FORM 6 - K



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


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

As of 08/02/2022

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

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


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

Form 20-F a Form 40-F __

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

Yes __ No a


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


The attached material is being furnished to the Securities and Exchange Commission pursuant to Rule 13a-16 and Form 6-K under the Securities Exchange Act of 1934, as amended.
This report contains Ternium S.A.’s consolidated financial statements as of June 30, 2022.


SIGNATURE

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



TERNIUM S.A.

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

Dated: August 2, 2022






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TERNIUM S.A.
Consolidated Condensed Interim Financial Statements
as of June 30, 2022
and for the six-month periods
ended on June 30, 2022 and 2021

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



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

Page 1 of
    
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021
(All amounts in $ thousands)







Consolidated Condensed Interim Income Statements
Three-month period ended
June 30, 		Six-month period ended
June 30,
Notes2022202120222021
(Unaudited)(Unaudited)
Net sales34,437,676 3,919,764 8,742,505 7,169,060 
Cost of sales3 & 4(3,058,908)(2,415,692)(6,043,093)(4,553,943)
Gross profit 31,378,768 1,504,072 2,699,412 2,615,117 
Selling, general and administrative expenses3 & 5(310,444)(244,531)(591,747)(454,898)
Other operating income, net 32,828 11,900 22,502 16,995 
Operating income 31,071,152 1,271,441 2,130,167 2,177,214 
Finance expense6(7,313)(6,796)(13,935)(14,024)
Finance income615,636 18,456 39,953 34,769 
Other financial (expense) income, net 628,856 11,233 (49,711)18,117 
Equity in earnings of non-consolidated companies949,273 171,054 108,022 217,573 
Profit before income tax expense1,157,604 1,465,388 2,214,496 2,433,649 
Income tax expense(221,419)(307,124)(400,793)(568,717)
Profit for the period936,185 1,158,264 1,813,703 1,864,932 
Attributable to:
Owners of the parent799,270 1,022,108 1,574,891 1,625,036 
Non-controlling interest136,915 136,156 238,812 239,896 
Profit for the period936,185 1,158,264 1,813,703 1,864,932 
Weighted average number of shares outstanding1,963,076,7761,963,076,776 1,963,076,776 1,963,076,776 
Basic and diluted earnings per share for profit attributable to the equity holders of the company (expressed in $ per share)0.41 0.52 0.80 0.83 

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2021.
Page 2 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021
(All amounts in $ thousands)







Consolidated Condensed Interim Statements of Comprehensive Income
Three-month period ended
June 30, 		Six-month period ended
June 30,
2022202120222021
(Unaudited)(Unaudited)
Profit for the period936,1851,158,264 1,813,703 1,864,932 
Items that may be reclassified subsequently to profit or loss:
Currency translation adjustment10 632 562 129 
Currency translation adjustment from participation in non-consolidated companies(84,417)68,619 42,311 29,908 
Changes in the fair value of financial instruments at fair value through other comprehensive income(11,595)6,084 (39,588)(14,641)
Income tax related to financial instruments at fair value3,913 335 13,496 5,269 
Changes in the fair value of derivatives classified as cash flow hedges23 75 55 159 
Income tax related to cash flow hedges(7)(23)(17)(48)
Other comprehensive income items from participation in non-consolidated companies106 3 205 36 
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of post employment benefit obligations(656)48,905 (3,042)48,719 
Income tax relating to remeasurement of post employment benefit obligations314 (14,403)1,025 (14,386)
Remeasurement of post employment benefit obligations from participation in non-consolidated companies(1,559)(1,024)(1,930)(2,470)
Other comprehensive income (loss) for the period, net of tax(93,868)109,203 13,077 52,675 
Total comprehensive income for the period 842,317 1,267,467 1,826,780 1,917,607 
Attributable to:
Owners of the parent714,115 1,120,483 1,594,843 1,675,668 
Non-controlling interest128,202 146,984 231,937 241,939 
Total comprehensive income for the period 842,317 1,267,467 1,826,780 1,917,607 

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2021.
Page 3 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021
(All amounts in $ thousands)







Consolidated Condensed Interim Statements of Financial Position
Balances as of
NotesJune 30, 2022December 31, 2021
(Unaudited)
ASSETS
Non-current assets
Property, plant and equipment, net76,407,596 6,431,578 
Intangible assets, net8915,585 902,256 
Investments in non-consolidated companies9899,075 751,475 
Other investments70,484 67,277 
Deferred tax assets222,332 160,745 
Receivables, net226,457 177,803 
Trade receivables, net— 8,741,529 229 8,491,363 
Current assets
Receivables, net463,857 357,705 
Derivative financial instruments7,401 4,353 
Inventories, net4,540,431 3,908,305 
Trade receivables, net1,976,150 1,767,196 
Other investments1,340,082 1,290,459 
Cash and cash equivalents719,149 9,047,070 1,276,605 8,604,623 
Non-current assets classified as held for sale1,895 1,921 
9,048,965 8,606,544 
Total Assets  17,790,494   17,097,907 
    
