FORM 6 - K



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934

As of 08/01/2023

Ternium S.A.
(Translation of Registrant's name into English)

Ternium S.A.
26 Boulevard Royal – 4th floor
L-2449 Luxembourg
(352) 2668-3152
(Address of principal executive offices)


Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or 40-F.

Form 20-F a Form 40-F __

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12G3-2(b) under the Securities Exchange Act of 1934.

Yes __ No a


If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
Not applicable


The attached material is being furnished to the Securities and Exchange Commission pursuant to Rule 13a-16 and Form 6-K under the Securities Exchange Act of 1934, as amended.
This report contains Ternium S.A.’s consolidated financial statements as of June 30, 2023.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



TERNIUM S.A.

By: /s/ Guillermo Etchepareborda
By:/s/ Sebastián Martí
Name: Guillermo EtcheparebordaName: Sebastián Martí
Title: Attorney in FactTitle: Attorney in Fact
            

Dated: August 1, 2023






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TERNIUM S.A.
Consolidated Condensed Interim Financial Statements
as of June 30, 2023
and for the six-month periods
ended on June 30, 2023 and 2022

26 Boulevard Royal, 4th floor
L – 2449 Luxembourg
R.C.S. Luxembourg: B 98 668



INDEX
Page
Consolidated Condensed Interim Statements of Financial Position
Consolidated Condensed Interim Statements of Changes in Equity
Consolidated Condensed Interim Statements of Cash Flows
Notes to the Consolidated Condensed Interim Financial Statements
1
General information and basis of presentation
2
Accounting policies
3
Segment information
4
Cost of sales
5
Selling, general and administrative expenses
6
Finance expense, Finance income and Other financial income (expenses), net
7
Property, plant and equipment, net
8
Intangible assets, net
9
Investments in non-consolidated companies
10Distribution of dividends
11
Contingencies, commitments and restrictions on the distribution of profits
12
Related party transactions
13
Financial instruments by category and fair value measurement
14Foreign exchange restrictions in Argentina
15The Russia-Ukraine armed conflict
16Ternium to integrate operations in the USMCA
17Ternium to Increase its Participation in Usiminas Control Group - New Governance Structure of Usiminas

Page 1 of
    
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022
(All amounts in $ thousands)







Consolidated Condensed Interim Income Statements
Three-month period ended
June 30, 		Six-month period ended
June 30,
Notes2023202220232022
(Unaudited)(Unaudited)
Net sales33,871,272 4,437,676 7,494,643 8,742,505 
Cost of sales4(2,839,419)(3,058,908)(5,820,170)(6,043,093)
Gross profit 1,031,853 1,378,768 1,674,473 2,699,412 
Selling, general and administrative expenses5(304,271)(310,444)(597,195)(591,747)
Other operating income, net 4,159 2,828 11,853 22,502 
Operating income 3731,741 1,071,152 1,089,131 2,130,167 
Finance expense6(17,542)(7,313)(33,742)(13,935)
Finance income642,033 15,636 83,479 39,953 
Other financial (expense) income, net 6(42,481)28,856 (59,900)(49,711)
Equity in earnings of non-consolidated companies927,301 49,273 62,176 108,022 
Profit before income tax credit (expense)741,052 1,157,604 1,141,144 2,214,496 
Income tax credit (expense)(5,169)(221,419)74,259 (400,793)
Profit for the period735,883 936,185 1,215,403 1,813,703 
Attributable to:
Owners of the parent626,930 799,270 1,001,304 1,574,891 
Non-controlling interest108,953 136,915 214,099 238,812 
Profit for the period735,883 936,185 1,215,403 1,813,703 
Weighted average number of shares outstanding1,963,076,7761,963,076,776 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)0.320.410.510.80
The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2022.
Page 2 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022
(All amounts in $ thousands)







Consolidated Condensed Interim Statements of Comprehensive Income
Three-month period ended
June 30, 		Six-month period ended
June 30,
2023202220232022
(Unaudited)(Unaudited)
Profit for the period735,883936,185 1,215,403 1,813,703 
Items that may be reclassified subsequently to profit or loss:
Currency translation adjustment1,591 10 3,240 562 
Currency translation adjustment from participation in non-consolidated companies42,305 (84,417)62,610 42,311 
Changes in the fair value of financial instruments at fair value through other comprehensive income(95,706)(11,595)(123,732)(39,588)
Income tax related to financial instruments at fair value(31,779)3,913 (21,758)13,496 
Changes in the fair value of derivatives classified as cash flow hedges— 23 — 55 
Income tax related to cash flow hedges— (7)— (17)
Other comprehensive income items from participation in non-consolidated companies(37)106 415 205 
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of post employment benefit obligations(879)(656)(879)(3,042)
Income tax relating to remeasurement of post employment benefit obligations328 314 328 1,025 
Remeasurement of post employment benefit obligations from participation in non-consolidated companies(7,745)(1,559)(7,561)(1,930)
Other comprehensive income (loss) for the period, net of tax(91,922)(93,868)(87,337)13,077 
Total comprehensive income for the period 643,961 842,317 1,128,066 1,826,780 
Attributable to:
Owners of the parent510,092 714,115 894,029 1,594,843 
Non-controlling interest133,869 128,202 234,037 231,937 
Total comprehensive income for the period 643,961 842,317 1,128,066 1,826,780 
The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2022.
Page 3 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022
(All amounts in $ thousands)







Consolidated Condensed Interim Statements of Financial Position
Balances as of
NotesJune 30, 2023December 31, 2022
(Unaudited)
ASSETS
Non-current assets
Property, plant and equipment, net76,324,307 6,261,887 
Intangible assets, net8968,124 944,409 
Investments in non-consolidated companies9938,998 821,571 
Other investments102,931 100,716 
Deferred tax assets348,858 200,237 
Receivables, net409,351 9,092,569 318,690 8,647,510 
Current assets
Receivables, net719,446 662,762 
Derivative financial instruments— 227 
Inventories, net3,758,603 3,470,215 
Trade receivables, net1,412,260 1,180,689 
Other investments2,031,761 1,875,026 
Cash and cash equivalents920,404 8,842,474 1,653,355 8,842,274 
Non-current assets classified as held for sale1,764 1,764 
8,844,238 8,844,038 
Total Assets  17,936,807   17,491,548 
    
