Earnings call transcript: Ternium SA ADR sees Q2 2025 EBITDA rise 25%

Ternium SA ADR (TX) reported a strong second quarter for 2025, with a 25% increase in adjusted EBITDA driven by higher steel prices in Mexico. Net income reached $259 million, with an adjusted figure of $299 million. With a market capitalization of $7.15 billion and a P/E ratio of 10.77, InvestingPro analysis suggests the stock is currently trading near its Fair Value. The company is focusing on expanding its capacity in Mexico and improving cost efficiencies. The stock saw a slight decrease of 0.33% to $36.35 in aftermarket trading, though it remains near its 52-week high of $37.43.

Key Takeaways

• Adjusted EBITDA increased by 25%, driven by stronger steel prices in Mexico.
• Net income for Q2 2025 was $259 million, with an adjusted figure of $299 million.
• Ternium is expanding its capacity in Mexico with a new galvanized line and cold rolling mill.
• The company is targeting a $300 million cost reduction for 2025.
• Stock price decreased by 0.33% in aftermarket trading.

Company Performance

Ternium’s performance in Q2 2025 was bolstered by favorable market conditions in Mexico, particularly in the steel sector. The company reported a significant 25% increase in adjusted EBITDA, highlighting its ability to capitalize on stronger pricing. This growth was supported by a robust cash flow from operations and a stable cash position of $1 billion at the end of June. The company maintains strong financial health with a current ratio of 2.68, indicating solid liquidity. Additionally, shareholders benefit from a substantial 9.92% dividend yield, making it one of the highest-yielding stocks in its sector.

Financial Highlights

• Revenue: Not specified
• Net income: $259 million
• Adjusted net income: $299 million
• Cash flow from operations: $1 billion
• Cash position at end of June: $1 billion

Outlook & Guidance

Ternium is optimistic about its future, with plans to expand its production capacity in Mexico. The new galvanized line and cold rolling mill are expected to partially ramp up in late 2025 and fully by 2027. The company is also targeting an EBITDA margin of around 15% by Q4 2025. Capital expenditures are projected to be between $2.5 billion and $2.6 billion for 2025, with a decrease in subsequent years.

Executive Commentary

Máximo Vedoya, CEO, emphasized the company’s strategic focus on market share gains in Mexico and the importance of trade defense measures. He noted, "We are seeing the U.S. adopt a more assertive approach in negotiating bilateral agreements." CFO Pablo Brizzio added, "Our expectation is to reach by the fourth quarter an EBITDA margin closer to around 15%."

Risks and Challenges

• Unfair steel imports in Brazil pose a significant challenge.
• The construction and home appliances sectors are struggling.
• Macroeconomic recovery in Argentina remains gradual.
• The company faces the challenge of implementing cost efficiency measures.

Q&A

Analysts inquired about Ternium’s trade measures in Mexico and the company’s cost reduction strategies. The management provided clarity on the CAPEX investment cycle and addressed the competitive challenges in the Brazilian market.

Full transcript - Ternium SA ADR (TX) Q2 2025:

Conference Call Moderator, Ternium: Hello, and welcome to Ternium second quarter 2025 results conference call. Please note that this call is being recorded. I would now like to hand the call over to Sebastián Martí. Please go ahead, sir.

Sebastián Martí, Global IR and Compliance Senior Director, Ternium: Good morning, and thank you for joining us. My name is Sebastián Martí, and I am Ternium’s Global IR and Compliance Senior Director. Yesterday, we announced our financial results for the second quarter and the first half of 2025. This call is meant to provide additional context to that presentation. I’m joined today by Máximo Vedoya, Ternium’s Chief Executive Officer, and Pablo Brizzio, the company’s Chief Financial Officer, who will discuss Ternium’s business environment and performance. After our prepared remarks, we will open up the floor to your questions. Before we begin, I would like to remind you that this conference call contains forward-looking information and that actual results may vary from those expressed or implied. Factors that could affect results are contained in our filings with the Securities and Exchange Commission and on page two in today’s webcast presentation.