EQUITY     
Capital and reserves attributable to the owners of the parent  11,776,285   10,535,019 
Non-controlling interest  1,927,963   1,700,019 
Total Equity 13,704,248 12,235,038 
LIABILITIES
Non-current liabilities    
Provisions84,350   83,299 
Deferred tax liabilities128,357   186,216 
Other liabilities541,296   506,886 
Trade payables 1,058 989 
Lease liabilities208,321 215,250 
Borrowings538,461 1,501,843 656,465 1,649,105 
Current liabilities
Current income tax liabilities58,320 873,759 
Other liabilities 363,838 345,123 
Trade payables 1,564,479 1,126,049 
Derivative financial instruments450 1,889 
Lease liabilities46,504 44,371 
Borrowings 550,812 2,584,403 822,573 3,213,764 
Total Liabilities 4,086,246   4,862,869 
  
Total Equity and Liabilities17,790,494   17,097,907 
The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2021.

Page 4 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021
(All amounts in $ thousands)
Consolidated Condensed Interim Statements of Changes in Equity
Attributable to the owners of the parent (1)
Capital stock
(2)		Treasury shares
(2)		Initial public offering expensesReserves
(3) 		Capital stock issue discount
(4)		Currency translation adjustmentRetained earningsTotalNon-controlling interestTotal Equity
Balance as of January 1, 20222,004,743 (150,000)(23,295)1,360,637 (2,324,866)(2,898,593)12,566,393 10,535,019 1,700,019 12,235,038 
Profit for the period1,574,891 1,574,891 238,812 1,813,703 
Other comprehensive income (loss) for the period
Currency translation adjustment39,807 39,807 3,066 42,873 
Remeasurement of post employment benefit obligations(3,370)(3,370)(577)(3,947)
Cash flow hedges and others, net of tax19 19 19 38 
Others (5)(16,504)(16,504)(9,383)(25,887)
Total comprehensive income (loss) for the period— — — (19,855)— 39,807 1,574,891 1,594,843 231,937 1,826,780 
Dividends paid in cash (6)(353,354)(353,354)— (353,354)
Acquisition of non-controlling interest (7)(223)(223)(3,993)(4,216)
Balance as of June 30, 2022 (unaudited)2,004,743 (150,000)(23,295)1,340,559 (2,324,866)(2,858,786)13,787,930 11,776,285 1,927,963 13,704,248 

(1) Shareholders’ equity is determined in accordance with accounting principles generally accepted in Luxembourg.
(2) The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $ 1.00 per share. As of June 30, 2022, there were 2,004,743,442 shares issued. All issued shares are fully paid. Also, as of June 30, 2022, the Company held 41,666,666 shares as treasury shares.
(3) Includes legal reserve under Luxembourg law for $ 200.5 million, undistributable reserves under Luxembourg law for $ 1.4 billion and reserves related to the acquisition of non-controlling interest in subsidiaries for $ (72.4) million.
(4) Represents the difference between book value of non-monetary contributions received from shareholders under Luxembourg GAAP and IFRS.
(5) Includes mainly the changes of the fair value of financial instruments at fair value through other comprehensive income, net of tax.
(6) See note 10.
(7) Corresponds to the acquisition of non-controlling interest participation of Ternium Argentina S.A..

Dividends may be paid by Ternium to the extent distributable retained earnings calculated in accordance with Luxembourg law and regulations exist. Therefore, retained earnings included in these consolidated condensed interim financial statements may not be wholly distributable.
The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2021.
Page 5 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021
(All amounts in $ thousands)
Consolidated Condensed Interim Statements of Changes in Equity
Attributable to the owners of the parent (1)
Capital stock
(2)		Treasury shares
(2)		Initial public offering expensesReserves
(3) 		Capital stock issue discount
(4)		Currency translation adjustmentRetained earningsTotalNon-controlling interestTotal Equity
Balance as of January 1, 20212,004,743 (150,000)(23,295)1,329,945 (2,324,866)(2,861,029)9,310,617 7,286,115 1,157,038 8,443,153 
Profit for the period1,625,036 1,625,036 239,896 1,864,932 
Other comprehensive income (loss) for the period
Currency translation adjustment27,980 27,980 2,057 30,037 
Remeasurement of post employment benefit obligations28,483 28,483 3,380 31,863 
Cash flow hedges, net of tax56 56 55 111 
Others(5,887)(5,887)(3,449)(9,336)
Total comprehensive income (loss) for the period— — — 22,652 — 27,980 1,625,036 1,675,668 241,939 1,917,607 
Dividends paid in cash(412,246)(412,246)— (412,246)
Acquisition of non-controlling interest (5)11 11 (768)(757)
Balance as of June 30, 2021 (unaudited)2,004,743 (150,000)(23,295)1,352,608 (2,324,866)(2,833,049)10,523,407 8,549,548 1,398,209 9,947,757 
(1) Shareholders’ equity is determined in accordance with accounting principles generally accepted in Luxembourg.
(2) The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $ 1.00 per share. As of June 30, 2021, there were 2,004,743,442 shares issued. All issued shares are fully paid. Also, as of June 30, 2021, the Company held 41,666,666 shares as treasury shares.
(3) Include legal reserve under Luxembourg law for $ 200.5 million, undistributable reserves under Luxembourg law for $ 1.4 billion, and reserves related to the acquisition of non-controlling interest in subsidiaries for $ (72.2) million.
(4) Represents the difference between book value of non-monetary contributions received from shareholders under Luxembourg GAAP and IFRS.
(5) Corresponds to the acquisition of non-controlling interest participation of Ternium Argentina S.A..