EQUITY     
Capital and reserves attributable to the owners of the parent  12,386,634   11,845,959 
Non-controlling interest  1,922,933   1,922,434 
Total Equity 14,309,567 13,768,393 
LIABILITIES
Non-current liabilities    
Provisions84,891   81,422 
Deferred tax liabilities25,271   162,742 
Other liabilities603,186   538,214 
Trade payables 1,314 1,112 
Lease liabilities179,428 190,134 
Borrowings514,521 1,408,611 532,701 1,506,325 
Current liabilities
Current income tax liabilities108,480 135,703 
Other liabilities 350,226 344,843 
Trade payables 1,321,932 1,187,600 
Derivative financial instruments14,044 505 
Lease liabilities46,114 49,015 
Borrowings 377,833 2,218,629 499,164 2,216,830 
Total Liabilities 3,627,240   3,723,155 
  
Total Equity and Liabilities17,936,807   17,491,548 
The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2022.

Page 4 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022
(All amounts in $ thousands)
Consolidated Condensed Interim Statements of Changes in Equity
Attributable to the owners of the parent (1)
Capital stock
(2)		Treasury shares
(2)		Initial public offering expensesReserves
(3) 		Capital stock issue discount
(4)		Currency translation adjustmentRetained earningsTotalNon-controlling interestTotal Equity
Balance as of January 1, 20232,004,743 (150,000)(23,295)1,394,567 (2,324,866)(2,859,068)13,803,878 11,845,959 1,922,434 13,768,393 
Profit for the period1,001,304 1,001,304 214,099 1,215,403 
Other comprehensive income (loss) for the period
Currency translation adjustment60,495 60,495 5,355 65,850 
Remeasurement of post employment benefit obligations(7,544)(7,544)(568)(8,112)
Others (5)(160,226)(160,226)15,151 (145,075)
Total comprehensive income (loss) for the period— — — (167,770)— 60,495 1,001,304 894,029 234,037 1,128,066 
Dividends paid in cash (6)(353,354)(353,354)— (353,354)
Dividends paid in kind to non-controlling interest— (233,538)(233,538)
Balance as of June 30, 2023 (unaudited)2,004,743 (150,000)(23,295)1,226,797 (2,324,866)(2,798,573)14,451,828 12,386,634 1,922,933 14,309,567 

(1) Shareholders’ equity is determined in accordance with accounting principles generally accepted in Luxembourg.
(2) The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $ 1.00 per share. As of June 30, 2023, there were 2,004,743,442 shares issued. All issued shares are fully paid. Also, as of June 30, 2023, the Company held 41,666,666 shares as treasury shares.
(3) Includes legal reserve under Luxembourg law for $ 200.5 million, undistributable reserves under Luxembourg law for $ 1.4 billion and reserves related to the acquisition of non-controlling interest in subsidiaries for $ (72.4) million.
(4) Represents the difference between book value of non-monetary contributions received from shareholders under Luxembourg GAAP and IFRS.
(5) Includes mainly the changes of the fair value of financial instruments at fair value through other comprehensive income, net of tax.
(6) See note 10.

Dividends may be paid by Ternium to the extent distributable retained earnings calculated in accordance with Luxembourg law and regulations exist. Therefore, retained earnings included in these consolidated condensed interim financial statements may not be wholly distributable.
The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2022.
Page 5 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for six-month periods ended June 30, 2023 and 2022
(All amounts in $ thousands)
Consolidated Condensed Interim Statements of Changes in Equity
Attributable to the owners of the parent (1)
Capital stock
(2)		Treasury shares
(2)		Initial public offering expensesReserves
(3) 		Capital stock issue discount
(4)		Currency translation adjustmentRetained earningsTotalNon-controlling interestTotal Equity
Balance as of January 1, 20222,004,743 (150,000)(23,295)1,360,637 (2,324,866)(2,898,593)12,566,393 10,535,019 1,700,019 12,235,038 
Profit for the period1,574,891 1,574,891 238,812 1,813,703 
Other comprehensive income (loss) for the period
Currency translation adjustment39,807 39,807 3,066 42,873 
Remeasurement of post employment benefit obligations(3,370)(3,370)(577)(3,947)
Cash flow hedges, net of tax19 19 19 38 
Others (5)(16,504)(16,504)(9,383)(25,887)
Total comprehensive income (loss) for the period— — — (19,855)— 39,807 1,574,891 1,594,843 231,937 1,826,780 
Dividends paid in cash(353,354)(353,354)— (353,354)
Acquisition of non-controlling interest (6)(223)(223)(3,993)(4,216)
Balance as of June 30, 2022 (unaudited)2,004,743 (150,000)(23,295)1,340,559 (2,324,866)(2,858,786)13,787,930 11,776,285 1,927,963 13,704,248 
(1) Shareholders’ equity is determined in accordance with accounting principles generally accepted in Luxembourg.
(2) The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $ 1.00 per share. As of June 30, 2022, there were 2,004,743,442 shares issued. All issued shares are fully paid. Also, as of June 30, 2022, the Company held 41,666,666 shares as treasury shares.
(3) Include legal reserve under Luxembourg law for $ 200.5 million, undistributable reserves under Luxembourg law for $ 1.4 billion and reserves related to the acquisition of non-controlling interest in subsidiaries for $ (72.4) million.
(4) Represents the difference between book value of non-monetary contributions received from shareholders under Luxembourg GAAP and IFRS.
(5) Includes mainly the changes of the fair value of financial instruments at fair value through other comprehensive income, net of tax.
(6) Corresponds to the acquisition of non-controlling interest participation of Ternium Argentina S.A..