You will also find any reference to non-IFRS financial measures reconciled to the most directly comparable IFRS measures in the press release issued yesterday. With that, I’ll turn the call over to Mr. Vedoya.

Conference Call Moderator, Ternium: Good morning, and welcome to Ternium’s conference call. In the second quarter of the year, we delivered an improved EBITDA relative to the first quarter. This better performance was mainly driven by higher realized prices in Mexico and a relatively stable cost per ton, despite a slight dip in shipments. The operating environment remains uncertain and volatile, and our main markets are no strangers to these developments. In this context, our focus is on reducing costs to strengthen the competitiveness of our company. We are positive on the outcome of these initiatives and on the future of Ternium. In line with this, we are already anticipating a sequential improvement in EBITDA. In the third quarter, we expect a slight increase in shipments, led primarily by Mexico, with the possibility of some additional support from Argentina and relatively stable volumes in Brazil.

In Mexico, the business environment is currently marked by caution, pending clearer information regarding U.S. trade policy and the conclusion of ongoing tariff negotiations with the United States. In response to this volatile environment, the Mexican government has taken some measures to increase domestic production defense against unfair trade practices, especially from Asian countries. These actions have recently contributed to some decrease in steel imports in Mexico, creating a more level playing field in local markets. This supports our expectations of higher sequential shipments in Mexico in the third quarter. I remain confident that ongoing negotiations between the U.S. and Mexico will eventually yield a reasonable and mutually beneficial agreement. This conviction strengthens our commitment to the steady progress of our expansion project in Pesqueria, which continues as planned and serves as a cornerstone of our growth strategy.

Unlike the recent developments in Mexico, the Brazilian steel market is facing significant challenges due to a surge of unfair imported steel. Imports continue to flow to this market, undermining the competitiveness of local manufacturers and eroding their margins. It is crucial, in our view, that the Brazilian government responds decisively to this unfair trade practice. The impact expands well beyond the steel industry, affecting the wider manufacturing sector and putting at risk investments, jobs, and the long-term stability of these industries. Concrete measures are urgently needed to defend Brazil’s industrial base, ensure a level playing field, and foster a sustainable market environment. In this challenging context, Usiminas is actively working on its cost structure in order to improve its competitiveness. Moving to Argentina, the country has experienced a significant increase in shipments during the second quarter, driven by seasonal factors as well as a gradually recovering macroeconomic environment.

The automotive industry continues to operate at a healthy level of activities, and the agricultural machine sector is experiencing good demand. By contrast, the construction sector is not improving significantly, and certain market segments such as home appliances and packaging are being affected by an increase in imports of finishing goods. In the face of ongoing uncertainty and volatility in global trade, we continue to focus on strengthening the operation efficiency and improving margins. Throughout 2025, we have concentrated our strategy approach to cost management, seeking opportunities to optimize Ternium’s production process and supply chain and eliminate inefficiencies. Our competitive improvement plan centers on optimizing our logistic network to streamline transportation and reduce costs, improving our procurement through better supplier negotiation and cost control, enhancing production facility process for a greater efficiency, and boosting labor productivity by incorporating technology and innovation across our three production lines.

These measures support our goal of strengthening profitability and fortifying our competitive position in a dynamic market environment. Before I wrap up my remarks, I would like to take a moment to highlight the release of our sustainability report, reaffirming our commitment to the creation of a long-term value throughout sustainable industrial development. The report details our efforts to advance environmental performance, foster social responsibility, and promote transparency across our operations. I encourage you to review it for a comprehensive overview of Ternium’s strategies supporting long-term sustainability. In conclusion, trade policy continues to evolve rapidly. We are seeing the U.S. adopt a more assertive approach in negotiating bilateral agreements and implementing targeted trade action.

