
|
353,619
|
|
|
|
USIMINAS
|
|
Summarized balance sheet (in million $)
|
|
As of June 30, 2020
|
|
Assets
|
|
|
|
Non-current
|
|
3,180
|
|
Current
|
|
1,265
|
|
Other current investments
|
|
151
|
|
Cash and cash equivalents
|
|
307
|
|
|
|
|
|
Total Assets
|
|
4,903
|
|
Liabilities
|
|
|
|
Non-current
|
|
468
|
|
Non-current borrowings
|
|
1,108
|
|
Current
|
|
520
|
|
Current borrowings
|
|
28
|
|
|
|
|
|
Total Liabilities
|
|
2,124
|
|
|
|
|
|
Minority interest
|
|
301
|
|
|
|
|
|
Shareholders' equity
|
|
2,478
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
9.
|
INVESTMENTS IN NON-CONSOLIDATED COMPANIES (continued)
|
|
|
USIMINAS
|
|
Summarized income statement (in million $)
|
|
Six- month period ended June 30, 2020
|
|
|
|
|
|
Net sales
|
|
1,303
|
|
Cost of sales
|
|
(1,136
|
)
|
Gross Profit
|
|
167
|
|
Selling, general and administrative expenses
|
|
(85
|
)
|
Other operating income, net
|
|
(37
|
)
|
Operating income
|
|
45
|
|
Financial expenses, net
|
|
(244
|
)
|
Equity in earnings of associated companies
|
|
12
|
|
Loss before income tax
|
|
(187
|
)
|
Income tax expense
|
|
19
|
|
Net loss before minority interest
|
|
(168
|
)
|
Minority interest in other subsidiaries
|
|
(25
|
)
|
Net loss for the period
|
|
(193
|
)
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
10.
|
CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (continued)
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
|
Six- month period ended June 30,
|
||||
|
2020
|
|
2019
|
||
|
(Unaudited)
|
||||
(i) Transactions
|
|
|
|
||
(a) Sales of goods and services
|
|
|
|
||
Sales of goods to non-consolidated parties
|
169,450
|
|
|
255,506
|
|
Sales of goods to other related parties
|
4,610
|
|
|
30,118
|
|
Sales of services and others to non-consolidated parties
|
87
|
|
|
88
|
|
Sales of services and others to other related parties
|
500
|
|
|
479
|
|
|
|
|
|
||
|
174,647
|
|
|
286,191
|
|
(b) Purchases of goods and services
|
|
|
|
||
Purchases of goods from non-consolidated parties
|
163,810
|
|
|
199,552
|
|
Purchases of goods from other related parties
|
47,864
|
|
|
23,934
|
|
Purchases of services and others from non-consolidated parties
|
3,925
|
|
|
6,873
|
|
Purchases of services and others from other related parties
|
47,880
|
|
|
74,352
|
|
Purchases of goods and services in connection with lease contracts from other related parties
|
159
|
|
|
8,859
|
|
|
|
|
|
||
|
263,638
|
|
|
313,570
|
|
(c) Financial results
|
|
|
|
||
Income with non-consolidated parties
|
3,959
|
|
|
4,998
|
|
Expenses in connection with lease contracts from other related parties
|
(678
|
)
|
|
(104
|
)
|
|
|
|
|
||
|
3,281
|
|
|
4,894
|
|
(d) Dividends received
|
|
|
|
||
Dividends received from non-consolidated parties
|
—
|
|
|
642
|
|
|
|
|
|
||
|
—
|
|
|
642
|
|
(e) Other income and expenses
|
|
|
|
||
Income (expenses), net with non-consolidated parties
|
296
|
|
|
400
|
|
Income (expenses), net with other related parties
|
328
|
|
|
262
|
|
|
|
|
|
||
|
624
|
|
|
662
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||
|
(Unaudited)
|
|
|
||
(ii) Period-end balances
|
|
|
|
||
(a) Arising from sales/purchases of goods/services
|
|
|
|
||
Receivables from non-consolidated parties
|
128,055
|
|
|
167,312
|
|
Receivables from other related parties
|
1,318
|
|
|
5,027
|
|
Advances from non-consolidated parties
|
8,450
|
|
|
8,017
|
|
Advances to suppliers with other related parties
|