Dividends may be paid by Ternium to the extent distributable retained earnings calculated in accordance with Luxembourg law and regulations exist. Therefore, retained earnings included in these consolidated condensed interim financial statements may not be wholly distributable.
The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2022.
Page 6 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022
(All amounts in $ thousands)

Consolidated Condensed Interim Statements of Cash Flows
Six-month period ended
June 30,
Notes20232022
(Unaudited)
Cash flows from operating activities
Profit for the period1,215,403 1,813,703 
Adjustments for:
Depreciation and amortization 7 & 8301,499 302,894 
Income tax accruals less payments (273,426)(1,084,086)
Equity in earnings of non-consolidated companies9(62,176)(108,022)
Interest accruals less payments/receipts, net(76,103)3,989 
Changes in provisions40 (1,732)
Changes in working capital (1)(386,874)(349,988)
Net foreign exchange results and others (58,135)110,265 
Net cash provided by operating activities660,228 687,023 
Cash flows from investing activities
Capital expenditures 7 & 8(395,440)(285,633)
Increase in other investments(448,881)(195,251)
Proceeds from the sale of property, plant and equipment 878 794 
Dividends received from non-consolidated companies15,162 28,884 
Acquisition of non-controlling interest— (4,216)
Net cash used in investing activities(828,281)(455,422)
Cash flows from financing activities
Dividends paid in cash to company’s shareholders(353,354)(353,354)
Finance lease payments(26,966)(24,892)
Proceeds from borrowings72,616 153,590 
Repayments of borrowings(227,191)(541,498)
Net cash used in financing activities(534,895)(766,154)
Decrease in cash and cash equivalents(702,948)(534,553)
Movement in cash and cash equivalents
At January 1, 1,653,355 1,276,605 
Effect of exchange rate changes(30,003)(22,903)
Decrease in cash and cash equivalents(702,948)(534,553)
Cash and cash equivalents as of June 30, (2)920,404 719,149 
Non-cash transactions:
Dividends paid in kind to non-controlling interest(233,538)— 
Acquisition of PP&E under lease contract agreements1,939 5,769 

(1) The working capital is impacted by non-cash movements of $ 41.5 million as of June 30, 2023 ($ 10.8 million as of June 30, 2022) due to the variations in the exchange rates used by subsidiaries.
(2) It includes restricted cash of $ 98 and $ 55 as of June 30, 2023 and 2022, respectively. In addition, the Company had other investments with a maturity of more than three months for $ 2,134,536 and $ 1,410,314 as of June 30, 2023 and 2022, respectively.

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2022.
Page 7 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022


Notes to the Consolidated Condensed Interim Financial Statements

1.GENERAL INFORMATION AND BASIS OF PRESENTATION

Ternium S.A. (the “Company” or “Ternium”), was incorporated on December 22, 2003 to hold investments in flat and long steel manufacturing and distributing companies.  The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $ 1.00 per share. As of June 30, 2023, there were 2,004,743,442 shares issued. All issued shares are fully paid.

Ternium’s American Depositary Shares (“ADS”) trade on the New York Stock Exchange under the symbol “TX”. 

The name and percentage of ownership of subsidiaries that have been included in consolidation in these Consolidated Condensed Interim Financial Statements are disclosed in Note 2 to the audited Consolidated Financial Statements for the year ended December 31, 2022.

The preparation of Consolidated Condensed Interim Financial Statements requires management to make estimates and assumptions that might affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the statement of financial position, and also the reported amounts of revenues and expenses for the reported periods. Actual results may differ from these estimates. The main assumptions and estimates were disclosed in the Consolidated Financial Statements for the year ended December 31, 2022, without significant changes since its publication.

2.    ACCOUNTING POLICIES

These Consolidated Condensed Interim Financial Statements have been prepared in accordance with IAS 34, “Interim Financial Reporting” and are unaudited. These Consolidated Condensed Interim Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2022, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and in conformity with International Financial Reporting Standards as adopted by the European Union (“EU”). Recently issued accounting pronouncements were applied by the Company as from their respective dates.

These Consolidated Condensed Interim Financial Statements have been prepared following the same accounting policies used in the preparation of the audited Consolidated Financial Statements for the year ended December 31, 2022.

None of the accounting pronouncements issued after December 31, 2022, and as of the date of these Consolidated Condensed Interim Financial Statements have a material effect on the Company’s financial condition or result or operations.










Page 8 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022

3.    SEGMENT INFORMATION

OPERATING SEGMENTS

The Company is organized in two operating segments: Steel and Mining.

The Steel segment includes the sales of steel products, which comprises mainly slabs, hot and cold rolled products, coated products, roll-formed and tubular products, billets, bars and other products.

The Mining segment includes the sales of mining products, mainly iron ore and pellets, and comprises the mining activities of Las Encinas, an iron ore mining company in which Ternium holds a 100% equity interest and the 50% of the operations and results performed by Peña Colorada, another iron ore mining company in which Ternium maintains that same percentage over its equity interest.

Ternium’s Chief Executive Officer (“CEO”) functions as the Company’s Chief Operating Decision Maker (“CODM”). The various geographic regions operate as an integrated steel producer. The CEO allocates resources and assesses performance of the Steel Segment as an integrated business and of the Mining Segment. The CEO uses “Operating income – Management view” as per the below table as the performance measure which differs from operating income determined in accordance with IFRS principally as follows:
• The use of direct cost methodology to calculate the inventories, while under IFRS is at full cost, including absorption of production overheads and depreciation.
• The use of costs based on previously internally defined cost estimates, while, under IFRS, costs are calculated at historical cost (with the FIFO method).
• Other non-significant differences.