Dividends may be paid by Ternium to the extent distributable retained earnings calculated in accordance with Luxembourg law and regulations exist. Therefore, retained earnings included in these consolidated condensed interim financial statements may not be wholly distributable.
The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2021.
Page 6 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021
(All amounts in $ thousands)

Consolidated Condensed Interim Statements of Cash Flows
Six-month period ended
June 30,
Notes20222021
(Unaudited)
Cash flows from operating activities
Profit for the period1,813,703 1,864,932 
Adjustments for:
Depreciation and amortization 7 & 8302,894 300,379 
Income tax accruals less payments (1,084,086)197,485 
Equity in earnings of non-consolidated companies9(108,022)(217,573)
Interest accruals less payments 3,989 2,096 
Changes in provisions(1,732)6,048 
Changes in working capital (1)(349,988)(1,317,992)
Net foreign exchange results and others 110,265 120,872 
Net cash provided by operating activities687,023 956,247 
Cash flows from investing activities
Capital expenditures 7 & 8(285,633)(291,133)
(Increase) Decrease in other investments(195,251)173,335 
Proceeds from the sale of property, plant and equipment 794 1,017 
Dividends received from non-consolidated companies28,884 499 
Acquisition of non-controlling interest(4,216)(757)
Net cash (used in) provided by investing activities(455,422)(117,039)
Cash flows from financing activities
Dividends paid in cash to company’s shareholders(353,354)(412,246)
Finance lease payments(24,892)(22,417)
Proceeds from borrowings153,590 132,023 
Repayments of borrowings(541,498)(279,137)
Net cash used in financing activities(766,154)(581,777)
(Decrease) Increase in cash and cash equivalents(534,553)257,431 
Movement in cash and cash equivalents
At January 1, 1,276,605 537,882 
Effect of exchange rate changes(22,903)(26,622)
(Decrease) Increase in cash and cash equivalents(534,553)257,431 
Cash and cash equivalents as of March 31, (2)719,149 768,691 
Non-cash transactions:
Acquisition of PP&E under lease contract agreements5,769 5,658 

(1) The working capital is impacted by non-cash movements of $ 10.8 million as of June 30, 2022 ($ 5.8 million as of June 30, 2021) due to the variations in the exchange rates used by subsidiaries.

(2) It includes restricted cash of $ 55 and $ 132 as of June 30, 2022 and 2021, respectively. In addition, the Company had other investments with a maturity of more than three months for $ 1,410,314 and $ 616,005 as of June 30, 2022 and 2021, respectively.

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2021.


Page 7 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021

Notes to the Consolidated Condensed Interim Financial Statements

1.GENERAL INFORMATION AND BASIS OF PRESENTATION

Ternium S.A. (the “Company” or “Ternium”), was incorporated on December 22, 2003 to hold investments in flat and long steel manufacturing and distributing companies.  The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $ 1.00 per share. As of June 30, 2022, there were 2,004,743,442 shares issued. All issued shares are fully paid.

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

The name and percentage of ownership of subsidiaries that have been included in consolidation in these Consolidated Condensed Interim Financial Statements are disclosed in Note 2 to the audited Consolidated Financial Statements for the year ended December 31, 2021.

The preparation of Consolidated Condensed Interim Financial Statements requires management to make estimates and assumptions that might affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the statement of financial position, and also the reported amounts of revenues and expenses for the reported periods. Actual results may differ from these estimates. The main assumptions and estimates were disclosed in the Consolidated Financial Statements for the year ended December 31, 2021, without significant changes since its publication.

2.    ACCOUNTING POLICIES

These Consolidated Condensed Interim Financial Statements have been prepared in accordance with IAS 34, “Interim Financial Reporting” and are unaudited. These Consolidated Condensed Interim Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2021, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and in conformity with International Financial Reporting Standards as adopted by the European Union (“EU”). Recently issued accounting pronouncements were applied by the Company as from their respective dates.

These Consolidated Condensed Interim Financial Statements have been prepared following the same accounting policies used in the preparation of the audited Consolidated Financial Statements for the year ended December 31, 2021.

None of the accounting pronouncements issued after December 31, 2021, and as of the date of these Consolidated Condensed Interim Financial Statements have a material effect on the Company’s financial condition or result or operations.

3.    SEGMENT INFORMATION

OPERATING SEGMENTS

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

The Steel segment includes the sales of steel products, which comprises slabs, hot rolled coils and sheets, cold rolled coils and sheets, tin plate, welded pipes, hot dipped galvanized and electro-galvanized sheets, pre-painted sheets, billets (steel in its basic, semi-finished state), wire rod and bars and other tailor-made products to serve its customers’ requirements. It also includes the sales of energy.

