SOURCE: Ternium S.A.

Ternium S.A.

February 24, 2009 07:30 ET

Ternium Announces Full Year and Fourth Quarter 2008 Results

LUXEMBOURG--(Marketwire - February 24, 2009) - Ternium S.A. (NYSE: TX) today announced its results for the full year and fourth quarter ended December 31, 2008.

The financial and operational information contained in this press release is based on consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and presented in U.S. dollars and metric tons.

Summary of Full Year 2008 Results(1)


                                                12M 2008   12M 2007

Shipments (tons)                               7,543,000  6,980,000      8%
Net Sales (US$ million)                          8,464.9    5,633.4     50%
Operating Income (US$ million)                   1,676.0      836.8    100%
EBITDA (US$ million)                             2,089.6    1,192.1     75%
EBITDA Margin (% of net sales)                        25%        21%
EBITDA per Ton, Flat & Long Steel (US$/ton)          263        163     61%
Net Foreign Exchange Result (US$ million)         (632.7)     (18.4)
Discontinued Operations Result (US$ million)       157.1      579.9
Net Income (US$ million)                           875.2      995.8    -12%
Equity Holders' Net Income (US$ million)           715.4      784.5     -9%
Earnings per ADS (US$)                              3.57       3.91     -9%

Ternium's operating income was US$1.7 billion in 2008, an increase of 100% when compared to operating income in 2007. This resulted mainly from the consolidation of Grupo Imsa and an increase in margins during the first nine months of 2008, partially offset by a US$200.0 million write-down of Ternium's inventory during the second half of 2008.

Net income during 2008 was US$875.2 million, a decrease of 12% when compared to the year 2007. This decrease was mainly due to the US$632.7 million net foreign exchange loss and a decline of US$422.8 million in discontinued operations results, partially offset by an increase of US$839.3 million in operating income and a reduction of US$128.6 million in income tax expense. The net foreign exchange loss in 2008 was primarily due to the Mexican Peso's 25% devaluation on Ternium's Mexican subsidiary's US dollar denominated debt. This result is non-cash when measured in US dollars and is offset by changes in Ternium's net equity position in the currency translation adjustments line. Ternium does not have a significant position in foreign exchange derivatives and only uses these instruments for hedging purposes.

During 2008, Ternium's results from discontinued operations of US$157.1 million were comprised of after-tax gains of US$97.5 million related to the sale of non-core US assets and US$59.6 million related to Sidor. During 2007, results from discontinued operations totaled an after-tax gain of US$579.9 million and were mainly related to Sidor.

Summary of Fourth Quarter 2008 Results(2)

                             4Q 2008    3Q 2008             4Q 2007

Shipments (tons)           1,547,000  1,844,000    -16%   2,044,000    -24%
Net Sales (US$ million)      1,721.1    2,436.9    -29%     1,723.1      0%
Operating Income
 (US$ million)                 186.3      524.2    -64%       211.1    -12%
EBITDA (US$ million)           281.1      636.0    -56%       330.1    -15%
EBITDA Margin
 (% of net sales)                 16%        26%                 19%
EBITDA per Ton, Flat &
 Long Steel (US$/ton)            158        326    -52%         160     -1%
Net Foreign Exchange
 Result (US$ million)         (622.5)    (150.1)               25.6
Discontinued Operations
 Result (US$ million)              -       (2.8)              117.7
Net Income (Loss)
 (US$ million)                (348.5)     247.3               221.4
Equity Holders' Net Income
 (Loss) (US$ million)         (334.0)     211.7               165.6
Earnings (Loss) per
 ADS (US$)                     (1.67)      1.06                0.83

--  Ebitda of US$281.1 million in the fourth quarter 2008, as shipments
    and revenue per ton decreased 16% and 17%, respectively, compared to the
    third quarter 2008.
--  Loss per ADS of US$1.67 in the fourth quarter 2008, mainly related to
    the above mentioned non-cash foreign exchange loss on Ternium's Mexican
    subsidiary's US dollar denominated debt.
--  Positive free cash flow(3) of US$403.6 million in the fourth quarter
    2008.
--  Net financial debt(4) of US$2.1 billion at the close of the fourth
    quarter 2008, a decrease of US$392.8 million compared to the close of the
    third quarter 2008.
    

During the fourth quarter 2008, Ternium's shipments decreased 16% compared to the third quarter 2008 as a result of a sharp decline in steel demand from the main steel consuming sectors -- construction, home appliances and automotive -- in its core markets. Operating income was US$186.3 million, a decrease of 64% when compared to the third quarter 2008. Net sales decreased 29% during the fourth quarter 2008, as shipments and revenue per ton decreased 16% and 17%, respectively, while operating cost per ton decreased 4%. Operating income in the fourth quarter 2008 included a US$68.3 million loss related to the write-down of Ternium's inventory referenced above, compared to a US$131.7 million inventory related write-down in the third quarter 2008. Operating income in the fourth quarter 2008 decreased 12% when compared to the fourth quarter 2007, mainly as a result of a 24% decrease in shipments and a 33% increase in operating cost per ton during the fourth quarter 2008, partially offset by a 28% increase in revenue per ton. There was no write-down of inventories recorded in the fourth quarter 2007.

Net loss during the fourth quarter 2008 was US$348.5 million, compared to net income of US$247.3 million in the third quarter 2008. The fourth quarter 2008 net result was lower than that of the precedent quarter, mainly due to an increase of US$472.4 million in net foreign exchange loss and a US$337.9 million reduction in operating income, partially offset by a US$236.4 million reduction in income tax expense. The fourth quarter 2008 net result was US$569.8 million lower than that of the fourth quarter 2007, mainly due to a decline of US$643.3 million in net foreign exchange result and US$117.7 million less in discontinued operations results, partially offset by a reduction of US$216.0 million in income tax expense.

Net foreign exchange result during the fourth quarter 2008 was a loss of US$622.5 million, compared to a loss of US$150.1 million in the third quarter 2008 and a gain of US$25.6 million in the fourth quarter 2007. The net foreign exchange losses in the third and fourth quarters of 2008 were primarily due to the Mexican Peso's 5% and 25% devaluation, respectively, on Ternium's Mexican subsidiary's US dollar denominated debt. These results are non-cash when measured in US dollars and are offset by changes in Ternium's net equity position in the currency translation adjustments line, as the value of Ternium Mexico's US dollar denominated debt is not altered by the Mexican Peso fluctuation when stated in US dollars in Ternium's consolidated financial statements.

Ternium's financial debt at the end of the fourth quarter 2008 was US$3.3 billion, of which US$941.5 million will mature during 2009, while the company's cash, cash equivalents and other investments totaled US$1.2 billion as of December 31, 2008. The company's net financial debt(5) of US$2.1 billion at the close of the fourth quarter 2008 decreased US$392.8 million compared to its net financial debt as of September 30, 2008.

Outlook

Steel product demand and prices in the North America Region are expected to remain at their current levels throughout the first quarter 2009 following the decline experienced during the second half of 2008 as a result of the significant slowdown in the world economy. Demand and prices in the South & Central America Region are expected to decrease in the first quarter 2009 due to a delayed effect on the region's economies of the global markets disruption.

Ternium expects a lower EBITDA(6) in the first quarter 2009 compared to EBITDA in the fourth quarter 2008, mainly as a result of lower overall volume and lower average prices in its regions.

The company anticipates a lower net debt position at the close of the first quarter 2009, mainly as a result of a decline in working capital and a re-assessment and re-scheduling of its capital expenditure projects. Inventory volumes are expected to continue declining due to a scaling down of production and a reduction of the volume of Ternium's semi-finished product and raw-material purchases.

Ternium expects that its average capacity utilization during the first half of 2009 would be approximately 65%. Capital expenditures for 2009 are expected to total approximately US$250 million, while capital expenditures during 2008 were US$587.9 million.