Six-month period ended June 30, 2023 (Unaudited)
SteelMiningInter-segment eliminationsTotal
Operating income - Management view1,117,369 (30,944)(8,880)1,077,545 
Reconciliation:
Differences in Cost of sales11,586 
Operating income - Under IFRS1,089,131 
Financial income (expense), net(10,163)
Equity in earnings (losses) of non-consolidated companies62,176 
Income before income tax expense - IFRS1,141,144 
Net sales from external customers7,494,547 96 — 7,494,643 
Net sales from transactions with other operating segments of the same entity— 194,770 (194,770)— 
Depreciation and amortization(252,500)(48,999)— (301,499)
Six-month period ended June 30, 2022 (Unaudited)
SteelMiningInter-segment eliminationsTotal
Operating income - Management view1,474,243 21,311 6,061 1,501,615 
Reconciliation:
Differences in Cost of sales628,552 
Operating income - Under IFRS2,130,167 
Financial income (expense), net(23,693)
Equity in earnings (losses) of non-consolidated companies108,022 
Income before income tax expense - IFRS2,214,496 
Net sales from external customers8,742,442 63 — 8,742,505 
Net sales from transactions with other operating segments of the same entity— 213,490 (213,490)— 
Depreciation and amortization(260,608)(42,286)— (302,894)
Information on segment assets is not disclosed as it is not reviewed by the CEO.
Page 9 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022


3.    SEGMENT INFORMATION (continued)

GEOGRAPHICAL INFORMATION

The Company had no revenues attributable to the Company’s country of incorporation (Luxembourg) in 2023.

For purposes of reporting geographical information, net sales are allocated based on the customer’s location. Allocation of depreciation and amortization is based on the geographical location of the underlying assets.

Six-month period ended June 30, 2023 (Unaudited)
MexicoSouthern regionBrazil and other marketsTotal
Net sales 4,713,028 1,738,048 1,043,567 7,494,643 
Non-current assets (1)4,859,342 870,248 1,562,841 7,292,431 
Six-month period ended June 30, 2022 (Unaudited)
MexicoSouthern regionBrazil and other marketsTotal
Net sales 4,779,293 1,892,019 2,071,193 8,742,505 
Non-current assets (1)4,767,553 860,474 1,695,154 7,323,181 
(1) Includes Property, plant and equipment and Intangible assets.
    
4.COST OF SALES
Six-month period ended
June 30,
20232022
(Unaudited)
Inventories at the beginning of the year3,470,214 3,908,305 
Plus: Charges for the period
Raw materials and consumables used and
other movements		5,002,579 5,504,178 
Services and fees99,133 86,242 
Labor cost397,802 477,049 
Depreciation of property, plant and equipment260,729 263,829 
Amortization of intangible assets18,923 19,591 
Maintenance expenses341,107 310,841 
Office expenses6,180 4,503 
Valuation allowance(15,333)— 
Insurance7,762 7,692 
Change of obsolescence allowance(478)12,140 
Recovery from sales of scrap and by-products(21,102)(21,213)
Others11,257 10,367 
Less: Inventories at the end of the period(3,758,603)(4,540,431)
Cost of Sales5,820,170 6,043,093 
Page 10 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022


5.SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Six-month period ended
June 30,
20232022
(Unaudited)
Services and fees40,22437,091
Labor cost156,460160,898
Depreciation of property, plant and equipment7,4846,783
Amortization of intangible assets14,36312,691
Maintenance and expenses4,0954,634
Taxes79,43685,183
Office expenses25,85420,485
Freight and transportation244,211260,347
Increase of allowance for doubtful accounts12,294 486 
Others12,7743,149
Selling, general and administrative expenses  597,195 591,747 

6.FINANCE EXPENSE, FINANCE INCOME AND OTHER FINANCIAL INCOME (EXPENSES), NET
Six-month period ended
June 30,
20232022
(Unaudited)
Interest expense(33,742)(13,935)
Finance expense(33,742)(13,935)
Interest income83,479 39,953 
Finance income83,479 39,953 
Net foreign exchange loss (1)(40,439)(118,359)
Change in fair value of financial assets26,307 80,663 
Derivative contract results(36,104)(1,801)
Others(9,664)(10,214)
Other financial (expenses) income, net (59,900)(49,711)
(1) Mainly related to the devaluation of the Argentine peso.

7.    PROPERTY, PLANT AND EQUIPMENT, NET
Six-month period ended
June 30,
20232022
(Unaudited)
At the beginning of the year6,261,887 6,431,578 
Currency translation differences1,501 282 
Additions340,326 245,665 
Value adjustments of lease contracts5,926 15,919 
Disposals(17,180)(13,446)
Depreciation charge(268,213)(270,612)
Capitalized borrowing costs— 403 
Transfers and reclassifications60 (2,193)
At the end of the period6,324,307 6,407,596 
Page 11 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022


8.    INTANGIBLE ASSETS, NET
 Six-month period ended
June 30,
20232022
(Unaudited)
At the beginning of the year944,409 902,256 
Currency translation differences8 — 
Additions57,053 43,418 
Amortization charge(33,286)(32,282)
Transfers/Disposals(60)2,193 
At the end of the period968,124 915,585 


9.INVESTMENTS IN NON-CONSOLIDATED COMPANIES

CompanyCountry of incorporationMain activityVoting rights as ofValue as of
June 30, 2023December 31, 2022June 30, 2023December 31, 2022
Usinas Siderurgicas de Minas Gerais S.A. - USIMINASBrazilManufacturing and selling of steel products34.39%34.39%827,141725,705
Techgen S.A. de C.V.MexicoProvision of electric power48.00%48.00%106,80390,559
Other non-consolidated companies (1)5,0545,307
938,998821,571
(1) It includes the investments held in Finma S.A.I.F., Recrotek S.R.L. de C.V. and Gas Industrial de Monterrey S.A. de C.V.

Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS

As of June 30, 2023, Ternium, through its subsidiaries, owns a total of 242.6 million ordinary shares and 8.5 million preferred shares, representing 20.4% of the issued and outstanding share capital of Usinas Siderurgicas de Minas Gerais S.A. – USIMINAS (“Usiminas”), one of the main producers of flat steel products in Brazil for the energy, automotive and other industries.