While this shift has introduced a high degree of volatility, we recognize the U.S. The government’s intention to address predatory trade practices by many Asian countries, most notably China, and to work towards restoring fair competition across the region. Mexico shares this perspective and is following a similar path. Even in this uncertain environment, Ternium’s strong position in the region helps us face this challenge. I expect that our ongoing project and focus on improving operations will enable Ternium to adjust to market changes and reach our goals. All right, this concludes my prepared remarks. Pablo, please go ahead with your comments about our performance last quarter.

Pablo Brizzio, Chief Financial Officer, Ternium: Thanks, Máximo, and thanks, everybody, for being here today with us in this call. Let’s start looking at the webcast presentation for a closer look at the operational and financial performance of the company. Beginning on page three, we note that Ternium’s adjusted EBITDA increased by 25% in the second quarter, mainly driven by stronger realized steel prices in Mexico, partially offset by a slight increase in cost per ton. We expect this positive trend to continue into the third quarter, mainly supported by ongoing cost efficiency measures and operational improvements. Turning to the next page, net income for the second quarter of 2025 amounted to $259 million. These figures include a $40 million provision adjustment related to the ongoing litigation associated with the acquisition of a participation in Usiminas back in 2012. The adjustment reflects both excess interest and the appreciation of the Brazilian real against the U.S.

dollar during the quarter. Adjusted net income excluding this provision amounted to $299 million. This was mainly supported by a better operational performance and favorable deferred tax result due to a 7.5% revaluation of the Mexican peso during the period. On the other hand, we have a decline in net financial result, primarily driven by the same Mexican foreign exchange fluctuation. Now turning to page five, let’s review the performance of our steel segment. During the quarter, shipments declined primarily in Mexico and the U.S. This was partially mitigated by higher volumes in our southern region. For the third quarter, we anticipate a mixed performance across our key markets. In Mexico, we expect some sequential growth in shipments, supported by recent government measures aiming at curbing unfair trade practices. In contrast, Usiminas in Brazil continues to face headwinds.

The Brazilian market remains under pressure due to a sharp increase in unfair trade steel imports, primarily from China, which is undermining local competitiveness and impacting demand. Meanwhile, in Argentina, following a strong increase in the second quarter, driven by seasonal demand and gradual macroeconomic improvement, we are expecting somewhat shipments to hold steady on the positive side. Let’s now turn to page six of the presentation. In the second quarter, there was an increase in average selling price, especially in Mexico, although this was offset by lower shipments. Margins improved, supported by the higher price with the most impact from increased cost per ton. Turning to slide seven, we will now review the performance of our mining segment. Iron ore shipments rose quarter over quarter, driven by increased production levels.

Despite these high volumes, net sales remain broadly unchanged in the second quarter, as lower realized iron ore prices offset volume gains. The segment margin slightly declined, reflecting the impact of weaker prices, although this was partially offset by lower operating costs per ton. Let’s proceed to the finance slide of the presentation to review our cash flow performance and balance sheet position. Cash flow operations in the second quarter totaled $1 billion, aided by a significant reduction in working capital. This reflects our work on adjusting inventory volume, as well as a decrease in fair receivables. In addition, a high level of CAPEX contributed to an increase in commercial debt. CAPEX increased this quarter as a result of ongoing expansion at the Pesqueria Industrial Center in Mexico. This trend is consistent with the project expenditure forecast, which identified 2025 as the peak year for investments.

Finally, Ternium’s net cash position decreased in the second quarter, primarily as a result of the elevated CAPEX level and the distribution of the $353 million dividend during the period. This was partially offset by the raised operation cash flow generation, and nevertheless, the cash position of the company continues to be very, very strong, totaling $1 billion at the end of June. Okay, this also concludes my prepared remarks. We are ready now to take your questions. Please, operator, go ahead with the Q&A session. Thanks.