Analysis of Full Year 2008 Results

Net income attributable to the Company's equity holders for 2008 was US$715.4 million, compared with US$784.5 million for 2007. Including minority interest, net income for 2008 was US$875.2 million, compared with US$995.8 million for 2007. Earnings per ADS(7) were US$3.57 in 2008, compared with US$3.91 in 2007.

Net sales for 2008 increased 50% to US$8.5 billion, compared with 2007. Excluding the effect of the consolidation of Grupo Imsa, net sales increased due to higher revenue per ton. Shipments of flat and long products were 7.5 million tons during 2008, an increase of 8% compared to shipment levels in 2007, mainly due to the consolidation of Grupo Imsa and higher shipment levels in the South & Central America Region. Revenue per ton shipped was US$1,087 in 2008, an increase of 38% when compared to 2007, mainly as a result of higher prices and the consolidation of Grupo Imsa's higher value added product mix.

                  Net Sales               Shipments         Revenue / ton
                (million US$)          (thousand tons)        (US$/ton)

             FY       FY             FY       FY            FY    FY
            2008     2007    Dif.   2008     2007    Dif.  2008  2007  Dif.
 South &
  Central
  America  2,782.5  2,037.0   37%  2,604.2  2,499.1    4%  1,068  815   31%
 North
  America  4,294.7  2,571.8   67%  3,666.1  3,034.9   21%  1,171  847   38%
 Europe &
  other       47.5    123.0  -61%     55.2    184.9  -70%    860  665   29%
           -------  -------  ---   -------  -------  ---   -----  ---  ---
Total flat
 products  7,124.7  4,731.7   51%  6,325.5  5,718.9   11%  1,126  827   36%

 South &
  Central
  America    274.4     70.0  292%    302.5    132.8  128%    907  527   72%
 North
  America    791.8    696.0   14%    901.3  1,113.4  -19%    878  625   41%
 Europe &
  other        8.9      6.9   30%     13.3     15.0  -11%    669  457   46%
           -------  -------  ---   -------  -------  ---   -----  ---  ---
Total long
 products  1,075.1    772.8   39%  1,217.2  1,261.2   -3%    883  613   44%
Total flat
 and long
 products  8,199.8  5,504.5   49%  7,542.7  6,980.1    8%  1,087  789   38%

Other
 products
 (1)         265.1    128.8  106%
           -------  -------  ---
Total Net
 Sales     8,464.9  5,633.4   50%


(1) Primarily includes iron ore, pig iron and pre-engineered metal
buildings.

Sales of flat products during 2008 totaled US$7.1 billion, an increase of 51% compared to 2007. Excluding the effect of the consolidation of Grupo Imsa, net sales increased mainly as a result of higher revenue per ton. Shipments of flat products totaled 6.3 million tons in 2008, an increase of 11% compared with 2007, mainly due to the consolidation of Grupo Imsa and higher shipments in the South & Central America Region, partially offset by lower shipments in the "Europe and other" Region. Revenue per ton shipped increased 36% to US$1,126 in 2008 compared to 2007, mainly as a result of higher steel prices and the consolidation of Grupo Imsa's higher value added product mix.

Sales of long products were US$1.1 billion during 2008, an increase of 39% compared to 2007 mainly due to higher prices. Shipments of long products totaled 1.2 million tons in 2008, representing a 3% decrease versus 2007 as lower shipments in the North America Region were offset by higher shipments in the South & Central America Region. Revenue per ton shipped was US$883 in 2008, an increase of 44% compared to 2007.

Sales of other products totaled US$265.1 million during 2008 compared to US$128.8 million during 2007. The increase was driven by higher iron ore shipments and prices, as well as by higher pre-engineered metal building sales coming from the Grupo Imsa acquisition.

Sales of flat and long products in the North America Region totaled US$5.1 billion in 2008, an increase of 56% versus 2007, mainly due to the effect of the consolidation of Grupo Imsa and higher prices. Shipments in the region totaled 4.6 million tons during 2008, or 10% higher than during 2007. Revenue per ton shipped was US$1,114 in 2008, an increase of 41% compared to 2007, as a result of higher steel prices and the consolidation of Grupo Imsa's higher value added product mix.

Flat and long product sales in the South & Central America Region were US$3.1 billion during 2008, an increase of 45% versus 2007. This increase was due to higher volumes and revenue per ton. Shipments in the region totaled 2.9 million tons during 2008, or 10% higher than in 2007. Revenue per ton shipped in the South & Central America Region was US$1,052 in 2008, an increase of 31% compared to 2007, mainly due to higher prices.

Cost of sales was US$6.1 billion in 2008 compared to US$4.3 billion in 2007. Cost of sales increased as a result, in part, of the consolidation of Grupo Imsa, which increased Ternium's production volume and cost per ton due to Grupo Imsa's higher production cost structure and higher value added product sales mix. The year-over-year cost of sales increase also was related to higher costs for third party steel, raw materials, energy, freight, labor and services and the US$200.0 million write-down of Ternium's inventory that was primarily related to purchased slabs, partially offset by a reduction in the US dollar value of inventories at the beginning of the year and purchased during the period, mainly as a result of the Mexican Peso's 25% devaluation to the US dollar.

The consolidation of Grupo Imsa, which began on July 26, 2007, resulted in an increased volume of purchased slabs with a cost per ton significantly higher than Ternium's average cost of slab production. Scrap and energy prices increased in Mexico while the price of zinc was lower in 2008 compared to the prior year. Iron ore and coal costs were higher during 2008 than they were in 2007, mainly as a result of higher annual contract prices of third party iron ore supplies and higher production costs at Ternium's iron ore mines.

Selling, general and administrative (SG&A) expenses in 2008 were US$669.5 million, or 8% of net sales, compared with US$517.4 million, or 9% of net sales, in 2007. The increase in SG&A was due mainly to the consolidation of Grupo Imsa.

Operating income in 2008 was US$1.7 billion, or 20% of net sales, compared with US$836.8 million, or 15% of net sales, in 2007.

EBITDA(8) in 2008 was US$2.1 billion, or 25% of net sales, compared to US$1.2 billion, or 21% of net sales, in 2007. Equity holders' EBITDA in 2008 was 79% of EBITDA.

Net financial expenses were US$797.1 million in 2008, compared with US$130.0 million in 2007. During 2008, Ternium's net interest expenses were US$103.9 million, an increase of US$12.4 million compared to 2007 due to higher indebtedness as a result of the Grupo Imsa acquisition in July 2007, partially compensated by lower interest rates.

Net foreign exchange result was a loss of US$632.7 million in 2008, compared to a loss of US$18.4 million in 2007. The result in 2008 was primarily due to the impact of the Mexican Peso's 25% devaluation on Ternium's Mexican subsidiary's US dollar denominated debt. This result is non-cash when measured in US dollars and is offset by changes in Ternium's net equity position in the currency translation adjustments line, as the value of Ternium Mexico's US dollar denominated debt is not altered by the Mexican Peso fluctuation when stated in US dollars in Ternium's consolidated financial statements. In accordance with IFRS, Ternium Mexico prepares its financial statements in Mexican Pesos and registers foreign exchange results on its net non-Mexican Pesos positions when the Mexican Peso revaluates or devaluates to other currencies.

Fair value of derivatives result was a loss of US$32.5 million in 2008, compared to a gain of US$2.5 million in 2007, related to some derivative instruments entered into by Ternium mainly to mitigate the effect of interest rates and foreign exchange fluctuations.

Income tax expense in 2008 was US$259.0 million, or 29% of income before income tax, discontinued operations and minority interest, compared with US$291.3 million, or 41% of income before income tax, discontinued operations and minority interest, in 2007. The income tax expense in 2008 included a non-recurring gain of US$96.3 million on account of Hylsa's reversal of deferred statutory profit sharing that reduced the effective tax rate for the year.