Ternium, through its subsidiaries, together with Tenaris S.A.’s Brazilian subsidiary Confab Industrial S.A. (“TenarisConfab”), are part of Usiminas’ control group, comprising the so-called T/T Group. As of June 30, 2023, the Usiminas control group holds, in the aggregate, 483.6 million ordinary shares bound to the Usiminas shareholders’ agreement, representing approximately 68.6% of Usiminas’ voting capital. The Usiminas control group, which is bound by a long-term shareholders’ agreement that governs the rights and obligations of Usiminas’ control group members, is currently composed of three sub-groups: the T/T Group; the NSC Group, comprising Nippon Steel Corporation (“NSC”), Metal One Corporation and Mitsubishi Corporation; and Usiminas’ pension fund Previdência Usiminas. The T/T Group holds approximately 47.1% of the total shares held by the control group (39.5% corresponding to the Ternium entities and the other 7.6% corresponding to TenarisConfab); the NSC Group holds approximately 45.9% of the total shares held by the control group; and Previdência Usiminas holds the remaining 7%.

Page 12 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022


9.INVESTMENTS IN NON-CONSOLIDATED COMPANIES (continued)

The corporate governance rules reflected in the Usiminas shareholders agreement provide, among other things, that Usiminas’ executive board will be composed of six members, including the chief executive officer and five vice-presidents, with Ternium and NSC nominating three members each. The right to nominate Usiminas’ chief executive officer alternates between Ternium and NSC at every 4-year interval, with the party that does not nominate the chief executive officer having the right to nominate the chairman of Usiminas’ board of directors for the same 4-year period. The Usiminas shareholders agreement also provides for an exit mechanism consisting of a buy-and-sell procedure—exercisable at any time after November 16, 2022, and applicable with respect to shares held by NSC and the T/T Group—, which would allow either Ternium or NSC to purchase all or a majority of the Usiminas shares held by the other shareholder.

As of June 30, 2023, the closing price of the Usiminas ordinary and preferred shares, as quoted on the BM&F Bovespa Stock Exchange, was BRL7.29 (approximately $1.51; December 31, 2022: BRL7.41 – $1.42) per ordinary share and BRL7.07 (approximately $1.47; December 31, 2022: BRL7.16 – $1.37) per preferred share, respectively. Accordingly, as of June 30, 2023, Ternium’s ownership stake had a market value of approximately $379.4 million ($356.2 million as of December 31, 2022) and a carrying value of $827.1 million ($725.7 million as of December 31, 2022).

Although as of June 30, 2023, the market value continued to be below the book value, considering the financial results of Usiminas for the quarter and market expectations, there was no other objective evidence of impairment and, consequently, Management concluded that there was no need to recognize any impairment charges and that it would continue to review periodically the recoverability of this investment.

As of June 30, 2023, the value of the investment in Usiminas is comprised as follows:

Value of investmentUSIMINAS
As of January 1, 2023725,705 
Share of results (1)46,158 
Other comprehensive income (2)55,278 
As of June 30, 2023827,141 
(1) It includes the adjustment of the values associated to the purchase price allocation.
(2) It includes mainly the effect of the currency translation adjustment.

The investment in Usiminas is based on the following calculation:
Usiminas' shareholders' equity4,919,866 
Percentage of interest of the Company over shareholders' equity20.40 %
Interest of the Company over shareholders' equity1,003,324 
Purchase price allocation61,345 
Goodwill215,686 
Impairment(453,214)
Total Investment in Usiminas827,141 

On July 28, 2023, Usiminas issued its consolidated interim accounts as of and for the six-month period ended June 30, 2023.


Page 13 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022


9.     INVESTMENTS IN NON-CONSOLIDATED COMPANIES (continued)
USIMINAS
Summarized balance sheet (in million $)As of June 30, 2023
Assets
Non-current4,312 
Current2,908 
Other current investments247 
Cash and cash equivalents778 
Total Assets8,245 
Liabilities
Non-current600 
Non-current borrowings1,198 
Current964 
Current borrowings27 
Total Liabilities2,789 
Non-controlling interest536 
Shareholders' equity4,920 
Summarized income statement (in million $)Six-month period ended
June 30, 2023
Net sales2,788 
Cost of sales(2,500)
Gross Profit288 
Selling, general and administrative expenses(109)
Other operating income (loss), net(70)
Operating income109 
Financial income (expenses), net79 
Equity in earnings of associated companies21 
Profit before income tax209 
Income tax expense(46)
Net profit before non-controlling interest163 
Non-controlling interest in other subsidiaries(20)
Net profit for the period143 

Techgen S.A. de C.V.

Techgen stated as of and for the six-month period ended June 30, 2023, that revenues amounted to $221 million ($275 million for the six-month period ended June 30, 2022), net profit from continuing operations to $34 million ($28 million for the six-month period ended June 30, 2022), non-current assets to $778 million ($766 million as of December 31, 2022), current assets to $143 million ($131 million as of December 31, 2022), non-current liabilities to $494 million ($527 million as of December 31, 2022), current liabilities to $205 million ($181 million as of December 31, 2022) and shareholders’ equity to $222 million ($189 million as of December 31, 2022).










Page 14 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022


10. DISTRIBUTION OF DIVIDENDS

During the annual shareholders’ meeting held on May 2, 2023, the shareholders approved a distribution of dividends of USD 0.27 per share (USD 2.70 per ADS). The annual dividend included the interim dividend of $0.09 per share ($0.90 per ADS) paid in November 2022. A net dividend of $0.18 per share ($1.80 per ADS) was paid on May 10, 2023, of approximately USD 360.9 million in the aggregate.

11.    CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS

Contingencies, commitments and restrictions on the distributions of profits should be read in Note 24 to the Company’s audited Consolidated Financial Statements for the year ended December 31, 2022.

