MEXICO CITY (Reuters) -Steel producer Ternium reported a 21.4% decrease in second-quarter net profit on Tuesday, as shipments remained flat and steel prices dropped, prompting it to forecast lower core earnings for the current quarter.
Net profit for the second quarter totaled $736 million, down from $936 million in the year-ago quarter.
Profit in the first six months of the year was $1.21 billion, a 33% drop from last year.
Revenue in the second quarter fell 12.8% to $3.87 billion as volumes rose 1% year-over-year, but steel prices declined in Ternium’s main markets, the company said in a statement.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) stood at $883 million, a 28% slide from the same three-month period in 2022.
The company expects a further decline in its EBITDA for the third quarter, as steel prices continue to fall along with a slight increase in cost per ton, it said in the statement.
Ternium operates across Latin America, including in Brazil, Mexico, Argentina, Colombia and Guatemala, as well as in the United States.
A leading regional producer of flat steel products for a range of industries, Ternium is controlled by Argentina’s Techint Group.
Last month, the steelmaker announced it had resumed operations at an iron ore mine in western Mexico after a more-than-five-month hiatus sparked by a blockade by the local community over the disappearance of two environmental activists.
In Mexico, the company expects higher sequential shipments in the third quarter, driven by the automotive and white-goods industrial sectors.
However, Argentina’s steel market could be affected in the second half of the year by high inflation, constraints to raw material imports, and upcoming election-related uncertainty.
(Reporting by Valentine Hilaire, Carolina Pulice and Aida Pelaez-Fernandez; Editing by Kylie Madry and Bill Berkrot)