Page 8 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021


3.    SEGMENT INFORMATION (continued)

The Steel segment comprises four operating segments: Mexico, Southern Region, Brazil and Other markets. These four segments have been aggregated considering the economic characteristics and financial effects of each business activity in which the entity engages; the related economic environment in which it operates; the type or class of customer for the products; the nature of the products; and the production processes. The Mexico operating segment comprises the Company’s businesses in Mexico. The Southern region operating segment manages the businesses in Argentina, Paraguay, Chile, Bolivia and Uruguay. The Brazil operating segment includes the business generated in Brazil. The Other markets operating segment includes businesses mainly in United States, Colombia, Guatemala and Germany.

The Mining segment includes the sales of mining products, mainly iron ore and pellets, and comprises the mining activities of Las Encinas, an iron ore mining company in which Ternium holds a 100% equity interest and the 50% of the operations and results performed by Peña Colorada, another iron ore mining company in which Ternium maintains that same percentage over its equity interest. Both mining operations are located in Mexico. For Peña Colorada, the Company recognizes its assets, liabilities, revenue and expenses in relation to its interest in the joint operation.

Most information on segment assets is not disclosed as it is not reviewed by the CEO.

Six-month period ended June 30, 2022 (Unaudited)
SteelMiningInter-segment eliminationsTotal
IFRS
Net sales8,742,442 213,553 (213,490)8,742,505 
Cost of sales(6,055,811)(178,575)191,293 (6,043,093)
Gross profit2,686,631 34,978 (22,197)2,699,412 
Selling, general and administrative expenses (571,531)(20,216)— (591,747)
Other operating income (loss), net 23,148 (646)— 22,502 
Operating income2,138,248 14,116 (22,197)2,130,167 
Depreciation and amortization(260,608)(42,286)— (302,894)

Six-month period ended June 30, 2021 (Unaudited)
SteelMiningInter-segment eliminationsTotal
IFRS
Net sales7,148,721 235,839 (215,500)7,169,060 
Cost of sales(4,609,708)(152,711)208,476 (4,553,943)
Gross profit2,539,013 83,128 (7,024)2,615,117 
Selling, general and administrative expenses (445,310)(9,588)— (454,898)
Other operating income, net 16,732 263 — 16,995 
Operating income2,110,435 73,803 (7,024)2,177,214 
Depreciation and amortization(269,238)(31,141)— (300,379)


Page 9 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021


3.    SEGMENT INFORMATION (continued)

GEOGRAPHICAL INFORMATION

The Company had revenues attributable to the Company’s country of incorporation (Luxembourg) related to a contract acquired as a part of the acquisition of the participation in Ternium Brasil Ltda until December 31, 2021. As of December 31, 2021, this contract has been fully amortized and will not generate revenues in the following periods.

For purposes of reporting geographical information, net sales are allocated based on the customer’s location. Allocation of non-current assets is based on the geographical location of the underlying assets.

Six-month period ended June 30, 2022 (Unaudited)
MexicoSouthern regionBrazil and other marketsTotal
Net sales 4,779,293 1,892,019 2,071,193 8,742,505 
Non-current assets (1)4,767,553 860,474 1,695,154 7,323,181 
Six-month period ended June 30, 2021 (Unaudited)
MexicoSouthern regionBrazil and other marketsTotal
Net sales 4,149,753 1,492,886 1,526,421 7,169,060 
Non-current assets (1)4,781,947 891,284 1,716,999 7,390,230 
(1) Includes Property, plant and equipment and Intangible assets.
    
4.COST OF SALES
Six-month period ended
June 30,
20222021
(Unaudited)
Inventories at the beginning of the year3,908,305 2,001,781 
Plus: Charges for the period
Raw materials and consumables used and
other movements		5,504,178 4,550,452 
Services and fees86,242 73,614 
Labor cost477,049 334,761 
Depreciation of property, plant and equipment263,829 256,011 
Amortization of intangible assets19,591 10,545 
Maintenance expenses310,841 271,337 
Office expenses4,503 3,625 
Insurance7,692 5,785 
Change of obsolescence allowance12,140 (901)
Recovery from sales of scrap and by-products(21,213)(16,397)
Others10,367 8,573 
Less: Inventories at the end of the period(4,540,431)(2,945,243)
Cost of Sales6,043,093 4,553,943 

Page 10 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021


5.SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Six-month period ended
June 30,
20222021
(Unaudited)
Services and fees37,09129,938
Labor cost160,898130,525
Depreciation of property, plant and equipment6,7837,656
Amortization of intangible assets12,69126,167
Maintenance and expenses4,6343,635
Taxes85,18374,171
Office expenses20,48515,040
Freight and transportation260,347157,995
Increase of allowance for doubtful accounts486 (132)
Others3,1499,903
Selling, general and administrative expenses  591,747 454,898 