Net result of discontinued operations in 2008 was a gain of US$157.1 million, comprised an after-tax gain of US$59.6 million related to Sidor and an after-tax gain of US$97.5 million from the sale of non-core US assets during the first quarter 2008. In 2007, net result of discontinued operations was a gain of US$579.9 million, mainly related to Sidor.

Income attributable to minority interest in 2008 was US$159.7 million, compared to US$211.3 million in 2007, mainly as a result of a lower income attributable to minority interest in Sidor.

Analysis of Fourth Quarter 2008 Results

Net loss attributable to the Company's equity holders in the fourth quarter 2008 was US$334.0 million, compared with net income attributable to the Company's equity holders of US$165.6 million in the fourth quarter 2007. Including minority interest, net loss for the fourth quarter 2008 was US$348.5 million, compared with net income of US$221.4 million in the fourth quarter 2007. Loss per ADS(9) for the fourth quarter 2008 was US$1.67, compared with earnings per ADS of US$0.83 in the fourth quarter 2007.

Net sales in the fourth quarter 2008 were US$1.7 billion, a similar result to the net sales total in the fourth quarter 2007. Lower shipments were offset by higher revenue per ton during the fourth quarter 2008. Shipments of flat and long products were 1.5 million tons during the fourth quarter 2008, a decrease of 24% compared to shipment levels in the fourth quarter 2007, mainly due to a decrease in demand in Ternium's main steel markets. Revenue per ton shipped was US$1,062 in the fourth quarter 2008, an increase of 28% compared to the same quarter in 2007, mainly as a result of higher steel prices.

                  Net Sales               Shipments         Revenue / ton
                (million US$)          (thousand tons)        (US$/ton)



             4Q        4Q             4Q       4Q           4Q    4Q
            2008      2007  Diff.    2008     2007  Diff.  2008  2007 Diff.
 South &
  Central
  America    642.4    607.9    6%    559.9    699.0  -20%  1,147  870   32%
 North
  America    735.7    876.3  -16%    642.2    993.6  -35%  1,146  882   30%
 Europe &
  other       30.0      7.9  281%     36.0     12.3  193%    834  641   30%
           -------  -------  ---   -------  -------  ---   -----  ---  ---
Total flat
 products  1,408.1  1,492.0   -6%  1,238.1  1,704.9  -27%  1,137  875   30%

 South &
  Central
  America     71.7     27.0  166%     91.9     55.2   67%    780  489   60%
 North
  America    159.7    164.4   -3%    213.2    268.9  -21%    749  611   22%
 Europe &
  other        3.1      6.9  -54%      3.6     15.0  -76%    884  457   94%
           -------  -------  ---   -------  -------  ---   -----  ---  ---
Total long
 products    234.5    198.2   18%    308.7    339.1   -9%    760  585   30%
Total flat
 and long
 products  1,642.6  1,690.3   -3%  1,546.8  2,044.0  -24%  1,062  827   28%
Other
 products
  (1)         78.5     32.8  139%
           -------  -------  ---
Total Net
 Sales     1,721.1  1,723.1    0%


(1) Primarily includes iron ore, pig iron and pre-engineered metal
buildings.

Sales of flat products during the fourth quarter 2008 totaled US$1.4 billion, a decrease of 6% compared with the same quarter in 2007. Net sales decreased as a result of lower shipments, partially offset by higher revenue per ton. Shipments of flat products totaled 1.2 million tons in the fourth quarter 2008, a decrease of 27% compared with the same period in 2007, mainly due to a decrease in demand in our main steel markets. Revenue per ton shipped increased 30% to US$1,137 in the fourth quarter 2008 compared with the same period in 2007, mainly due to higher steel prices.

Sales of long products were US$234.5 million in the fourth quarter 2008, an increase of 18% compared to the same period in 2007 mainly due to higher prices, partially offset by lower volumes. Shipments of long products totaled 309,000 tons in the fourth quarter 2008, a 9% decrease versus the same quarter in 2007, due to lower shipments in the North America Region partially offset by higher shipments in the South & Central America Region. Revenue per ton shipped was US$760 in the fourth quarter 2008, an increase of 30% compared to the fourth quarter 2007, mainly due to higher prices.

Sales of other products totaled US$78.5 million during the fourth quarter 2008, compared to US$32.8 million during the fourth quarter 2007. The increase was mainly driven by higher iron ore shipments and prices.

Sales of flat and long products in the North America Region were US$895.4 million in the fourth quarter 2008, a decrease of 14% versus the same period in 2007, due to lower shipments partially offset by higher revenue per ton. Shipments in the region totaled 855,000 tons during the fourth quarter 2008, or 32% lower than in the same period in 2007 as a result of lower demand from the region's main markets. Revenue per ton shipped in the region increased 27% to US$1,047 in the fourth quarter 2008 over the same quarter in 2007, mainly due to higher prices.

Flat and long product sales in the South & Central America Region were US$714.1 million during the fourth quarter 2008, an increase of 12% versus the same period in 2007. This increase was due to higher revenue per ton partially offset by lower shipments. Shipments in the region totaled 652,000 tons during the fourth quarter 2008, or 14% lower than in the fourth quarter 2007, due to the lower overall steel demand in the region, partially offset by an increase in the volume of long product sales. Revenue per ton shipped was US$1,096 in the fourth quarter 2008, an increase of 30% compared to the same quarter in 2007, mainly due to higher prices.

Cost of sales totaled US$1.4 billion in the fourth quarter 2008 compared to US$1.4 billion in the fourth quarter 2007. Cost of sales was stable in spite of lower shipments mainly as a result of higher costs for third party steel, raw materials and a US$68.3 million write-down of Ternium's inventory during the fourth quarter 2008, as well as an offsetting effect from the reduction in the US dollar value of inventories at the beginning of the year and purchased during the period, mainly as a result of the Mexican Peso's 25% devaluation to the US dollar.

In the fourth quarter 2008 the average price of scrap in Mexico was lower than in the fourth quarter 2007, while energy prices were relatively the same. The price of zinc was lower in the fourth quarter 2008 compared to the prior year period. Iron ore and coal costs were higher during the fourth quarter 2008 than they were in the same period in 2007, mainly as a result of higher annual contract prices for third party iron ore supplies.

SG&A expenses in the fourth quarter 2008 were US$159.6 million, or 9% of net sales, compared with US$166.5 million, or 10% of net sales, in the fourth quarter 2007.

Operating income in the fourth quarter 2008 was US$186.3 million, or 11% of net sales, compared with US$211.1 million, or 12% of net sales, in the fourth quarter 2007.

EBITDA(10) in the fourth quarter 2008 was US$281.1 million, or 16% of net sales, compared with US$330.1 million, or 19% of net sales, in the fourth quarter 2007. Equity holders' EBITDA in the fourth quarter 2008 was 71% of EBITDA.

Net financial expenses were US$681.7 million in the fourth quarter 2008, compared with US$38.9 million in the fourth quarter 2007. During the fourth quarter 2008, Ternium's net interest expenses were US$26.8 million, a decrease of US$20.9 million compared to the fourth quarter 2007 due to lower indebtedness and lower interest rates.

Net foreign exchange result was a loss of US$622.5 million in the fourth quarter 2008 compared to a gain of $25.6 million in the same period in 2007. This was primarily due to the impact of the Mexican Peso's 25% devaluation on Ternium's Mexican subsidiary's US dollar denominated debt. In accordance with IFRS, Ternium Mexico prepares its financial statements in Mexican Pesos and registers foreign exchange results on its net non-Mexican Pesos positions when the Mexican Peso revaluates or devaluates to other currencies. These results are non-cash when measured in US dollars and are offset by changes in Ternium's net equity position in the currency translation adjustments line, as the value of Ternium Mexico's US dollar denominated debt is not altered by the Mexican Peso fluctuation when stated in US dollars in Ternium's consolidated financial statements.