(i) Tax claims and other contingencies

Companhia Siderúrgica Nacional (CSN) - Tender offer litigation
In 2013, the Company was notified of a lawsuit filed in Brazil by Companhia Siderúrgica Nacional, or CSN, and various entities affiliated with CSN against Ternium Investments, its subsidiary Ternium Argentina, and TenarisConfab. The entities named in the CSN lawsuit had acquired a participation in Usiminas in January 2012. The CSN lawsuit alleges that, under applicable Brazilian laws and rules, the acquirers were required to launch a tag-along tender offer to all non-controlling holders of Usiminas ordinary shares for a price per share equal to 80% of the price per share paid in such acquisition, or BRL 28.8, and seeks an order to compel the acquirers to launch an offer at that price plus interest. If so ordered, the offer would need to be made to 182,609,851 ordinary shares of Usiminas not belonging to Usiminas’ control group; Ternium Investments and Ternium Argentina’s respective shares in the offer would be 60.6% and 21.5%.

On September 23, 2013, the first instance court dismissed the CSN lawsuit, and on February 8, 2017, the court of appeals of São Paulo maintained the understanding of the first instance court. On March 6, 2017, CSN filed a motion for clarification against the decision of the court of appeals, which was rejected on July 19, 2017. On August 18, 2017, CSN filed with the court of appeals an appeal seeking the review and reversal of the decision issued by the court of appeals by the Superior Court of Justice. On March 5, 2018, the court of appeals ruled that CSN’s appeal did not meet the requirements for review by the Superior Court of Justice and rejected such appeal. On May 8, 2018, CSN appealed against such ruling and on January 22, 2019, the court of appeals rejected such appeal and ordered that the case be submitted to the Superior Court of Justice. On September 10, 2019, the Superior Court of Justice declared CSN’s appeal admissible. On March 7, 2023, the Superior Court of Justice, by majority vote, rejected CSN’s appeal. CSN has made several submissions in connection with the Supreme Court of Justice decision, including a motion for clarification. In addition, plaintiffs may appeal against the Superior Court of Justice’s decision. At this time, the Company cannot predict whether CSN will appeal against the decision and, if appealed, the ultimate resolution of the matter.

Ternium continues to believe that all of CSN’s claims and allegations are groundless and without merit, as confirmed by several opinions of Brazilian legal counsel, two decisions issued by the Brazilian securities regulator (CVM) in February 2012 and December 2016, the first and second instance court decisions and the March 2023 Superior Court of Justice decision referred to above.



Page 15 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022


11.    CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS (continued)

(ii) Commitments
(a) Ternium Argentina also signed various contracts for the provision of natural gas, including Tecpetrol and Energy Consulting Services S.A., both related companies of Ternium, assuming firm commitments for a total of $ 74.4 million payable until April 2025. Additionally, Ternium Argentina signed contracts for gas transportation with Transportadora de Gas del Norte S.A., a related company of Ternium, assuming firm commitments for a total of $ 14.6 million payable until April 2028.

(b) Ternium Argentina signed an agreement with Air Liquide Argentina S.A. for the supply of oxygen, nitrogen and argon until 2021, for an aggregate amount of $ 107.6 million, which is due to terminate in 2037.

(c) Ternium Argentina signed various contracts within its investment plan for the future acquisition of Property, plant and equipment for a total of $ 172.2 million. Also, Vientos de Olavarría, a subsidiary controlled by Ternium Argentina, subscribed various contracts for the maintenance and the operation of the wind farm for a total of $ 44.0 million payable until the year 2054.

(d) Ternium México issued a guarantee letter covering up to approximately $28.8 million of the obligations of Gas Industrial de Monterrey, S.A. de C.V. (“GIMSA”), under the natural gas trading agreement between GIMSA and NEG Natural S.A. de C.V. (“NEG”) The credit line granted by NEG in connection with this natural gas trading agreement amounted to approximately $ 19.8 million. As of June 30, 2023, the outstanding amount under the natural gas trading agreement was $7.0 million, which is below the amount included in the guarantee letter issued by Ternium México. The contract with NEG was renewed in June 28, 2022, and the guarantee letter covering up to the above-mentioned amount was issued in January 2023.

Page 16 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022


12.    RELATED PARTY TRANSACTIONS

As of June 30, 2023, Techint Holdings S.à r.l. (“Techint”) indirectly owned 65.03% of the Company’s share capital and Tenaris Investments S.à r.l. (“Tenaris”) held 11.46% of the Company’s share capital. Each of Techint and Tenaris were controlled by San Faustin S.A., a Luxembourg company (“San Faustin”). Rocca & Partners Stichting Administratiekantoor Aandelen San Faustin (“RP STAK”), a private foundation (Stichting) located in the Netherlands, held voting shares in San Faustin sufficient in number to control San Faustin. No person or group of persons controls RP STAK.
The following transactions were carried out with related parties:
Six-month period ended
June 30,
20232022
(Unaudited)
(i) Transactions
(a) Sales of goods and services
Sales of goods to non-consolidated parties119,256 374,962 
Sales of goods to other related parties64,221 110,500 
Sales of services and others to non-consolidated parties84 89 
Sales of services and others to other related parties1,935 2,136 
185,496 487,687 
(b) Purchases of goods and services
Purchases of goods from non-consolidated parties208,018 314,071 
Purchases of goods from other related parties35,709 36,560 
Purchases of services and others from non-consolidated parties5,784 6,477 
Purchases of services and others from other related parties40,902 39,594 
290,413 396,702 
(c) Financial results
Income with non-consolidated parties6,204 3,383 
Expenses in connection with lease contracts from other related parties (396)(527)
5,808 2,856 
(d) Dividends
Dividends from non-consolidated parties214 1,007 
214 1,007 
(e) Other income and expenses
Income (expenses), net with non-consolidated parties1,539 943 
Income (expenses), net with other related parties757 422 
2,296 1,365 
June 30, 2023December 31, 2022
(Unaudited)
(ii) Period-end balances
(a) Arising from sales/purchases of goods/services
Receivables from non-consolidated parties144,312 180,476 
Receivables from other related parties13,601 43,765 
Advances to non-consolidated parties3,475 4,851 
Advances to suppliers with other related parties3,341 3,683 
Payables to non-consolidated parties(96,537)(91,172)
Payables to other related parties(23,848)(20,163)
Lease Liabilities with other related parties(1,869)(2,287)
42,475 119,153 
Page 17 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022