6.FINANCE EXPENSE, FINANCE INCOME AND OTHER FINANCIAL INCOME (EXPENSES), NET
Six-month period ended
June 30,
20222021
(Unaudited)
Interest expense(13,935)(14,024)
Finance expense(13,935)(14,024)
Interest income39,953 34,769 
Finance income39,953 34,769 
Net foreign exchange loss(118,359)(30,219)
Change in fair value of financial assets80,663 26,566 
Derivative contract results(1,801)4,636 
Others(10,214)17,134 
Other financial (expenses) income, net (49,711)18,117 

7.    PROPERTY, PLANT AND EQUIPMENT, NET
Six-month period ended
June 30,
20222021
(Unaudited)
At the beginning of the year6,431,578 6,504,681 
Currency translation differences282 69 
Additions245,665 262,672 
Value adjustments of lease contracts15,919 3,830 
Disposals(13,446)(16,380)
Depreciation charge(270,612)(263,667)
Capitalized borrowing costs403 4,873 
Transfers and reclassifications(2,193)(1,796)
At the end of the period6,407,596 6,494,282 
Page 11 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021


8.    INTANGIBLE ASSETS, NET
 Six-month period ended
June 30,
20222021
(Unaudited)
At the beginning of the year902,256 908,583 
Additions43,418 34,119 
Amortization charge(32,282)(36,712)
Transfers/Disposals2,193 (10,042)
At the end of the period915,585 895,948 


9.INVESTMENTS IN NON-CONSOLIDATED COMPANIES

CompanyCountry of incorporationMain activityVoting rights as ofValue as of
June 30, 2022December 31, 2021June 30, 2022December 31, 2021
Usinas Siderurgicas de Minas Gerais S.A. - USIMINASBrazilManufacturing and selling of steel products34.39%34.39%816,609681,711
Techgen S.A. de C.V.MexicoProvision of electric power48.00%48.00%77,58264,140
Other non-consolidated companies (1)4,8845,624
899,075751,475
(1) It includes the investments held in Finma S.A.I.F., Recrotek S.R.L. de C.V. and Gas Industrial de Monterrey S.A. de C.V.

Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS

As of June 30, 2022, Ternium, through its subsidiaries, owns a total of 242.6 million ordinary shares and 8.5 million preferred shares, representing 20.4% of the issued and outstanding share capital of Usinas Siderurgicas de Minas Gerais S.A. – USIMINAS (“Usiminas”), one of the main producers of flat steel products in Brazil for the energy, automotive and other industries.

Ternium, through its subsidiaries, together with Tenaris S.A.’s Brazilian subsidiary Confab Industrial S.A. (“TenarisConfab”), are part of Usiminas’ control group, comprising the so-called T/T Group. As of June 30, 2022, the Usiminas control group holds, in the aggregate, 483.6 million ordinary shares bound to the Usiminas shareholders’ agreement, representing approximately 68.6% of Usiminas’ voting capital. The Usiminas control group, which is bound by a long-term shareholders’ agreement that governs the rights and obligations of Usiminas’ control group members, is currently composed of three sub-groups: the T/T Group; the NSC Group, comprising Nippon Steel Corporation (“NSC”), Metal One Corporation and Mitsubishi Corporation; and Usiminas’ pension fund Previdência Usiminas. The T/T Group holds approximately 47.1% of the total shares held by the control group (39.5% corresponding to the Ternium entities and the other 7.6% corresponding to TenarisConfab); the NSC Group holds approximately 45.9% of the total shares held by the control group; and Previdência Usiminas holds the remaining 7%.

Page 12 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021


9.INVESTMENTS IN NON-CONSOLIDATED COMPANIES (continued)

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

As of June 30, 2022, the closing price of the Usiminas ordinary and preferred shares, as quoted on the BM&F Bovespa Stock Exchange, was BRL 8.21 (approximately $ 1.57; December 31, 2021: BRL 14.51 – $ 2.60) per ordinary share and BRL 8.65 (approximately $ 1.65; December 31, 2021: BRL 15.16 – $ 2.72) per preferred share, respectively. Accordingly, as of June 30, 2022, Ternium’s ownership stake had a market value of approximately $ 394.3 million ($ 653.9 million as of December 31, 2021) and a carrying value of $ 816.6 million ($ 681.7 million as of December 31, 2021).

Considering that the market value of Usiminas was below the book value as of June 30, 2022, the Company decided to assess the recoverability of its investment in Usiminas as of such date, resulting in no impairment charges to be recognized. As of June 30, 2022, the discount rate used to test the investment in Usiminas for impairment was 12.39%.

As of June 30, 2022, the value of the investment in Usiminas is comprised as follows:

Value of investmentUSIMINAS
As of January 1, 2022681,711 
Share of results (1)94,564 
Other comprehensive income (2)40,334 
As of June 30, 2022816,609 
(1) It includes the adjustment of the values associated to the purchase price allocation.
(2) It includes mainly the effect of the currency translation adjustment.