Fair value of derivatives result was a loss of US$29.0 million in the fourth quarter 2008 compared to a loss of US$8.3 million in the fourth quarter 2007, related to some derivative instruments entered into by Ternium mainly to mitigate the effects of interest rates and foreign exchange fluctuations.

Income tax benefit for the fourth quarter 2008 was US$145.9 million, or 30% of loss before income tax, compared with an income tax expense of US$70.1 million, or 40% of income before income tax, discontinued operations and minority interest, in the same period in 2007.

Net result of discontinued operations was not registered for the fourth quarter 2008. Net result of discontinued operations in the fourth quarter 2007 was a gain of US$117.7 million, mainly related to Sidor.

Loss attributable to minority interest for the fourth quarter 2008 was US$14.5 million, compared to income attributable to minority interest of US$55.8 million in the fourth quarter 2007, mainly due to a lower result attributable to minority interest in Siderar.


Cash Flow and Liquidity

Net cash provided by continuing operations was US$517.5 million in 2008, lower than the US$936.4 million reported in 2007, mainly due to a working capital increase of US$1.1 billion, partially offset by increased operating income in 2008. Working capital was higher in 2008 than in 2007 mainly as a result of a US$821.7 million increase in inventories and a US$212.6 million decrease in accounts payable mainly due to a reduction in the volume of slab and raw material purchases during the second half of 2008. Inventories increased during the first nine months of 2008 as a result of higher costs due to higher input prices as well as higher volume of finished goods, goods in process and raw materials. This upward trend in volume reversed during the fourth quarter 2008 with a substantial reduction in inventories of finished goods, goods in process and raw materials as a result of declining demand.

Capital expenditures in 2008 were US$587.9 million, compared to US$344.3 million in 2007. Capital expenditures during 2008 were carried out in Mexico principally for the expansion of the flat steel shop in Monterrey, the upgrading of one hot strip mill and the upgrading of one cold rolled mill. Ternium's capital expenditures in Argentina during 2008 were mainly related to the relining of one blast furnace and the revamping and expansion of the coking facilities.

In 2008, Ternium had negative free cash flow(11) of US$70.4 million compared to positive free cash flow(11) of US$592.1 million in 2007. Proceeds from the first quarter 2008 sale of non-core US assets totaled US$718.6 million in 2008. Net cash provided by discontinued operations related to Sidor and the results of the non-core US assets that were sold was US$242.4 million in 2008, compared to US$419.3 million in 2007, which was mainly related to Sidor.

Ternium's net repayment of borrowings in 2008 was US$633.1 million, mostly related to the pre-payment of some of the Company's Mexican subsidiaries' outstanding debt. Ternium's dividend payment in 2008 was US$100.2 million, similar to that of 2007.

Net cash provided by continuing operations in the fourth quarter 2008 was US$576.2 million, higher than the US$11.9 million in net cash used in continuing operations in the third quarter 2008 mainly as a result of a working capital decrease of US$380.4 million in the fourth quarter 2008 compared to a working capital increase of US$550.7 million in the third quarter 2008. The decrease in working capital in the fourth quarter 2008 was mainly due to a US$518.9 million decrease of inventories and a US$256.4 million decrease in trade receivables, partially offset by a US$296.6 million decrease in accounts payable. Inventories decreased principally as a result of lower volume of finished goods, goods in process and raw materials, as Ternium implemented a de-stocking process in response to lower demand for steel products, partially offset by higher costs mainly due to higher input prices in Argentina. Trade receivables decreased due to lower volumes and sale prices during the fourth quarter 2008, while accounts payable decreased as a result of a reduction in the volume of slab and raw materials purchases.

Capital expenditures in the fourth quarter 2008 were US$172.6 million, compared to US$168.3 million in the third quarter 2008. In the fourth quarter 2008, Ternium had positive free cash flow(12) of US$403.6 million, compared to negative free cash flow(12) of US$180.2 million in the third quarter 2008.

As of December 31, 2008, Ternium's financial debt was US$3.3 billion, of which US$941.5 million will mature during 2009, while the company's cash, cash equivalents and other investments totaled US$1.2 billion. Ternium's net financial debt(13) of US$2.1 billion at the close of the fourth quarter 2008 decreased US$392.8 million compared to net financial debt as of September 30, 2008. The company believes that available cash and marketable securities and funds from operations will be sufficient to fund its operations. The company has not negotiated additional credit facilities.

Forward-Looking Statements

Some of the statements contained in this press release are "forward-looking statements." Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to gross domestic product, related market demand, global production capacity, tariffs, cyclicality in the industries that purchase steel products and other factors beyond Ternium's control.

About Ternium

Ternium is one of the leading steel companies in Latin America, manufacturing and processing a wide range of flat and long steel products for customers active in the construction, home appliances, capital goods, container, food and automotive industries. With its principal operations in Mexico and Argentina, Ternium serves markets in the Americas through its integrated manufacturing system and extensive distribution network. The Company has annual production capacity of approximately 9 million tons of finished steel products. More information about Ternium is available at www.ternium.com.

(1) Sidor's results of operations have been deconsolidated from Ternium's Financial Statements and are shown as Discontinued Operations. Discontinued Operations also include results from the non-core US assets that were sold during the first quarter 2008. In addition, accounting for Ternium's investments in Consorcio Minero Benito Juarez Peña Colorada S.A. de C.V. and Peña Colorada Servicios S.A. de C.V. has been remade under the proportionate consolidation method, with no material effect from such modification.

(2) Sidor's results of operations have been deconsolidated from Ternium's Financial Statements and are shown as Discontinued Operations. Discontinued Operations also include results from the non-core US assets that were sold during the first quarter 2008. In addition, accounting for Ternium's investments in Consorcio Minero Benito Juarez Peña Colorada S.A. de C.V. and Peña Colorada Servicios S.A. de C.V. has been made under the proportionate consolidation method, with no material effect from such modification.

(3) Free cash flow for the fourth quarter 2008 equals net cash provided by continuing operations of US$576.2 million less capital expenditures of US$172.6 million.

(4) Net financial debt in the fourth quarter 2008 equals borrowings of US$ 3.3 billion less cash and cash equivalents of US$1.1 billion and other investments of US$90.0 million.

(5) Net financial debt in the fourth quarter 2008 equals borrowings of US$ 3.3 billion less cash and cash equivalents of US$1.1 billion and other investments of US$90.0 million.

(6) EBITDA is operating income plus depreciation and amortization.

(7) Each American Depositary Share (ADS) represents 10 shares of Ternium's common stock. Results are based on a weighted average number of shares of common stock outstanding of 2,004,743,442.

(8) EBITDA in 2008 equals operating income of US$1.7 billion plus depreciation and amortization of US$413.5 million.

(9) Each American Depositary Share (ADS) represents 10 shares of Ternium's common stock. Results are based on a weighted average number of shares of common stock outstanding of 2,004,743,442.

(10) EBITDA in the fourth quarter 2008 equals operating income of US$186.3 million plus depreciation and amortization of US$94.9 million.

(11) Free cash flow for 2008 equals net cash provided by continuing operations of US$517.5 million less capital expenditures of US$587.9 million, while free cash flow for 2007 equals net cash provided by continuing operations of US$936.4 million less capital expenditures of US$344.3 million.

(12) Free cash flow for the fourth quarter 2008 equals net cash provided by continuing operations of US$576.2 million less capital expenditures of US$172.6 million, while free cash flow for the third quarter 2008 equals net cash used in continuing operations of US$11.9 million less capital expenditures of US$168.3 million.