Conference Call Moderator, Ternium: If you’d like to ask a question, please press star and the number one on your telephone keypad. Additionally, if you’d like to withdraw your question, please press star one again. Our first question comes from the line of Caio Greiner from UBS Investment Bank. Please go ahead.

Caio Greiner, Analyst, UBS Investment Bank: Hello. Good morning, everyone. Thank you. My first question is on the state of steel supply in Mexico. Can you guys elaborate a bit better on the supply picture in the country, touching on two points? The first one, as you mentioned, is Mexico’s recent implementation of trade measures, which eventually led to lower imports. The second one, ArcelorMittal reported an incident over these last few days at the steelworks, which is supposed to impact 30% of their production. Touching on those two points, do you think that these are enough to rebalance steel markets in Mexico? To what extent are they actually going to help the supply-demand picture, help to raise prices back to normalized levels? Is Ternium well-positioned to capture a higher market share from these two events? The second question is on the cost outlook that you provided.

You mentioned that you expected cost reduction to drive higher margins for the third quarter. Can you elaborate a bit more on those operational enhancement and cost reduction initiatives that you discussed? How much of the cost decline that you anticipate is coming from these bottom-up initiatives versus lower raw material costs? We’re seeing coal prices declining. We’re seeing slab prices declining. Maybe break that down, that would be really helpful. If you could also quantify the level of cost reduction that we should expect into the third quarter. Thank you very much.

Conference Call Moderator, Ternium: Okay. Thank you, Guido. Let’s start with the first one, Mexico. As you know, Mexico, let me split it in two. One is the slab products. Slab products have an import around 40% of market share in Mexico is from imported steel. As you know, apartment consumption in Mexico decreased a little bit this year. In the third part, with all the investment we have been doing and the increasing productivity, today we have capacity to start gaining market share, and it’s what we are doing. I think we are going to improve this in the following quarters. That’s because of the lower imports and the effort, for one side, the government is doing in this, fighting unfair trade, and on the other side, our own job in trying to be a good alternative for all these customers.

I think from the flat side products, you are going to see an increase in market share. You are not going to see a huge increase in shipments because, as I said, compared to last year, the consumption in Mexico, because all the things we discussed, is a little bit low. Regarding ArcelorMittal, we just found out yesterday or Monday about the problem in ArcelorMittal. I don’t know exactly what the problem is yet, but that is in the long products. Yes, we are probably going to gain a little bit of share while this problem arouses in the long product market. As you know, long products, there are not a lot of imports in long products, and there are several players in the long product market in Mexico. That gain is going to be only marginal, I guess.

The gain is going to be in the flat products, which is our main market. That’s for the first question. The second question, cost reduction. Additionally to the decrease in, as you said, in iron ore, in slabs, we anticipate, I think, in our analysts’ day in June, that we are seeking an additional $300 million increase in cost efficiency during the whole year. Part of that, we already have realized in the first quarter, almost a third of that, and the two-thirds of that volume is going to be realized in these next two quarters. This is several initiatives from our procurement front, but expecting renegotiations and new suppliers and enhanced controllers for almost $70 million, improving through different initiatives. The stability in several of our processes is also $50 million. A change in the supplier of metallic in the EIFs, rebalancing.

As you said, in Mexico, we are rebalancing the production, and we are shutting some of the lines and improving productivity in others with a decrease in cost. There are also the wind farm in Argentina, which, of course, is giving energy at a much lower cost than we used to. All these, in total, are the $300 million we set besides the decrease in raw materials that you mentioned. I hope with this, Guido, it is clear the numbers.

Caio Greiner, Analyst, UBS Investment Bank: Yes, Máximo, thank you very much. Maybe if I can, just a quick follow-up on the import, on the trade, import measures that Mexico took. I just wanted to understand if you think these are sufficient to balance local steel markets in Mexico. Thank you.