The investment in Usiminas is based on the following calculation:

Usiminas' shareholders' equity4,541,548 
Percentage of interest of the Company over shareholders' equity20.40 %
Interest of the Company over shareholders' equity925,699 
Purchase price allocation58,367 
Goodwill198,441 
Impairment(365,898)
Total Investment in Usiminas816,609 

On July 29, 2022, Usiminas issued its consolidated interim accounts as of and for the six-month period ended June 30, 2022.

Page 13 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021

9.     INVESTMENTS IN NON-CONSOLIDATED COMPANIES (continued)

USIMINAS
Summarized balance sheet (in million $)As of June 30, 2022
Assets
Non-current3,771 
Current3,042 
Other current investments205 
Cash and cash equivalents863 
Total Assets7,881 
Liabilities
Non-current538 
Non-current borrowings1,122 
Current1,138 
Current borrowings33 
Total Liabilities2,831 
Non-controlling interest508 
Shareholders' equity4,542 
USIMINAS
Summarized income statement (in million $)Six-month period ended
June 30, 2022
Net sales3,232 
Cost of sales(2,460)
Gross Profit772 
Selling, general and administrative expenses(127)
Other operating income (loss), net(60)
Operating income585 
Financial income (expenses), net45 
Equity in earnings of associated companies18 
Profit before income tax648 
Income tax expense(192)
Net profit before non-controlling interest456 
Non-controlling interest in other subsidiaries(48)
Net profit for the period408 

Techgen S.A. de C.V.

Techgen stated as of and for the six-month period ended June 30, 2022, that revenues amounted to $ 275 million ($ 419 million for the year ended December 31, 2021), net profit from continuing operations to $ 28 million ($45 million for the year ended December 31, 2021), non-current assets to $ 780 million ($ 791 million as of December 31, 2021), current assets to $ 118 million ($ 91 million as of December 31, 2021), non-current liabilities to $ 564 million ($ 614 million as of December 31, 2021), current liabilities to $ 171 million ($ 134 million as of December 31, 2021) and shareholders’ equity to $ 162 million ($ 134 million as of December 31, 2021).


Page 14 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021


10.     DISTRIBUTION OF DIVIDENDS

During the annual shareholders’ meeting held on May 3, 2022, the shareholders approved a distribution of dividends of USD 0.26 per share (USD 2.60 per ADS). The annual dividend included the interim dividend of $0.08 per share ($0.80 per ADS) paid in November 2021. A net dividend of $0.18 per share ($1.80 per ADS) was paid on May 11, 2022, or approximately USD 360.9 million in the aggregate.


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

Contingencies, commitments and restrictions on the distributions of profits should be read in Note 24 to the Company’s audited Consolidated Financial Statements for the year ended December 31, 2021.

(i) Tax claims and other contingencies

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

On September 23, 2013, the first instance court dismissed the CSN lawsuit, and on February 8, 2017, the court of appeals of São Paulo maintained the understanding of the first instance court. On March 6, 2017, CSN filed a motion for clarification against the decision of the court of appeals, which was rejected on July 19, 2017. On August 18, 2017, CSN filed with the court of appeals an appeal seeking the review and reversal of the decision issued by the court of appeals by the Superior Court of Justice. On March 5, 2018, the court of appeals ruled that CSN’s appeal did not meet the requirements for review by the Superior Court of Justice and rejected such appeal. On May 8, 2018, CSN appealed against such ruling and on January 22, 2019, the court of appeals rejected such appeal and ordered that the case be submitted to the Superior Court of Justice. On September 10, 2019, the Superior Court of Justice declared CSN’s appeal admissible. The Superior Court of Justice will review the case and will then render a decision on the merits. The Superior Court of Justice is restricted to the analysis of alleged violations to federal laws and cannot assess matters of fact.

Ternium continues to believe that all of CSN’s claims and allegations are groundless and without merit, as confirmed by several opinions of Brazilian legal counsel, two decisions issued by the Brazilian securities regulator (CVM) in February 2012 and December 2016, and the first and second instance court decisions referred to above. Accordingly, no provision has been recorded in these Consolidated Condensed Interim Financial Statements.



Page 15 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021


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

Shareholder claims relating to the October 2014 acquisition of Usiminas shares
On April 14, 2015, the staff of the CVM, determined that an acquisition of additional ordinary shares of Usiminas by Ternium Investments made in October 2014, triggered a requirement under applicable Brazilian laws and regulations for Usiminas’ controlling shareholders to launch a tender offer to all non-controlling holders of Usiminas ordinary shares. The CVM staff’s determination was made further to a request by NSSMC and its affiliates, who alleged that Ternium’s 2014 acquisition had exceeded a threshold that triggers the tender offer requirement. In the CVM staff’s view, the 2014 acquisition exceeded the applicable threshold by 5.2 million shares. On April 29, 2015, Ternium filed an appeal to be submitted to the CVM’s Board of Commissioners. On May 5, 2015, the CVM staff confirmed that the appeal would be submitted to the Board of Commissioners and that the effects of the staff’s decision would be stayed until such Board rules on the matter.