(13) Net financial debt in the fourth quarter 2008 equals borrowings of US$ 3.3 billion less cash and cash equivalents of US$1.1 billion and other investments of US$90.0 million.



Consolidated income statement


  US$ million    4Q 2008   4Q 2007      Dif.     Year      Year      Dif.
                                                 2008      2007

  Net sales      1,721.1   1,723.1      (2.0)  8,464.9   5,633.4   2,831.5
  Cost of
   sales        (1,376.7) (1,350.8)    (25.9) (6,128.0) (4,287.7) (1,840.4)
                --------  --------  --------  --------  --------  --------
Gross profit       344.4     372.3     (27.9)  2,336.9   1,345.7     991.2
  Selling,
   general and
   adminis-
   trative
   expenses       (159.6)   (166.5)      6.9    (669.5)   (517.4)   (152.0)
  Other
   operating
   income
   (expenses),
   net               1.4       5.3      (3.9)      8.7       8.5       0.1
                --------  --------  --------  --------  --------  --------
Operating
 income            186.3     211.1     (24.8)  1,676.0     836.8     839.3

  Interest
   expense         (32.7)    (61.4)     28.8    (136.1)   (133.1)     (3.0)
  Interest
   income            5.9      13.7      (7.9)     32.2      41.6      (9.4)
  Other
   financial
   (expenses)
   income, net    (654.9)      8.8    (663.7)   (693.2)    (38.5)   (654.7)

  Equity in
   earnings of
   associated
   companies         1.1       1.6      (0.5)      1.9       0.4       1.4
                --------  --------  --------  --------  --------  --------
Income before
 income tax
 expense          (494.4)    173.8    (668.1)    880.8     707.2     173.6

Income tax
 (expense)
 benefit
  Current and
   deferred
   income tax
   expense         145.9     (70.1)    216.0    (259.0)   (291.3)     32.3
  Reversal of
   deferred
   statutory
   profit
   sharing             -         -         -      96.3         -      96.3
Discontinued
 operations            -     117.7    (117.7)    157.1     579.9    (422.8)
Net (loss)
 income for the
 period           (348.5)    221.4    (569.8)    875.2     995.8    (120.6)

Attributable
 to:
  Equity
   holders of
   the Company    (334.0)    165.6    (499.6)    715.4     784.5     (69.1)
  Minority
   interest        (14.5)     55.8     (70.2)    159.7     211.3     (51.6)
                --------  --------  --------  --------  --------  --------
                  (348.5)    221.4    (569.8)    875.2     995.8    (120.6)




Consolidated balance sheet


         US$ million                December 31, 2008  December 31, 2007(1)

  Property, plant and equipment,
   net                                        4,212.3               6,776.6
  Intangible assets, net                      1,136.4               1,449.3
  Investment in associated
   companies                                      5.6                  44.0
  Other investments, net                         16.9                  14.8
  Deferred tax assets                               -                  31.8
  Receivables, net                              120.2                 236.5
                                 --------------------  --------------------
Total non-current assets                      5,491.4               8,553.1

  Receivables                                   249.0                 405.0
  Derivative financial
   instruments                                    1.5                   0.6
  Inventories, net                            1,826.5               1,904.5
  Trade receivables, net                        623.0                 825.6
  Available for sale assets                   1,318.9                     -
  Other investments                              90.0                  65.3
  Cash and cash equivalents                   1,065.6               1,125.8
                                 --------------------  --------------------
Total current assets                          5,174.5               4,326.8

Non-current assets classified
 as held for sale                                 5.3                 769.1
                                 --------------------  --------------------

Total assets                                 10,671.2              13,649.1

Shareholders' equity                          4,597.4               4,452.7

Minority interest in
 subsidiaries                                   964.1               1,805.2

Minority interest &
 shareholders' equity                         5,561.5               6,257.9
  Provisions                                     24.4                  57.3
  Deferred income tax                           810.2               1,327.8
  Other liabilities                             148.7                 333.7
  Trade payables                                    -                   6.7
  Derivative financial
   instruments                                   65.8                     -
  Borrowings                                  2,325.9               3,676.1
                                 --------------------  --------------------
Total non-current liabilities                 3,375.0               5,401.5

  Current tax liabilities                       194.1                 179.7
  Other liabilities                             103.4                 181.0
  Trade payables                                438.7                 995.7
  Derivative financial
   instruments                                   57.2                  13.3
  Borrowings                                    941.5                 406.2
                                 --------------------  --------------------
Total current liabilities                     1,734.8               1,775.8

Liabilities related to
 non-current assets classified
 as held for sale                                   -                 213.8

                                 --------------------  --------------------
Total liabilities                             5,109.8               7,391.2

Total liabilities, minority
 interest & shareholders' equity             10,671.2              13,649.1


(1) According to IFRS 5, balances related to Sidor have been consolidated
    on a line-by-line basis as of December 31, 2007.




Consolidated cash flow statement


  US$ million    4Q 2008   3Q 2008     Dif.      Year      Year      Dif.
                                                 2008      2007
Net income from
 continuing
 operations       (348.5)    250.1    (598.6)    718.1     415.9     302.2
  Adjustments
   for:
   Depreciation
   and
   amortization     94.9     111.8     (16.9)    413.5     355.3      58.3
  Equity in
   earnings of
   associated
   companies        (1.1)      0.1      (1.2)     (1.9)     (0.4)     (1.4)
  Changes in
   provisions       (2.3)      2.8      (5.2)      2.4       3.0      (0.6)
  Net foreign
   exchange and
   others          649.8     137.3     512.5     629.5      28.9     600.7
  Interest
   accruals less
   payments          1.6      (1.1)      2.6     (84.2)     87.6    (171.7)
  Income tax
   accruals less
   payments       (198.5)     37.7    (236.2)    (88.5)    (51.5)    (37.0)
  Changes in
   working
   capital         380.4    (550.7)    931.0  (1,071.5)     97.7  (1,169.2)
                --------  --------  --------  --------  --------  --------

Net cash
 provided by
 (used in)
 operating
 activities        576.2     (11.9)    588.1     517.5     936.4    (418.9)

  Capital
   expenditures   (172.6)   (168.3)     (4.3)   (587.9)   (344.3)   (243.6)
  Proceeds from
   sale of
   property,
   plant &
   equipment         0.7       0.4       0.2       2.1      24.5     (22.4)
  Change in trust
   funds               -         -         -         -         -         -
  Acquisition of
   business                      -
Purchase
 consideration         -         -         -         -  (1,728.9)  1,728.9
Cash acquired          -         -         -         -     190.1    (190.1)
  Income tax
   credit paid
   on business
   acquisition         -         -         -         -    (297.7)    297.7
  Investments in
   associated
   companies           -         -         -         -         -         -
  Increase in
   Other
   Investments      (0.9)    (89.1)     88.2     (24.7)    (65.3)     40.7
  Proceeds from
   sale of
   discontinued
   operations          -      (3.9)      3.9     718.6         -     718.6
  Discontinued
   operations          -     152.6    (152.6)    242.4     419.3    (176.9)
                --------  --------  --------  --------  --------  --------

Net cash (used
 in) provided
 by investing
 activities       (172.8)   (108.3)    (64.5)    350.5  (1,802.3)  2,152.8

  Dividends paid
   in cash and
   other
   distributions
   to company's
   equity
   shareholders        -         -         -    (100.2)   (100.2)        -
  Dividends paid
   in cash and
   other
   distributions
   to minority
   shareholders        -         -         -     (19.6)    (20.0)      0.4
  Net proceeds
   from Initial
   Public
   Offering            -         -         -         -         -         -
  Contributions
   from
   shareholders        -         -         -         -         -         -
  Contributions
   from minority
   shareholders
   in
   consolidated
   subsidiaries        -         -         -         -       1.2      (1.2)
  Proceeds from
   borrowings      147.8     190.7     (42.8)    519.8   4,052.7  (3,532.9)
  Repayment of
   borrowings      (78.9)   (142.5)     63.6  (1,152.9) (2,574.6)  1,421.7
                --------  --------  --------  --------  --------  --------
Net cash
 provided by
 (used in)
 financing
 activities         68.9      48.1      20.8    (752.9)  1,359.0  (2,112.0)