Conference Call Moderator, Ternium: Thank you, Guido. Very good question. I think it’s a good start, a very good start. Clearly, Mexico is analyzing more measures. I think in the sense as the U.S. is doing and Canada also doing. At the end, I’m expecting that the whole North American market will have a defense mechanism similar in each country. If you compare Mexico’s measures to the U.S. measures, I think there’s still a gap. I understand that the Mexican government is analyzing to reduce that gap.

Caio Greiner, Analyst, UBS Investment Bank: Thank you very much, Máximo. Really helpful.

Conference Call Moderator, Ternium: You’re welcome, Guido.

Speaker 6: Thank you. Our next question comes from the line of Carlos De Alba from Morgan Stanley. The line’s open.

Carlos De Alba, Analyst, Morgan Stanley: Yes. Hello. Good morning, gentlemen. Just a couple of questions, if I may. First, on EBITDA, one short-term and one long-term. Can you maybe give us a better sense of the magnitude of the potential improvement sequentially, given that you already seem to have bottomed out and started improvement? The step up in that recovery that you see ahead will be important. A little bit more longer-term, can you maybe quantify, give us a range of the expected boost in EBITDA in millions of dollars that you see coming from the ongoing and recent investments in Mexico?

Pablo Brizzio, Chief Financial Officer, Ternium: Okay, Carlos, let me take at least the first part of your question. Clearly, as we have described in recent calls, we have borrowed out from the lowest levels of EBITDA generation. There was an important increase during this quarter. Our expectation is for this to continue. There are a lot of variables, of course, moving around, but the expectation is something that we already mentioned in the past, to reach by the fourth quarter an amount of an average EBITDA margin closer to around 15%. As you know, it has been our goal for the company in the short run. We believe that with all the measures that Máximo described on our plans to reduce costs and be more efficient, we will be able to achieve that in a normal market environment. We are working for that.

The third quarter should be the case, and the following should be an additional increase in order to achieve these levels. In the longer-term view, I think, Máximo, you can take it.

Conference Call Moderator, Ternium: Yeah, Carlos, hello. How are you? Longer-term view of the project. Remember, the project, at the end of this year, we are going to start the galvanized line and the new cold rolling mill, the PLTCM2. This is going to increase, or it’s going to give $1.5 million tons a year of new capacity. Remember that all this equipment has a very long ramp-up period. You’re not going to see in 2026 a huge increase. It’s $1.5 million of that, probably half a million tons. We are going to close very old capacity. Remember the Guerrero cold rolling mills or the Universidad cold rolling mills are very old capacity with one single stand, so very, very inefficient. Part of that is going to have an increased margin or EBITDA of $30, $40 because of the cost efficiency.

The other part, probably we have an EBITDA per ton of around $150 to $200 a ton. You can make the math. Again, they have a long ramp-up period.

Pablo Brizzio, Chief Financial Officer, Ternium: Yeah, I understand. Let me add, Máximo, this is just the part that we are.

Conference Call Moderator, Ternium: Yeah, you’re right.

Pablo Brizzio, Chief Financial Officer, Ternium: By the EIF, we have the second part of the expansion plan.

Conference Call Moderator, Ternium: Oh, the.

Pablo Brizzio, Chief Financial Officer, Ternium: That will be 2027.

Conference Call Moderator, Ternium: 2027, exactly.

Speaker 6: All right. Got it. In 2027, it will be the EIF.

Conference Call Moderator, Ternium: Yeah.

Speaker 6: Just the full ramp-up.

Conference Call Moderator, Ternium: A long ramp-up period, even longer.

Speaker 6: Okay. All right. That’s helpful. Thank you. The two short ones, hopefully one is not that short, but we’ll see. On the CSN litigation or the Usiminas alleged shareholder control changing in control, where do we stand and what will be the next steps in that litigation? One small one, the shipper facility in the U.S., you typically import material from, I think, Mexico into that plant for the processing with a 50% tariff. What is the strategy there?