On June 15, 2015, upon an appeal filed by NSSMC, the CVM staff changed its earlier decision and stated that the obligation to launch a tender offer would fall exclusively on Ternium. Ternium’s appeal has been submitted to the CVM’s Board of Commissioners which has no set timeframe to resolve on the matter. In addition, on April 18, 2018, Ternium filed a petition with the CVM’s reporting Commissioner requesting that the applicable threshold for the tender offer requirement be recalculated taking into account the new ordinary shares issued by Usiminas in connection with its 2016 BRL 1 billion capital increase and that, in light of the replenishment of the threshold that would result from such recalculation, the CVM staff’s 2015 determination be set aside. In the event the appeal is not successful, under applicable CVM rules Ternium may elect to sell to third parties the 5.2 million shares allegedly acquired in excess of the threshold, in which case no tender offer would be required.

(ii) Commitments

(a) In March 2022, Ternium Brasil S.A. entered into a contract with Unicarbo Ltda. for the supply of petcoke. This agreement is due to terminate on March 2023 and the outstanding amount was $ 162.9 million as of June 30, 2022. The contract has minimum monthly-required volumes.

(b) Ternium Argentina signed agreements to cover 80% of its required iron ore, pellets and iron ore fines volumes until December 31, 2024, for an estimated total amount of $ 1,099.2 million. Although they do not set a minimum amount or a minimum commitment to purchase a fixed volume, under certain circumstances a penalty is established for the party that fails of:
- 7% in case the annual operated volume is between 70% and 75% of the total volume of purchases of the Company; such percentage is applied over the difference between the actual purchased volume and the 80% of the total volume of purchases.
- 15% in case the annual operated volume is lower than 70% of the total volume of purchases of the Company; such percentage is applied over the difference between the actual purchased volume and the 80% of the total volume of purchases.



Page 16 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021


12.    RELATED PARTY TRANSACTIONS

As of June 30, 2022, Techint Holdings S.à r.l. (“Techint”) owned 62.02% of the Company’s share capital and Tenaris Investments S.à r.l. (“Tenaris”) held 11.46% of the Company’s share capital. Each of Techint and Tenaris were controlled by San Faustin S.A., a Luxembourg company (“San Faustin”). Rocca & Partners Stichting Administratiekantoor Aandelen San Faustin (“RP STAK”), a private foundation (Stichting) located in the Netherlands, held voting shares in San Faustin sufficient in number to control San Faustin. No person or group of persons controls RP STAK.
The following transactions were carried out with related parties:
Six-month period ended
June 30,
20222021
(Unaudited)
(i) Transactions
(a) Sales of goods and services
Sales of goods to non-consolidated parties374,962 452,296 
Sales of goods to other related parties110,500 91,607 
Sales of services and others to non-consolidated parties89 91 
Sales of services and others to other related parties2,136 606 
487,687 544,600 
(b) Purchases of goods and services
Purchases of goods from non-consolidated parties314,071 215,638 
Purchases of goods from other related parties36,560 32,280 
Purchases of services and others from non-consolidated parties6,477 4,145 
Purchases of services and others from other related parties39,594 47,515 
396,702 299,578 
(c) Financial results
Income with non-consolidated parties3,383 3,120 
Expenses in connection with lease contracts from other related parties (527)(526)
2,856 2,594 
(d) Dividends
Dividends from non-consolidated parties1,007 499 
1,007 499 
(e) Other income and expenses
Income (expenses), net with non-consolidated parties943 482 
Income (expenses), net with other related parties422 532 
1,365 1,014 
June 30, 2022December 31, 2021
(Unaudited)
(ii) Period-end balances
(a) Arising from sales/purchases of goods/services
Receivables from non-consolidated parties230,307 204,329 
Receivables from other related parties40,974 26,690 
Advances to non-consolidated parties6,971 5,383 
Advances to suppliers with other related parties2,780 3,852 
Payables to non-consolidated parties(73,737)(72,373)
Payables to other related parties(25,771)(16,617)
Lease Liabilities with other related parties(2,894)(2,635)
178,630 148,629 
Page 17 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021

13.    FINANCIAL INSTRUMENTS BY CATEGORY AND FAIR VALUE MEASUREMENT


1)Financial instruments by category

The accounting policies for financial instruments have been applied to the line items below. According to the scope and definitions set out in IFRS 7 and IAS 32, employers’ rights and obligations under employee benefit plans, and non-financial assets and liabilities such as advanced payments and income tax payables, are not included.
As of June 30, 2022 (in $ thousands)Amortized
cost		Assets at fair value through profit or lossAssets at fair value through OCITotal
(i) Assets as per statement of financial position
Receivables178,862 — — 178,862 
Derivative financial instruments— 7,401 — 7,401 
Trade receivables1,976,150 — — 1,976,150 
Other investments418,490 519,538 472,286 1,410,314 
Cash and cash equivalents572,265 136,642 10,242 719,149 
Total3,145,767 663,581 482,528 4,291,876 
As of June 30, 2022 (in $ thousands)Amortized
cost		Liabilities at fair value through profit or lossTotal
(ii) Liabilities as per statement of financial position
Other liabilities57,614 — 57,614 
Trade payables1,523,507 — 1,523,507 
Derivative financial instruments— 450 450 
Lease liabilities254,825 — 254,825 
Borrowings1,089,273 — 1,089,273 
Total2,925,219 450 2,925,669 