Increase
 (decrease) in
 cash and cash
 equivalents       472.2     (72.1)    544.3     115.1     493.1    (378.0)




                                Shipments

        Thousand tons           4Q 2008  3Q 2008  4Q 2007  FY 2008  FY 2007

  South & Central America         559.9    680.4    699.0  2,604.2  2,499.1
  North America                   642.2    901.8    993.6  3,666.1  3,034.9
  Europe & other                   36.0      2.8     12.3     55.2    184.9
                                -------  -------  -------  -------  -------
Total flat products             1,238.1  1,585.1  1,704.9  6,325.5  5,718.9

  South & Central America          91.9     86.0     55.2    302.5    132.8
  North America                   213.2    173.3    268.9    901.3  1,113.4
  Europe & other                    3.6        -     15.0     13.3     15.0
                                -------  -------  -------  -------  -------
Total long products               308.7    259.2    339.1  1,217.2  1,261.2

Total flat and long products    1,546.8  1,844.3  2,044.0  7,542.7  6,980.1


                              Revenue / ton

        US$/ton                 4Q 2008  3Q 2008  4Q 2007  FY 2008  FY 2007

  South & Central America         1,147    1,153      870    1,068      815
  North America                   1,146    1,412      882    1,171      847
  Europe & other                    834      933      641      860      665
                                -------  -------  -------  -------  -------
Total flat products               1,137    1,300      875    1,126      827

  South & Central America           780    1,212      489      907      527
  North America                     749    1,108      611      878      625
  Europe & other                    884        -      457      669      457
                                -------  -------  -------  -------  -------
Total long products                 760    1,142      585      883      613

Total flat and long products      1,062    1,278      827    1,087      789


                                Net Sales

       US$ million              4Q 2008  3Q 2008  4Q 2007  FY 2008  FY 2007

  South & Central America         642.4    784.4    607.9  2,782.5  2,037.0
  North America                   735.7  1,273.4    876.3  4,294.7  2,571.8
  Europe & other                   30.0      2.6      7.9     47.5    123.0
                                -------  -------  -------  -------  -------
Total flat products             1,408.1  2,060.4  1,492.0  7,124.7  4,731.7

  South & Central America          71.7    104.2     27.0    274.4     70.0
  North America                   159.7    192.0    164.4    791.8    696.0
  Europe & other                    3.1        -      6.9      8.9      6.9
                                -------  -------  -------  -------  -------
Total long products               234.5    296.2    198.2  1,075.1    772.8

                                -------  -------  -------  -------  -------
Total flat and long products    1,642.6  2,356.6  1,690.3  8,199.8  5,504.5

Other products (1)                 78.5     80.3     32.8    265.1    128.8
                                -------  -------  -------  -------  -------

Total net sales                 1,721.1  2,436.9  1,723.1  8,464.9  5,633.4


(1) Includes iron ore, pig iron and metal buildings.




Consolidated income statement (historical series including Consorcio Minero
Benito Juarez Peña Colorada S.A. de C.V. and Peña Colorada Servicios S.A.
de C.V. under the proportionate consolidation method)


    US$ million      Year 2008    4Q 2008    3Q 2008    2Q 2008    1Q 2008

  Net sales            8,464.9    1,721.1    2,436.9    2,364.2    1,942.6
  Cost of sales       (6,128.0)  (1,376.7)  (1,724.1)  (1,579.5)  (1,447.7)
                     ---------  ---------  ---------  ---------  ---------
Gross profit           2,336.9      344.4      712.8      784.8      494.9
  Selling, general
   and
   administrative
   expenses             (669.5)    (159.6)    (184.8)    (179.6)    (145.5)
  Other operating
   income
   (expenses), net         8.7        1.4       (3.8)       1.1       10.0
                     ---------  ---------  ---------  ---------  ---------
Operating income       1,676.0      186.3      524.2      606.2      359.4

  Interest expense      (136.1)     (32.7)     (29.1)     (30.1)     (44.3)
  Interest income         32.2        5.9        2.2       12.0       12.1
  Other financial
   (expenses)
   income, net          (693.2)    (654.9)    (156.5)     115.3        3.0

  Equity in
   earnings
   (losses) of
   associated
   companies               1.9        1.1       (0.1)       0.4        0.4
                     ---------  ---------  ---------  ---------  ---------
Income (Loss)
 before income tax
 expense                 880.8     (494.4)     340.6      703.8      330.6
Income tax
 (expense) benefit
  Current and
   deferred income
   tax expense          (259.0)     145.9      (90.5)    (208.2)    (106.2)
  Reversal of
   deferred
   statutory
   profit sharing         96.3          -          -          -       96.3
Discontinued
 operations              157.1          -       (2.8)       0.0      159.9

Net income (loss)
 for the year /
 period                  875.2     (348.5)     247.3      495.7      480.7

Attributable to:
  Equity holders
   of the Company        715.4     (334.0)     211.7      415.6      422.1
  Minority
   interest              159.7      (14.5)      35.6       80.0       58.6
                     ---------  ---------  ---------  ---------  ---------
                         875.2     (348.5)     247.3      495.7      480.7




    US$ million      Year 2007    4Q 2007    3Q 2007    2Q 2007    1Q 2007

  Net sales            5,633.4    1,723.1    1,496.9    1,246.9    1,166.5
  Cost of sales       (4,287.7)  (1,350.8)  (1,135.6)    (927.0)    (874.3)
                    ---------- ---------- ---------- ---------- ----------
Gross profit           1,345.7      372.3      361.3      319.9      292.2
  Selling, general
   and
   administrative
   expenses             (517.4)    (166.5)    (143.0)    (116.5)     (91.5)
  Other operating
   income
   (expenses), net         8.5        5.3        0.4       (3.7)       6.5
                     ---------  ---------  ---------  ---------  ---------
Operating income         836.8      211.1      218.7      199.8      207.2

  Interest expense      (133.1)     (61.4)     (47.1)     (10.4)     (14.1)
  Interest income         41.6       13.7       12.9        7.7        7.2
  Other financial
   (expenses)
   income, net           (38.5)       8.8      (53.7)     (10.8)      17.2

  Equity in earnings
   (losses) of
   associated
   companies               0.4        1.6       (0.3)      (0.4)      (0.5)
                     ---------  ---------  ---------  ---------  ---------
Income before income
 tax expense             707.2      173.8      130.4      186.0      217.0
Income tax (expense)
 benefit
  Current and
   deferred income
   tax expense          (291.3)     (70.1)     (63.0)     (71.9)     (86.3)
  Reversal of
   deferred
   statutory profit
   sharing                   -          -          -          -          -
Discontinued
 operations              579.9      117.7      143.5      199.0      119.8
Net income for the
 year / period           995.8      221.4      210.9      313.0      250.5

Attributable to:
  Equity holders of
   the Company           784.5      165.6      159.8      236.9      222.1
  Minority interest      211.3       55.8       51.1       76.1       28.3
                     ---------  ---------  ---------  ---------  ---------
                         995.8      221.4      210.9      313.0      250.5




Consolidated balance sheet (historical series including Consorcio Minero
Benito Juarez Peña Colorada S.A. de C.V. and Peña Colorada Servicios S.A.
de C.V. under the proportionate consolidation method)


                      December  September   June 30,   March 31,  December
     US$ million      31, 2008   30, 2008     2008       2008     31, 2007

