Good day, everyone, and welcome to the Ternium First Quarter 2012 Earnings Results Conference Call. At this time, I would like to turn the conference over to Mr. Sebastián Marti. Please go ahead, sir. Sebastián Marti: Good morning. Thank you for joining us today. My name is Sebastián Marti, and I am Ternium's Director of Investor Relations. Ternium issued a press release today detailing its results for the first quarter 2012. This call is complementary to that presentation. Joining me today is Ternium's CFO, Mr. Pablo Brizzio, who will discuss our performance. At the conclusion of our prepared remarks, we will open up the call to your questions. Before we begin, I would like to remind you that this conference call contains forward-looking information and that actual results may vary from those expressed or implied. Factors that could affect results are contained in our filings with the Securities and Exchange Commission and in our press release issued earlier today. With that, I'll turn the call over to Mr. Brizzio.

Thanks, Sebastián. Good morning. I would like to provide some comments on our performance in the first quarter 2012 and the outlook for the following quarter, and then we will be able to go to the Q&A session. But firstly, I would like to point out a change in accounting that was introduced from the first quarter of the year. Due to the changes in the primary economic environment in which Ternium's Mexico subsidiary operates and in accordance with International Financial Reporting Standards, we performed a functional currency review and concluded that the functional currency of Ternium's Mexican subsidiaries should change prospectively to the U.S. dollar effectively as of January 1, 2012. As a result, the operation -- the operations of the Mexican subsidiary have been and will be measured in U.S. dollars as opposed to being measured in Mexican pesos prior to the first quarter 2012. This will mostly affect the financial income expenses line and, consequently, the income tax line of Ternium consolidated income statement. Now moving to EBITDA. During the first quarter 2012, the EBITDA was $372 million, slightly higher than the EBITDA in the fourth quarter 2011. Shipments revenue per ton and cost per ton remained relatively stable. Shipments of flat products decreased 28,000 tons in the quarter compared to the fourth quarter 2011, with 6% higher shipments in the North American region and 10% lower shipment in the South and Central American region mainly due to seasonality. At the same time, flat product revenue per ton increased 2% in the North American region and decreased 1% in the South and Central American region. Shipments of long products across all our regions were 10% higher compared to the fourth quarter last year, and revenue per ton was 2% higher. Summarizing, total shipments were relatively stable. Flat…

[Operator Instructions] And our first question comes from Rodolfo De Angele from JPMorgan.

Just 2 questions. First of all, on Usiminas conference call yesterday, the company mentioned that they are basically looking to increase exports using the TX network. Could you give us some more details on how you see this going on? Do you have any idea of synergies and any type of where do -- should we expect to see the bulk of this coming in? And the second question is just I wanted to follow up on an issue that was discussed at the Investor Day, which was the charge of management fees, the possibility of charging management fees at Usiminas there; anything in those lines, any developments in that front? That's it.

Okay. Rodolfo, let me put your 2 questions together and give you a complete answer. First of all, there is no management fee in place at the moment. And as you know, as we discussed at length during the Investor Day, Ternium, together with Nippon Steel and Usiminas, are always looking for ways to maximize value in different ways. In the one way is the one that you mentioned, which is utilizing fully the capabilities of the different companies. As you know, Usiminas has a very well-developed and very strong commercial network throughout Brazil, and Ternium has a very strong commercial network distributed throughout Latin America, but of course not in Brazil. So this could help. And as we mentioned that already, Usiminas mentioned this in the conference call, the idea they have is to increase the export, utilizing the capabilities of Ternium. So this is something that we have commented a lot. This is something that we expected to happen from the very beginning because this is extremely good for both parties, to develop this and to increase the availability of product in the different markets in which we are and if there is possibilities to utilize, of course, the network of Usiminas to do the same thing in Brazil. So this is underway, and we are always looking for ways to increase value for the different companies and this is an example. Another example, if you want, that I can give you is that, as we also mentioned in the Investor Day, Usiminas has already joined the platform of Exiros to take advantage of the possibilities that this platform gives. And of course, we believe that Ternium also will benefit from having an increased pool of purchases that the different companies will need to do through these instruments. So as I said at the very beginning, we are working and we will continue to work in order to find different ways of increasing value, both for Usiminas and for the shareholders of the company.