13.    FINANCIAL INSTRUMENTS BY CATEGORY AND FAIR VALUE MEASUREMENT


1)Financial instruments by category

The accounting policies for financial instruments have been applied to the line items below. According to the scope and definitions set out in IFRS 7 and IAS 32, employers’ rights and obligations under employee benefit plans, and non-financial assets and liabilities such as advanced payments and income tax payables, are not included.
As of June 30, 2023 (in $ thousands)Amortized
cost		Assets at fair value through profit or lossAssets at fair value through OCITotal
(i) Assets as per statement of financial position
Receivables191,008 — — 191,008 
Trade receivables1,412,260 — — 1,412,260 
Other investments788,414 65,769 1,280,353 2,134,536 
Cash and cash equivalents527,961 330,550 61,893 920,404 
Total2,919,643 396,319 1,342,246 4,658,208 
As of June 30, 2023 (in $ thousands)Amortized
cost		Liabilities at fair value through profit or lossTotal
(ii) Liabilities as per statement of financial position
Other liabilities71,997 — 71,997 
Trade payables1,262,511 — 1,262,511 
Derivative financial instruments— 14,044 14,044 
Lease liabilities225,542 — 225,542 
Borrowings892,354 — 892,354 
Total2,452,404 14,044 2,466,448 

2)Fair Value by Hierarchy
IFRS 13 requires for financial instruments that are measured at fair value, a disclosure of fair value measurements by level. See note 28 of the Consolidated Financial Statements as of December 31, 2022 for definitions of levels of fair values and figures at that date.
The following table presents the assets and liabilities that are measured at fair value:
Fair value measurement as of June 30, 2023
(in $ thousands):
DescriptionTotalLevel 1Level 2Level 3
Financial assets at fair value through profit or loss / OCI
Cash and cash equivalents392,443 392,443 — — 
Other investments1,346,122 1,233,877 87,397 24,848 
Total assets1,738,565 1,626,320 87,397 24,848 
Financial liabilities at fair value through profit or loss / OCI
Derivative financial instruments14,044 — 14,044 — 
Total liabilities14,044 — 14,044 — 


Page 18 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022

13.    FINANCIAL INSTRUMENTS BY CATEGORY AND FAIR VALUE MEASUREMENT (continued)

Fair value measurement as of December 31, 2022
(in $ thousands):
DescriptionTotalLevel 1Level 2Level 3 (*)
Financial assets at fair value through profit or loss / OCI
Cash and cash equivalents772,953 772,953 — — 
Other investments1,492,281 1,283,284 164,980 44,017 
Derivative financial instruments227 — 227 — 
Total assets2,265,461 2,056,237 165,207 44,017 
Financial liabilities at fair value through profit or loss / OCI
Derivative financial instruments505 — 505 — 
Total liabilities505 — 505 — 
(*) The fair value of financial instruments classified as level 3 is not obtained from observable market information, but from measurements of the asset portfolio at market value provided by the fund manager. The evolution of such instruments during the six-month period ended June 30, 2023, and the year ended December 31 2022, corresponds to the initial investment and to the changes in its fair value.


14.    FOREIGN EXCHANGE RESTRICTIONS IN ARGENTINA

Ternium’s Argentine subsidiary, Ternium Argentina S.A., is currently operating in a complex and volatile economic environment. Beginning in September 2019, the Argentine government has imposed and continues to impose significant restrictions on foreign exchange transactions. Restrictions have tightened significantly over time.

Effective November 1, 2022, the Argentine Central Bank put in place a new regulation on import of services rendered by non-related parties, pursuant to which the Argentine Central Bank may clear or not the payment of import of services and, if cleared, may determine a payment term equal or different to that being requested. There are no rules on the conditions upon which the Argentine Central Bank may clear or determine alternative payment terms.

Also effective November 1, 2022, the Argentine government implemented a new system, known as the SIRA system, pursuant to which the Argentine government may clear or not the payment of imports and, if cleared, may determine a payment term equal or different to that being requested. There are no objective conditions upon which the Argentine government may clear the payment of imports or determine alternative payment terms under the SIRA system.

This context of volatility and uncertainty remains in place as of the issue date of these Consolidated Financial Statements. Although as of the date of these financial statements these measures did not have a significant effect on Ternium Argentina’s ability to purchase U.S. dollars at the prevailing official exchange rate for most of its imports of goods and for the acquisition of services from unrelated parties, if such restrictions continue to be maintained, or are further tightened, Ternium Argentina could be restricted from making payment of imports for key steelmaking inputs (which would adversely affect its operations), or would need to resort to alternative, more expensive arrangements (which would adversely affect its results of operations). In addition, access to the Argentine foreign exchange market to distribute dividends or to pay royalties to related parties at the prevailing official exchange rate generally requires prior Argentine Central Bank approval, which is rarely, if ever, granted, thus limiting Ternium’s ability to collect dividends from Ternium Argentina at the prevailing official exchange rate.
Page 19 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022

14.    FOREIGN EXCHANGE RESTRICTIONS IN ARGENTINA (continued)

Ternium Argentina stated in its interim accounts as of June 30, 2023, and for the six-month period then ended, that revenues amounted to $1,727 million (six-month period ended June 30, 2022: $1,885 million), net profit from continuing operations to $523 million (six-month period ended June 30, 2022: $650 million), total assets to $5,208 million (December 31, 2022: $5,258 million), total liabilities to $512 million (December 31, 2022: $511 million) and shareholders’ equity to $4,696 million (December 31, 2022: $4,747 million). Ternium Argentina’s cash and cash equivalents and other investments amounted to $1,068 million as of June 30, 2023, broken down as follows:
–$945 million in U.S. dollars-denominated instruments, mainly sovereign bonds issued by the Argentine Government and payable in U.S. dollars, Argentine Treasury bonds related to the official exchange rate and negotiable obligations and promissory notes issued by Argentine export driven companies in U.S. dollars and payable in Argentine pesos.
–$63 million in Argentine pesos-denominated instruments with underlying assets linked to the U.S. dollar.
–$60 million in Argentine pesos-denominated instruments, mainly mutual funds.