Conference Call Moderator, Ternium: Yeah. Let me start with the second one, which is very simple. I mean, today, we are buying most of our supply from local suppliers. Clearly, the 50% tariff makes us buy more locally. Brazil and CSN, I mean, regarding the litigation with CSN, to be honest, there haven’t been significant developments later. The last development we reported in the fourth quarter of last year. There haven’t been. In that quarter, I think was that we changed, we adjusted the provision we had because of that development. Since then, there hasn’t been much update to that.

Speaker 6: What are the next steps in the legal process for eventually getting a final resolution on this?

Conference Call Moderator, Ternium: To be honest, no, we already appealed, and the Supreme Court of Justice has to decide if our appeal is going to the Supreme Federal Tribunal, the STF, as you call it in Brazil. This is still pending.

Speaker 6: All right. Got it. Thank you. Thank you very much.

Conference Call Moderator, Ternium: To be clear, I mean, we filed an extraordinary plea against the STJ decision, and we are waiting for that appeal. That was, I think, in February.

Speaker 6: Okay. Excellent. Thank you very much, Máximo and Pablo.

Conference Call Moderator, Ternium: You’re welcome.

Speaker 6: Thank you.

Conference Call Moderator, Ternium: Our next question comes from the line of Emerson Viera from GF. The line’s open.

Good morning and thank you for the opportunity. I have two follow-ups. The first one is on the cost reduction target of $300 million. I just want to understand if that’s compared to 2024’s figures or to a run rate figure from the fourth quarter 2024. I just want to understand what is the comparison base for this cost reduction and if that includes Usiminas. A second question is on the impact that these lower imports into Mexico are having on steel prices. Do you guys believe that this should support further increases going into the third quarter? Thank you.

Thank you, Emerson. The first question, these $300 million are compared to 2024 without the effect of the change of raw material prices, of course. To see it in the ship balance, it’s a little bit difficult, but we are continuously following that and making these improvements compared to 2024. Usiminas is not included in this number. We are making Usiminas a very aggressive competitive plant, but it’s not included in this number. The second part of prices in Mexico, prices in Mexico will probably increase a little bit. As I said, we are probably going to gain market share, but the change in prices, they are not going to improve radically. It’s going to be a mild improvement.

Okay. Just a follow-up on the Mexican measures as well. Can you elaborate a little bit on it? I mean, are we talking about quota systems, incident pin? If you can provide us some insights into the next measures that the government is analyzing, as you mentioned, that would be helpful. Thank you.

They are revising all the federal abuses that were in the system, in the imports in Mexico, not only from steel. The tax authority and the Secretary of Economy are doing different schemes to shut down all the loops that were for dumping cases and the tariffs that Mexico today is. For example, all temporary imports. They are revising because a lot of that was clearly a loophole that people were using, so they are closing all those loopholes. Also, we are seeing much more analyzing in new dumping cases. They are enhancing the capability of analyzing all different dumping cases, and I hope soon we will have good news about that.

Thank you very much.

Thank you, Emerson.

Speaker 6: Thank you.

Conference Call Moderator, Ternium: Again, if you’d like to ask a question, please press star and the number one on your telephone keypad. Our next question comes from the line of Rafael Barcellos from Banco Bradesco BBI S.A. The line’s open.

Rafael Barcellos, Analyst, Banco Bradesco BBI S.A.: Hey, good morning. Thanks for taking my questions. I have two questions related to capital allocation. The first one, if you could please elaborate further on your CAPEX cycle. I mean, whether we should see the peak of the CAPEX level closer to the end of this year or more to the beginning of next year. If you could give us a sense of when you’re planning to post the peak of this CAPEX level. On this point, also, if you could provide more color on the execution of the Pesqueria project, it could be interesting as well. The second question, it’s a broader question in the sense of I wanted to hear from you, what are your thoughts on the overall capital allocation strategy going forward. I mean, whether you believe you could increase dividends in the coming years.