  Property, plant
   and equipment,
   net                 4,212.3    4,948.2    5,101.5    6,830.4    6,776.6
  Intangible
   assets, net         1,136.4    1,418.4    1,497.5    1,460.7    1,449.3
  Investment in
   associated
   companies               5.6        4.6        4.7       44.7       44.0
  Other
   investments, net       16.9       17.0       15.4       15.3       14.8
  Deferred tax
   assets                    -        5.4        2.2       24.1       31.8
  Receivables, net       120.2      106.4       96.9       77.5      236.5
                     ---------  ---------  ---------  ---------  ---------
Total non-current
 assets                5,491.4    6,499.9    6,718.3    8,452.7    8,553.1

  Receivables            249.0      100.4      219.1      558.6      405.0
  Derivative
   financial
   instruments             1.5        0.1        0.5          -        0.6
  Inventories, net     1,826.5    2,752.2    2,328.7    2,119.7    1,904.5
  Trade
   receivables, net      623.0      927.1    1,023.1      898.2      825.6
  Available for
   sale assets         1,318.9    1,318.9    1,318.9          -          -
  Other investments       90.0       89.1          -       66.1       65.3
  Cash and cash
   equivalents         1,065.6      611.9      688.6      996.4    1,125.8
                     ---------  ---------  ---------  ---------  ---------
Total current
 assets                5,174.5    5,799.7    5,578.8    4,639.0    4,326.8

Current assets
 classified as
 held for sale             5.3        6.3        6.7        7.1      769.1
                     ---------  ---------  ---------  ---------  ---------

Total assets          10,671.2   12,305.9   12,303.8   13,098.8   13,649.1

Shareholders'
 equity                4,597.4    5,516.9    5,353.2    4,902.7    4,452.7
Minority interest
 in subsidiaries         964.1    1,099.5    1,074.2    1,864.7    1,805.2

Minority interest &
 shareholders'
 equity                5,561.5    6,616.4    6,427.4    6,767.4    6,257.9

  Provisions              24.4       30.7       29.3       59.6       57.3
  Deferred income
   tax liabilities       810.2      977.9    1,221.5    1,147.4    1,327.8
  Tax liabilities            -       69.5          -        1.5          -
  Other liabilities      148.7      171.8      173.4      361.5      333.7
  Trade payables             -          -          -        6.6        6.7
  Derivative
   financial
   instruments            65.8          -          -          -          -
  Borrowings           2,325.9    2,322.0    2,568.1    2,630.5    3,676.1
                     ---------  ---------  ---------  ---------  ---------
Total non-current
 liabilities           3,375.0    3,571.8    3,992.2    4,207.1    5,401.5

  Current tax
   liabilities           194.1      249.0      196.5      275.6      179.7
  Other liabilities      103.4      132.9      136.4      178.5      181.0
  Trade payables         438.7      822.3      940.1    1,098.0      995.7
  Derivative
   financial
   instruments            57.2       29.9       15.4       29.5       13.3
  Borrowings             941.5      883.6      595.8      542.7      406.2
                     ---------  ---------  ---------  ---------  ---------
Total current
 liabilities           1,734.8    2,117.6    1,884.1    2,124.4    1,775.8

Liabilities related
 to non-current
 assets classified
 as held for sale            -          -          -          -      213.8
                     ---------  ---------  ---------  ---------  ---------

Total liabilities      5,109.8    5,689.4    5,876.3    6,331.4    7,391.2

Total liabilities,
 minority interest
 & shareholders'
 equity               10,671.2   12,305.9   12,303.8   13,098.8   13,649.1




Consolidated cash flow statement (historical series including Consorcio
Minero Benito Juarez Peña Colorada S.A. de C.V. and Peña Colorada Servicios
S.A. de C.V. under the proportionate consolidation method)


     US$ million     Year 2008   4Q 2008    3Q 2008    2Q 2008    1Q 2008

  Net income for
   the period/year       718.1     (348.5)     250.1      495.7      320.8
  Adjustments for:
  Depreciation and
   amortization          413.5       94.9      111.8      101.9      105.0
  Equity in
   (earnings) losses
   of associated
   companies              (1.9)      (1.1)       0.1       (0.4)      (0.4)
  Changes in
   provisions              2.4       (2.3)       2.8        0.7        1.2
  Net foreign
   exchange and
   others                629.5      649.8      137.3     (117.9)     (39.7)
  Interest accruals
   less payments         (84.2)       1.6       (1.1)       3.0      (87.7)
  Income tax
   accruals less
   payments              (88.5)    (198.5)      37.7      139.7      (67.3)
  Changes in working
   capital            (1,071.5)     380.4     (550.7)    (671.1)    (230.1)
                     ---------  ---------  ---------  ---------  ---------

Net cash provided by
 (used in) operating
 activities              517.5      576.2      (11.9)     (48.5)       1.7

  Capital
   expenditures         (587.9)    (172.6)    (168.3)    (146.5)    (100.5)
  Proceeds from sale
   of property,
   plant & equipment       2.1        0.7        0.4        0.3        0.7
  Acquisition of
   business
Purchase
 consideration               -          -          -          -          -
Cash acquired                -          -          -          -          -
  Income tax credit
   paid on business
   acquisition               -          -          -          -          -
  (Increase)
   Decrease in Other
   Investments           (24.7)      (0.9)     (89.1)      66.1       (0.8)
  Proceeds from sale
   of discontinued
   operations            718.6          -       (3.9)         -      722.5
  Discontinued
   operations            242.4          -      152.6       57.7       32.2
                     ---------  ---------  ---------  ---------  ---------

Net cash provided by
 (used in) investing
 activities              350.5     (172.8)    (108.3)     (22.4)     654.0

  Dividends paid in
   cash and other
   distributions
   to company's
   equity
   shareholders         (100.2)         -          -     (100.2)         -
  Dividends paid in
   cash and other
   distributions
   to minority
   shareholders          (19.6)         -          -      (19.6)         -
  Contributions from
   minority
   shareholders
   in consolidated
   subsidiaries              -          -          -          -          -
  Proceeds from
   borrowings            519.8      147.8      190.7       76.3      105.0
  Repayment of
   borrowings         (1,152.9)     (78.9)    (142.5)     (40.3)    (891.2)
                     ---------  ---------  ---------  ---------  ---------

Net cash (used in)
 provided by
 financing
 activities             (752.9)      68.9       48.1      (83.8)    (786.2)

Increase (Decrease)
 in cash and cash
 equivalents             115.1      472.2      (72.1)    (154.6)    (130.4)




Consolidated cash flow statement (historical series including Consorcio
Minero Benito Juarez Peña Colorada S.A. de C.V. and Peña Colorada Servicios
S.A. de C.V. under the proportionate consolidation method)


     US$ million     Year 2007    4Q 2007    3Q 2007    2Q 2007    1Q 2007

  Net income for
   the period/year       415.9      103.7       67.4      114.1      130.7
  Adjustments for:
  Depreciation and
   amortization          355.3      118.9       94.2       77.6       64.6
  Equity in
   (earnings) losses
   of associated
   companies              (0.4)      (1.6)       0.3        0.4        0.5
  Changes in
   provisions              3.0        2.1        0.6        0.5       (0.3)
  Net foreign
   exchange and
   others                 28.9      (13.1)      45.3       10.0      (13.4)
  Interest accruals
   less payments          87.6       54.9       35.4        2.4       (5.1)
  Income tax
   accruals less
   payments              (51.5)     (31.1)     (16.2)     (68.0)      63.8
  Changes in working
   capital                97.7      (49.3)       4.1       54.9       88.1
                     ---------  ---------  ---------  ---------  ---------

Net cash provided by
 (used in) operating
 activities              936.4      184.7      231.1      191.8      328.8