Our next question comes from Marcos Assumpção from Itaú BBA. Marcos Assumpção: My first question is if you could comment a little bit about your cost performance in the first quarter. Basically, the raw materials, I think it surprised a little bit to the upside. And also, how do you see the cost evolving in the second quarter? And the second one would be also on the market, but on the price outlook for the second quarter as well. How do you see the slab -- the difference between HRC and slab prices going forward?

Okay. Marcos, let me first go through the issue of cost. Yes, we are expecting a somewhat higher cost per ton in this quarter, especially in Argentina. But at the very end, the cost was sustained basically at similar level as what we see -- as what we saw last quarter. We are not expecting much movement either on pricing or in cost structure in the next quarter, though we are seeing some decreases in raw material inputs, especially slabs or, in some cases, coal or iron ore. And as you know, in our financials, they will have some delay to be reflected. We are not seeing much differences in the price or the difference between the price of the copper coil and slab. It is around what typically used to be in the last couple of quarters or traditionally, these are the level which is $150 per ton. In relationship to our expectation for prices, we already mentioned that we are not expecting to see much movement in prices in the next quarter. You know that we have been seeing some movement -- slight movements in prices in the U.S., which is, for us, the main reference, some upward and downward movements, but in most cases were not that significant, so minor movement. And our expectation is to continue to see this at least during the second quarter. Marcos Assumpção: All right, Pablo. Just a follow-up here. Do you believe that the visibility on U.S. demand and North America demand has improved recently? Or it seems to be kind of the same as in the last quarter?

Well, we are -- we're -- what we are seeing is, especially in North America, a relatively good situation in respect to the economic situation and demand and especially in Mexico. As we said already in our outlook, we are expecting somewhat increase in demand from -- for our products. Again, not major movements, but we are somewhat positive in North America and, of course, especially in Mexico.

Our next question comes from Felipe Hirai from Bank of America.

I have 2 questions. The first one is related to the fact that you mentioned that you expect to see some better improvements in the operating -- your operations in the second quarter. You mentioned about cost and about volumes. Could you quantify a little bit on what you expect to see in terms of margins in the second quarter and also in 2012? And my second question is related to the political environment in Argentina. We saw that -- what happened in YPF. I just wanted to get your thoughts on how do you think that -- what could be the implications to your operations in the country?

Hey, Felipe, no problem. First of all, we are not expecting to see much movement in our cost line in the next quarter, as we said, because we are not seeing much differences in the different raw material costs that are reflected in our financials. Probably moving into the rest of the year, it seems we -- as I mentioned, we have seen some reduction in some cost. This we should -- this should be reflected in the following quarter. In any event, we are not seeing any major movements, nor in price nor in cost. That's why what we are saying is that we are expecting to have a relatively stable level of operating income and -- in the whole region, but in Mexico probably due to some specific cost reductions like the reduction that we have mentioned in slab. We could see some small reduction in total cost. And that's why we are saying that we are seeing slightly higher operating income during the second quarter. Moving to Argentina, what we -- we, first of all, have no indication that something that similar to what happened in Argentina to YPF could be -- could happen to Siderar. Furthermore, as you know, starting last week on Thursday, Siderar has the annual shareholders meeting in which unanimously approved a dividend payment of $40 million. So we are working as usual in Argentina. And as we said in the different public communication that we have, we are expecting to see a similar level of activity in total coming out from Siderar, especially in the export market.

Our next question comes from Carlos de Alba from Morgan Stanley.

I wanted to ask you if you can give us an update on the CapEx for the year. It did not accelerate much in the first quarter. And I guess, considering what you are doing in Mexico particularly, would you see a ramp-up in the coming quarters? And also, if you can comment about the level of slabs that you are buying from third parties and re-rolling in Mexico. And finally, any comments on the Sidor situation? I mean, in the last press release, you mentioned that there was -- they had not paid the last installment and there were a total principal amount of around $130 million outstanding. Any updates -- or any update on that?