Given the ongoing difficulties in Brazil following the recent increase in imports, how is your appetite to keep investing in the country? Thank you.

Conference Call Moderator, Ternium: Thank you, Rafael. CAPEX, probably this quarter, the $800 million of CAPEX of this quarter will probably be, or definitely will be the top quarter of this cycle. I mean, for the remaining of the year, our projection is to be between the $2.5 and the $2.6 billion of CAPEX that we set last conference call. With that, the next two quarters are going to be very high on the order of $700 million, but lower than this quarter. Next year, 2025 will probably be around $1.9 billion, and 2027 will probably be around $1.1, $1.2 billion. As you see, this year is the peak, and this quarter particularly will be probably the peak of all this CAPEX investment. The execution in Pesqueria, to be honest, is doing very good. As I said, the PLTCM or the galvanized are going to start the ramp-up in December.

That was the original date for the galvanized, and we are moving forward two months, the one in the PLTCM. I’m very comfortable with that. The steel shop and the direct reduction unit, they’re going well. If you like, there are some videos in our web pages or in the media which you realize how the investment is going through, the size of the investment, and the challenge. As you would see from the videos, it’s going very, very well and on time. With that, we are very comfortable today. Of course, looking, I mean, making a lot of effort to deliver that in time and in budget. The third one, Brazil, you are very correct. Brazil has to, I mean, as a country, they have to take some measures because if not, clearly, not only steel industry, but a lot of industries cannot compete with unfair from China.

Not the steel, not the automotive, anybody. I know the automotive industry in Brazil just released a very tough memo about all this. This is something that probably Brazil has to figure out before investments are going there. The long-term dividends, Pablo?

Pablo Brizzio, Chief Financial Officer, Ternium: Yeah. The question, of course, was including dividends and also the capital allocation of the company. As you know, we are in the middle of a very, very significant CAPEX plan for Ternium, $4 billion. We are in the middle of that. As Máximo mentioned, this year, the total CAPEX is $2.5 billion. Next year, close to $2 billion. We are in the middle of significant capital allocation that we need to cover. With this level of CAPEX, we also mentioned that we also confirmed that we will sustain our level of dividend payment, and we have been doing that lately. We have a significant outflow of capital to be allocated within the project and within the dividend that we are planning to have.

Of course, as usually happens with our big CAPEX plan, we take a year or a little more to digest all the investment that we have been doing. As Máximo mentioned before, the ramp-up period of these CAPEX plans are significant, especially these ones that are very, very sophisticated. We think that we have a very, very clear view of what we will be doing in the near future. We have, as you know, other plans if they are feasible for the future. The main focus of the company, at least for the next couple of years, is to, of course, get a better level of EBITDA, a better level of margins for the company to sustain our dividend payment and to sustain all the CAPEX plans that we are performing right now.

Rafael Barcellos, Analyst, Banco Bradesco BBI S.A.: Okay. Thank you. Just a quick follow-up. Just to confirm, you mentioned that the peak of the CAPEX was the second quarter, right? In the coming quarters, your CAPEX levels should go down slightly, right?

Conference Call Moderator, Ternium: Exactly. We are putting the number at $1.54 billion for the next semester, around $700 million each quarter, a little bit more or less. That is a number, approximately, compared to the $800 million of this quarter.

Rafael Barcellos, Analyst, Banco Bradesco BBI S.A.: Okay, thank you.

Conference Call Moderator, Ternium: You’re welcome.

Speaker 6: Thank you.

Conference Call Moderator, Ternium: There are no further questions. I’ll now turn the call back over to our CEO for closing remarks. Okay. Thank you very much all for joining us in today’s call. As usual, we value very much your feedback. Please call us with any doubt and have a great day. Thank you very much. The meeting is now concluded. Thank you all for joining. You may now disconnect.

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