  Capital
   expenditures         (344.3)    (100.1)     (81.5)     (76.0)     (86.7)
  Proceeds from sale
   of property,
   plant & equipment      24.5       17.8        0.5        1.1        5.1
  Acquisition of
   business
Purchase
 consideration        (1,728.9)      (0.1)  (1,728.7)      (0.1)         -
Cash acquired            190.1          -      190.1          -          -
  Income tax credit
   paid on business
   acquisition          (297.7)         -     (297.7)         -          -
  Investments in
   associated
   companies                 -
  (Increase)
   Decrease in Other
   Investments           (65.3)      (0.8)     (64.5)         -          -
  Discontinued
   operations            419.3       34.1      116.0       59.9      209.4
                     ---------  ---------  ---------  ---------  ---------

Net cash (used in)
 provided by
 investing
 activities           (1,802.3)     (49.1)  (1,865.8)     (15.2)     127.8

  Dividends paid in
   cash and other
   distributions
   to company's
   equity
   shareholders         (100.2)         -          -     (100.2)         -
  Dividends paid in
   cash and other
   distributions
   to minority
   shareholders          (20.0)         -       (0.1)     (19.9)         -
  Contributions from
   minority
   shareholders
   in consolidated
   subsidiaries            1.2        0.0        1.1          -          -
  Proceeds from
   borrowings          4,052.7       70.8    3,869.7       72.1       40.1
  Repayment of
   borrowings         (2,574.6)    (157.5)  (1,889.6)    (371.6)    (156.0)
                     ---------  ---------  ---------  ---------  ---------

Net cash provided by
 (used in) financing
 activities            1,359.0      (86.7)   1,981.1     (419.6)    (115.8)

Increase (Decrease)
 in cash and cash
 equivalents             493.1       48.9      346.4     (243.0)     340.7




Net Sales (historical series including Consorcio Minero Benito Juarez Peña
Colorada S.A. de C.V. and Peña Colorada Servicios S.A. de C.V. under the
proportionate consolidation method)


Shipments (historical series ex-Sidor)

   Thousand tons     Year 2008    4Q 2008    3Q 2008    2Q 2008    1Q 2008

  South & Central
   America             2,604.2      559.9      680.4      690.9      673.0
  North America        3,666.1      642.2      901.8    1,042.2    1,080.0
  Europe & other          55.2       36.0        2.8       11.6        4.8
                     ---------  ---------  ---------  ---------  ---------
Total flat products    6,325.5    1,238.1    1,585.1    1,744.7    1,757.7

  South & Central
   America               302.5       91.9       86.0       67.9       56.7
  North America          901.3      213.2      173.3      249.6      265.3
  Europe & other          13.3        3.6          -        1.0        8.8
                     ---------  ---------  ---------  ---------  ---------
Total long products    1,217.2      308.7      259.2      318.5      330.7

Total flat and long
 products              7,542.7    1,546.8    1,844.3    2,063.2    2,088.5


Revenue / ton (historical series ex-Sidor)

     US$/ton         Year 2008    4Q 2008    3Q 2008    2Q 2008    1Q 2008

  South & Central
   America               1,068      1,147      1,153      1,042        945
  North America          1,171      1,146      1,412      1,213        945
  Europe & other           860        834        933        864      1,008
                     ---------  ---------  ---------  ---------  ---------
Total flat products      1,126      1,137      1,300      1,143        945

  South & Central
   America                 907        780      1,212        913        643
  North America            878        749      1,108      1,017        703
  Europe & other           669        884          -        630        587
                     ---------  ---------  ---------  ---------  ---------
Total long products        883        760      1,142        993        689

Total flat and long
 products                1,087      1,062      1,278      1,120        905


Net Sales (historical series ex-Sidor)

     US$ million     Year 2008    4Q 2008    3Q 2008    2Q 2008    1Q 2008

  South & Central
   America             2,782.5      642.4      784.4      719.9      635.8
  North America        4,294.7      735.7    1,273.4    1,264.6    1,021.0
  Europe & other          47.5       30.0        2.6       10.0        4.8
                     ---------  ---------  ---------  ---------  ---------
Total flat products    7,124.7    1,408.1    2,060.4    1,994.5    1,661.6

  South & Central
   America               274.4       71.7      104.2       62.1       36.4
  North America          791.8      159.7      192.0      253.8      186.4
  Europe & other           8.9        3.1          -        0.6        5.2
                     ---------  ---------  ---------  ---------  ---------
Total long products    1,075.1      234.5      296.2      316.4      228.0
                     ---------  ---------  ---------  ---------  ---------
Total flat and long
 products              8,199.8    1,642.6    2,356.6    2,311.0    1,889.6

Other products (1)       265.1       78.5       80.3       53.2       53.0
                     ---------  ---------  ---------  ---------  ---------

Total net sales        8,464.9    1,721.1    2,436.9    2,364.2    1,942.6




Shipments (historical series ex-Sidor)

   Thousand tons     Year 2007    4Q 2007    3Q 2007    2Q 2007    1Q 2007

  South & Central
   America             2,499.1      699.0      637.8      598.9      563.5
  North America        3,034.9      993.6      834.7      592.1      614.5
  Europe & other         184.9       12.3       18.5      101.2       52.8
                     ---------  ---------  ---------  ---------  ---------
Total flat products    5,718.9    1,704.9    1,491.0    1,292.1    1,230.8

  South & Central
   America               132.8       55.2       52.3       25.3          -
  North America        1,113.4      268.9      244.8      286.4      313.3
  Europe & other          15.0       15.0          -          -          -
                     ---------  ---------  ---------  ---------  ---------
Total long products    1,261.2      339.1      297.1      311.7      313.3

Total flat and long
 products              6,980.1    2,044.0    1,788.1    1,603.9    1,544.1


Revenue / ton (historical series ex-Sidor)

     US$/ton         Year 2007    4Q 2007    3Q 2007    2Q 2007    1Q 2007

  South & Central
   America                 815        870        829        779        769
  North America            847        882        877        817        781
  Europe & other           665        641        619        682        654
                     ---------  ---------  ---------  ---------  ---------
Total flat products        827        875        853        789        770

  South & Central
   America                 527        489        550        565          -
  North America            625        611        637        638        616
  Europe & other           457        457          -          -          -
                     ---------  ---------  ---------  ---------  ---------
Total long products        613        585        622        632        616

Total flat and long
 products                  789        827        815        758        739


Net Sales (historical series ex-Sidor)

     US$ million     Year 2007    4Q 2007    3Q 2007    2Q 2007    1Q 2007

  South & Central
   America             2,037.0      607.9      528.9      466.6      433.5
  North America        2,571.8      876.3      731.8      483.6      480.1
  Europe & other         123.0        7.9       11.5       69.1       34.5
                     ---------  ---------  ---------  ---------  ---------
Total flat products    4,731.7    1,492.0    1,272.2    1,019.2      948.2

  South & Central
   America                70.0       27.0       28.7       14.3          -
  North America          696.0      164.4      156.0      182.6      192.9
  Europe & other           6.9        6.9          -          -          -
                     ---------  ---------  ---------  ---------  ---------
Total long products      772.8      198.2      184.8      196.9      192.9
                     ---------  ---------  ---------  ---------  ---------
Total flat and long
 products              5,504.5    1,690.3    1,457.0    1,216.2    1,141.1

Other products (1)       128.8       32.8       39.8       30.7       25.4
                     ---------  ---------  ---------  ---------  ---------

Total net sales        5,633.4    1,723.1    1,496.9    1,246.9    1,166.5


(1) Includes iron ore, pig iron and metal buildings.

Contact Information

  • Sebastián Martí
    Ternium - Investor Relations
    +1 (866) 890 0443
    +52 (81) 8865 2111
    +54 (11) 4018 2389
    www.ternium.com