Okay, Carlos. Regarding the issue of CapEx, you are right, but we are still having the same expectation for CapEx that we commented in last -- the last conference call or even the Investor Day. We are expecting to have a total CapEx for the year close to $1 billion. And we are -- as we always said, we are advancing extremely well with our project in Mexico, so probably you will see some ramp-up in CapEx coming in the next couple of quarters. We are not only developing this CapEx plan in Mexico. As we also already commented in different opportunities, we are expecting to have also investment coming out of Siderar in Argentina. So, in total, we are expecting to have close to $750 million from North America and $250 million coming from South America -- South and Central America region. So yes, we are still moving with these numbers. In relationship to slabs, the latest acquisition of slabs from third parties is at prices which are a level of close to $600 per ton. So that's the reason why we are mentioning that in the following quarters, this should be reflecting in our numbers and cost should reflect this decrease from prices that we have seen in the prior quarters. In relationship to your question of Sidor, we haven't yet been paid. We are still in negotiations to solve this issue.

Our next question comes from Leonardo Correa from Barclays.

I have 2 questions on the Açu project. Well, starting out, you know Usiminas, yesterday, during the call, they basically stated they were not analyzing any potential Açu [ph] projects. So I just wanted to understand if there are any conversations with potential partners for the Açu project underway. That's my first question. And the second one is regarding the availability of natural gas in the region for the project. I mean, how -- just wanted to understand if you have any recent developments on natural gas in the region and how confident you are that you can secure cheap natural gas for the project. Those are the 2 questions, please.

Okay, Leonardo. As we always said, we are still analyzing the feasibility of this project. You know that we have advanced quite a lot in this analysis. And we have presented in the last Investor Day, which are the outcome of all the analyses that we have made and which is the situation right now. So we mentioned that we could consider, if this project move ahead, to include partners to develop it. This is not to say that we have already formal conversations with any interested party in order to do that. What we know is that there should be interest in being part of this project, but we have -- we are not having any formal type of discussion with any party at this point of time. In relationship to your question on natural gas, you know that now for us is key, the availability of natural gas in order to develop it since we have moved from original idea of a blast furnace type of technology project to a DRI blast electric arc furnaces type of technology. So as you know, as you pointed out, this needs availability of natural gas, which is not yet there in Porto Açu. We understand and we believe and this is what we are analyzing and discussing that in the future, there will be the availability of natural gas, as you know, that not only Petrobras, but also some other companies are working to develop, especially offshore reserves of natural gas. So this is something that we need and we will continue to analyze in the near future. But this is a key point for this project.

Just want to follow up, a very one quick one. During the Ternium Investor Day, you mentioned that you had until September to decide whether the project will move ahead. Do you still confirm that date as a key date?

Yes, that's a key date. That's a date in which we need to decide what to do. Of course, you can always request for an extension. But up to today, the date is September this year.

Our next question comes from Rodrigo Barros from Deutsche Bank.

My first question is regarding listing in Brazil, which, in my opinion, makes a lot of sense to you because in our calculations, your stock trades at 4.4x of EBITDA and other Brazilian steel makers are trading about 7 when you adjust it for the mining stakes. So we do see a huge opportunity to list in Brazil to get a better valuation. I wonder if you shall ever analyze this and if you think this would make sense. And the second question is also in terms of Usiminas. If you can give us any color on the synergies after the Ternium Day, if you were able to get any further color on this for us.

Of course. Okay, Rodrigo. Regarding your first question, which is listing in some other markets, you are not the first one to mention this, and we understand that this is a possibility, an alternative. And we are -- we will and we are analyzing the possibility of having a listing in some other place. We have nothing new to comment regarding to this point. In relationship to your second question, which was -- I believe I already commented on during the question of Rodolfo, the very first question on this call, what we are doing at the moment and all the things that were commented yesterday in the conference call of Usiminas, the key issues to be comment. I have nothing else to add to that. If you want, I can briefly summarize what I said at the very beginning, but this is what we are working at the moment. Yes?

Yes. And maybe just one thing that I remember discussed with Ternium in the past is how long, in your opinion, would it take to get Usiminas to full capacity? I think we discussed in the past, maybe 2 or 3 years, but maybe in that point specifically, if you could add some color to us.

Well, I believe that this question was asked -- or should be asked to Usiminas directly. We already said and we still believe that Usiminas should work a lot in order to reach the level of production or the level of output that you are mentioning. We believe that this will take some time. Already, Usiminas is showing some increase in shipments, and the expectation that they have is to keep working on that front. We always said that the transformation of Usiminas will require some time. And we keep saying exactly the same and the expectation for us is the same one, around what you mentioned, 2 or 3 years, well, this is something that we continue to estimate. But here, looking at the result of yesterday's conference call, Usiminas is already working and commenting what they are doing in order to have a better performance at the level of Usiminas.