2)Fair Value by Hierarchy
IFRS 13 requires for financial instruments that are measured at fair value, a disclosure of fair value measurements by level. See note 28 of the Consolidated Financial Statements as of December 31, 2021 for definitions of levels of fair values and figures at that date.
The following table presents the assets and liabilities that are measured at fair value:
Fair value measurement as of June 30, 2022
(in $ thousands):
DescriptionTotalLevel 1Level 2Level 3
Financial assets at fair value through profit or loss / OCI
Cash and cash equivalents146,884 146,884 — — 
Other investments991,824 848,593 119,257 23,974 
Derivative financial instruments7,401 — 7,401 — 
Total assets1,146,109 995,477 126,658 23,974 
Financial liabilities at fair value through profit or loss / OCI
Derivative financial instruments450 — 450 — 
Total liabilities450 — 450 — 

Page 18 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021

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

Fair value measurement as of December 31, 2021
(in $ thousands):
DescriptionTotalLevel 1Level 2Level 3 (*)
Financial assets at fair value through profit or loss / OCI
Cash and cash equivalents692,529 692,529 — — 
Other investments735,654 668,056 39,777 27,821 
Derivative financial instruments4,353 — 4,353 — 
Total assets1,432,536 1,360,585 44,130 27,821 
Financial liabilities at fair value through profit or loss / OCI
Derivative financial instruments1,889 — 1,889 — 
Total liabilities1,889 — 1,889 — 
(*) The fair value of financial instruments classified as level 3 is not obtained from observable market information, but from measurements of the asset portfolio at market value provided by the fund manager. The evolution of such instruments during the year ended December 31, 2021, corresponds to the initial investment and to the changes in its fair value.

14.    FOREIGN EXCHANGE RESTRICTIONS IN ARGENTINA

Ternium’s Argentine subsidiary, Ternium Argentina S.A., is currently operating in a complex and volatile economic environment. Beginning in September 2019, the Argentine government has imposed and continues to impose significant restrictions on foreign exchange transactions. Restrictions have tightened significantly over time, including in recent weeks. Although as of the date of these financial statements these measures have not had a significant effect on Ternium Argentina’s ability to purchase U.S. dollars at the prevailing official exchange rate for most of its imports of goods and for the acquisition of services from unrelated parties, if such restrictions continue to be maintained, or are further tightened, Ternium Argentina could be restricted from making payment of imports for key steelmaking inputs (which would adversely affect its operations), or would need to resort to alternative, more expensive arrangements (which would adversely affect its results of operations). In addition, access to the Argentine foreign exchange market to distribute dividends or to pay royalties to related parties at the prevailing official exchange rate generally requires prior Argentine Central Bank approval, which is rarely, if ever, granted, thus limiting Ternium’s ability to collect dividends from Ternium Argentina at the prevailing official exchange rate.

Under Ternium Argentina’s interim accounts as of June 30, 2022, and for the six-month period then ended, revenues amounted to $ 1,885 million, net profit from continuing operations to $ 453 million, total assets to $ 5,551 million, total liabilities to $ 663 million and shareholders’ equity to $ 4,888 million.Ternium Argentina’s cash and cash equivalents and other investments amounted to $ 1.183 million as of June 30, 2022, broken down as follows:
–$ 516 million in Argentine pesos-denominated instruments with underlying assets linked to the U.S. dollar.
–$ 75 million in Argentine pesos-denominated instruments, mainly mutual funds ($ 62 million).
–$ 592 million in U.S. dollars-denominated instruments, mainly sovereign bonds issued by the Argentine Government and payable in U.S. dollars, Argentine Treasury bonds related to the official exchange rate and negotiable obligations and promissory notes issued by Argentine export driven companies in U.S. dollars and payable in Argentine pesos.

Ternium Argentina’s financial position in ARS as of June 30, 2022, amounted to $ 626 million in monetary assets and $ 203 million in monetary liabilities. All of Ternium Argentina’s ARS-denominated assets and liabilities are valued at the prevailing official exchange rate.
Page 19 of
TERNIUM S.A.
Consolidated Condensed Interim Financial Statements as of June 30, 2022
and for the six-month periods ended June 30, 2022 and 2021

14.    FOREIGN EXCHANGE RESTRICTIONS IN ARGENTINA (continued)

On July 29, 2022, the Board of Directors of Ternium Argentina approved the payment of a dividend in kind of $ 300 million in Argentine peso-denominated financial instruments. Considering the impact of foreign exchange restrictions in Argentina, as mentioned above, there would be a negative effect at the time those financial instruments are transferred to the controlling shareholder of Ternium Argentina.

15. THE RUSSIA-UKRAINE ARMED CONFLICT

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

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





Pablo Brizzio
Chief Financial Officer
Page 20 of
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