7,960
|
|
|
15,936
|
|
Payables to non-consolidated parties
|
(25,472
|
)
|
|
(44,784
|
)
|
Payables to other related parties
|
(22,592
|
)
|
|
(41,849
|
)
|
Lease Liabilities with other related parties
|
(4,310
|
)
|
|
(7,310
|
)
|
|
|
|
|
||
|
93,409
|
|
|
102,349
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
1)
|
Financial instruments by category
|
As of June 30, 2020 (in $ thousands)
|
|
Amortized
cost |
|
Assets at fair value through profit or loss
|
|
Assets at fair value through OCI
|
|
Total
|
||||
|
|
|
|
|
|
|
|
|
||||
(i) Assets as per statement of financial position
|
|
|
|
|
|
|
|
|
||||
Receivables
|
|
335,557
|
|
|
—
|
|
|
—
|
|
|
335,557
|
|
Derivative financial instruments
|
|
—
|
|
|
7,713
|
|
|
—
|
|
|
7,713
|
|
Trade receivables
|
|
723,695
|
|
|
—
|
|
|
—
|
|
|
723,695
|
|
Other investments
|
|
690,592
|
|
|
—
|
|
|
19,507
|
|
|
710,099
|
|
Cash and cash equivalents
|
|
192,347
|
|
|
262,212
|
|
|
—
|
|
|
454,559
|
|
|
|
|
|
|
|
|
|
|
||||
Total
|
|
1,942,191
|
|
|
269,925
|
|
|
19,507
|
|
|
2,231,623
|
|
|
|
|
|
|
|
|
|
|
||||
As of June 30, 2020 (in $ thousands)
|
|
Amortized
cost |
|
Liabilities at fair value through profit or loss
|
|
|
|
Total
|
||||
|
|
|
|
|
|
|
|
|
||||
(ii) Liabilities as per statement of financial position
|
|
|
|
|
|
|
|
|
||||
Other liabilities
|
|
68,870
|
|
|
—
|
|
|
|
|
68,870
|
|
|
Trade payables
|
|
697,754
|
|
|
—
|
|
|
|
|
697,754
|
|
|
Derivative financial instruments
|
|
—
|
|
|
924
|
|
|
|
|
924
|
|
|
Lease liabilities
|
|
302,417
|
|
|
—
|
|
|
|
|
302,417
|
|
|
Borrowings
|
|
2,082,039
|
|
|
—
|
|
|
|
|
2,082,039
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total
|
|
3,151,080
|
|
|
924
|
|
|
|
|
3,152,004
|
|
2)
|
Fair Value by Hierarchy
|
|
|
Fair value measurement as of June 30, 2020
(in $ thousands): |
|||||||
Description
|
|
Total
|
|
Level 1
|
|
Level 2
|
|||
Financial assets at fair value through profit or loss / OCI
|
|
|
|
|
|
|
|||
Cash and cash equivalents
|
|
262,212
|
|
|
262,212
|
|
|
—
|
|
Other investments
|
|
19,507
|
|
|
19,507
|
|
|
—
|
|
Derivative financial instruments
|
|
7,713
|
|
|
—
|
|
|
7,713
|
|
Total assets
|
|
289,432
|
|
|
281,719
|
|
|
7,713
|
|
|
|
|
|
|
|
|
|||
Financial liabilities at fair value through profit or loss / OCI
|
|
|
|
|
|
|
|||
Derivative financial instruments
|
|
924
|
|
|
—
|
|
|
924
|
|
Total liabilities
|
|
924
|
|
|
—
|
|
|
924
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
|
|
Fair value measurement as of December 31, 2019
(in $ thousands): |
|||||||
Description
|
|
Total
|
|
Level 1
|
|
Level 2
|
|||
Financial assets at fair value through profit or loss / OCI
|
|
|
|
|
|
|
|||
Cash and cash equivalents
|
|
199,877
|
|
|
199,877
|
|
|
—
|
|
Other investments
|
|
38,803
|
|
|
38,803
|
|
|
—
|
|
Derivative financial instruments
|
|
1,196
|
|
|
—
|
|
|
1,196
|
|
Total assets
|
|
239,876
|
|
|
238,680
|
|
|
1,196
|
|
|
|
|
|
|
|
|
|||
Financial liabilities at fair value through profit or loss / OCI
|
|
|
|
|
|
|
|||
Derivative financial instruments
|
|
3,024
|
|
|
—
|
|
|
3,024
|
|
Total liabilities
|
|
3,024
|
|
|
—
|
|
|
3,024
|
|
TERNIUM S.A.
|
|
|
Consolidated Condensed Interim Financial Statements as of June 30, 2020
|
||
and for the six-month periods ended June 30, 2020 and 2019
|
|
|
Pablo Brizzio
|
|
|
|
|
Chief Financial Officer
|
|
|
1 Year Ternium Chart |
1 Month Ternium Chart |
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