Our next question comes from Humberto Meireles [ph] from Goldman Sachs.

Just one follow-up question on the cost side. I was wondering if you could provide, how does the slab -- the average slab cost purchased in the first quarter 2012 compares with the fourth quarter 2011? And what was the variation of the average cost of slab purchase?

Okay. Yes, as we mentioned, we are seeing some reduction in the value of purchased slab. We are -- if you compare the first quarter this year, we were buying slab at prices that were over $600, between $620, -- between $600 and $620, and we are expecting to see a reduction on these prices for slab coming in during the second quarter of this year.

Okay. And in the fourth quarter 2011, what was the average purchase cost?

The average purchase cost during the fourth quarter was over $650 per ton.

Our next question comes from Verena Wachnitz from T. Rowe Price.

A quick question, just for me. Your other revenues were unusually low in this quarter; any reason for that? And should we expect them to recover going forward?

Excuse me, could you repeat because I couldn't hear you very well, Verena?

Yes. Well, sorry. Other -- the other revenues from other products were quite low in this quarter. I'm trying to get a sense of the -- yes?

Sorry, you're right. Yes, we -- yes, in fact, we have no sales during this first quarter due to the dip of iron ore, due to some issues that we have in our -- in the sites in which we operate that have been already sold. So we are expecting to pick up these sales from second quarter on.

Our next question comes from Santiago Perez Teuffer from GBM.

Most of my questions have been answered.

Our next question comes from Marcos Assumpção from Itaú BBA. Marcos Assumpção: One question on the Açu project on the fuel extension. What will be the level of natural gas price that is at breakeven for you to do the project? So what is the maximum level of natural gas price that you -- would allow you to build a profitable project in Brazil?

Well, we are not yet, at this point, to discuss the issues of relatively priced to -- for this project. First of all, we need to figure out if the availability and the quantity are there and then to analyze the full project. You know that we have already mentioned that we are changing technology, so we are going through this process of full analysis. Marcos Assumpção: Okay. And the second question is regarding the potential synergies between Usiminas and Ternium, the use of Exiros, the use of the distribution network in LatAm. When do you expect to negotiate that with Usiminas? Would it be in the next board meeting, which will be appointing all of the new directors?

Well, in respect to Exiros, Usiminas already approved the entrance on the platform of Exiros to work if it is convenient for them to work with Exiros. In respect to the other one that you mentioned, as already said at the very beginning, yes, we are working and should be -- we are working and expecting to have these analyzed and discussed in the near future.

Our next question is a follow-up from Rodolfo De Angele from JPMorgan.

I just wanted to explore a little bit more and confirm that I understood it right the question from a colleague on listing -- potential listing elsewhere or Brazil. Can you comment a little bit more on this? Is this something you're considering in Brazil or Mexico? How serious it is at this point? Just wanted to be -- to confirm and get a little more color, please.

Okay, thanks for the question because I believe it's important to clarify this issue. We are not, at the moment, moving to list our company in any other exchange. What I said is that we are analyzing this possibility, which is -- was already commented by you and by different persons within the investor community that is an alternative for Ternium. So we are analyzing, but we are not working at the moment to do any listing. So this is another possibility and an alternative that the company has, and we need to go through the process of internal analysis to see if this is the right move for the company.

Our next question is a follow-up from Carlos de Alba from Morgan Stanley.

Just to clarify a little bit the outlook. You did mention that you expect increase in shipments, particularly in North America, but could you give us a bit more detail on this? Is it more on the flat business or on the long business? In Q1, it was very strong numbers in terms of shipments in the long division. Is this where you expect to see the majority of the improvement that you quoted in the outlook? Or is there going to be a pickup in the flat business as well?

You are right that the shipments in the first quarter in the long product was important, a significant number. We are not expecting to see increase in shipments coming from long product, but what we are expecting to see is shipment increases coming from flat product.

Thank you. I show no further questions in the queue, and I would like to turn the conference back to Mr. Pablo Brizzio for closing remarks.

Thanks, and thank you again for your interest in Ternium and for your time today. We look forward to remain in touch with you. And as always, please contact us if you have any additional questions. Thanks a lot. Bye-bye.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may all disconnect at this time.