Ternium Argentina’s financial position in ARS as of June 30, 2023, amounted to $168 million in monetary assets and $188 million in monetary liabilities. All of Ternium Argentina’s ARS-denominated assets and liabilities are valued at the prevailing official exchange rate.

On April 24, 2023, Ternium Argentina’s board of directors approved the payment of a dividend in kind in US dollar-denominated Argentine bonds for a total amount of up to $624 million. On May 4, 2023, Ternium received its share of the dividend in kind. Considering the impact of foreign exchange restrictions in Argentina and based on the value of the bonds in the international market, Ternium recorded in its equity a negative reserve of approximately $183 million as of the collection date. If and when Ternium disposes of these instruments, the reserve will be cancelled and Ternium will recogize the financial result arising fron the disposition of the bonds.

On July 23, 2023, a national Decree has extended the list of goods and services under the scope of a new tax in Argentina, which will affect imports of its main raw materials and international freight of Ternium Argentina at a rate of 7.5%.

15. THE RUSSIA-UKRAINE ARMED CONFLICT

On February 24, 2022, Russia launched a military attack on Ukraine. In response, the United States, the United Kingdom, and the European Union, among other countries, have imposed a wave of sanctions against certain Russian institutions, companies and citizens. As a result of the armed conflict and related sanctions, foreign trade transactions involving Russian and Ukrainian counterparties have been severely affected.

Russia has a significant participation in the international trade of steel slabs, iron ore pellets, metallurgical coal, pulverized coal for injection, which are relevant inputs for Ternium’s operations. In addition, Ukraine traditionally had a relevant participation in the international trade of steel slabs and iron ore pellets. As a result of the armed conflict and the economic sanctions imposed on Russia, Ternium or its contractors (including shipping companies) may not be able to continue purchasing or transporting products from, or making payments to, Ukrainian or Russian suppliers or counterparties; and the Company may be required to purchase raw materials from other sources at increased prices, resulting in limitations to Ternium’s production levels and higher costs, affecting the Company’s profitability and results of operations.

Page 20 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2023
and for the six-month periods ended June 30, 2023 and 2022


16. TERNIUM TO INTEGRATE OPERATIONS IN THE USMCA

On February 14, 2023, Ternium's Board of Directors approved the construction of a new upstream production capacity project to integrate its operations in the USMCA region. The increased slab production capacity will complement and support the company’s new state-of-the-art hot rolling mill, which began operations in mid-2021, as well as the previously announced downstream project in Mexico. Ternium expects to invest approximately $2.2 billion toward the construction of an electric arc furnace (EAF)-based steel shop with annual capacity of 2.6 million tons, as well as a direct reduced iron (DRI) module with annual capacity of 2.1 million tons. The slab production capacity program will also include the construction of a port facility for raw material handling.

On June 20, 2023, the Company announced that this new steel slab mill will be built at and integrated into the company’s existing downstream facility in Pesquería, Nuevo León, Mexico following an extensive review of location candidates. Construction is expected to begin in December 2023, with the start of operations anticipated to occur during the first half of 2026.

17. TERNIUM TO INCREASE ITS PARTICIPATION IN USIMINAS CONTROL GROUP - NEW GOVERNANCE STRUCTURE OF USIMINAS

On March 30, 2023, Ternium S.A. announced that its subsidiaries Ternium Investments and Ternium Argentina, together with Confab, a subsidiary of its affiliate Tenaris S.A., all of which compose the T/T group within Usiminas control group, entered into a share purchase agreement to acquire from Nippon Steel Corporation, Mitsubishi and MetalOne (the “NSC group”), pro rata to their current participations in the T/T group, 68.7 million ordinary shares of Usinas Siderúrgicas de Minas Gerais S.A. – USIMINAS (“Usiminas”) at a price of BRL10 per ordinary share. On July 3, 2023, the Company announced the completion of the acquisition of this additional participation. Pursuant to the transaction, Ternium paid $118.7 million in cash for 57.7 million ordinary shares, increasing its participation in the Usiminas control group to 51.5%.

The Usiminas control group holds the majority of Usiminas’ voting rights. Following the completion of the transaction, the T/T group holds an aggregate participation of 61.3% in the control group, with the NSC group and Previdência Usiminas (Usiminas employees’ pension fund) holding 31.7% and 7.0%, respectively. The Usiminas control group members also agreed a new governance structure, as a result of which the T/T group nominated a majority of the Usiminas board of directors, the CEO and four other members of Usiminas board of officers, and ordinary decisions are approved with a 55% majority of the control group shares. Pursuant to the Usiminas shareholders agreement, as supplemented by the T/T Group shareholders’ agreement, Ternium will fully consolidate Usiminas balance sheet and results of operations in its consolidated financial statements beginning in July 2023.

At any time after the second anniversary of the closing of the transaction, the T/T group will have the right to buy the NSC group’s remaining interest in the Usiminas control group (153.1 million ordinary shares) at the higher of BRL10 per share and the 40-trading day average price per share immediately prior to the date of exercising the option. In addition, the NSC group will have the right, at any time after the closing of the transaction, to withdraw its remaining shares from the control group and sell them in the open market after giving the T/T group the opportunity to buy them at the 40-trading day average price per share immediately prior to the NSC group’s notice of withdrawal, as well as the right, at any time after the second anniversary of the closing, to sell such shares to the T/T group at BRL10 per share.


Pablo Brizzio
Chief Financial Officer
Page 21 of
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