Ternium S.A. Form 6-K Summary: Six Months Ended June 30, 2026
Business Context and Reporting Period
This Form 6-K reports the unaudited consolidated condensed interim financial statements for Ternium S.A. for the six-month period ended June 30, 2026. Ternium is a global steel producer organized into two operating segments: Steel and Mining. The company operates primarily in Mexico, Brazil, and the Southern Cone region of South America. The reporting period reflects significant strategic developments, including the full consolidation of Usiminas and ongoing litigation regarding its acquisition.
Key Financial Metrics
| Metric (Six Months Ended June 30) | 2026 ($ thousands) | 2025 ($ thousands) |
|---|---|---|
| Net Sales | 8,274,253 | 7,879,747 |
| Gross Profit | 1,627,891 | 1,141,026 |
| Operating Income | 818,482 | 331,053 |
| Profit for the Period | 836,917 | 401,646 |
| Profit Attributable to Owners | 556,691 | 282,424 |
| Basic EPS ($) | 0.28 | 0.14 |
| Net Cash from Operating Activities | 473,125 | 1,250,672 |
| Cash and Cash Equivalents (End of Period) | 1,430,687 | 1,857,696 |
| Total Borrowings | 2,843,752 | 3,934,209 |
Note: All amounts in thousands of U.S. dollars unless otherwise stated.
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased by 5.0% to $8.27 billion, driven by higher volumes and pricing in the Steel segment, which generated $8.01 billion in external sales.
- Profitability Surge: Operating income more than doubled to $818.5 million (from $331.1 million), and net profit attributable to owners nearly doubled to $556.7 million. This was aided by a reduction in the provision for Usiminas litigation and improved operational margins.
- Debt Reduction: Total borrowings decreased significantly by approximately $1.09 billion to $2.84 billion, reflecting strong cash generation and strategic debt paydowns.
- Working Capital: Net cash provided by operating activities declined to $473.1 million from $1.25 billion in the prior year, primarily due to a $650.8 million outflow for changes in working capital compared to an inflow of $726.8 million in 2025.
Guidance, Outlook, Risks, and Unusual Items
- Usiminas Acquisition: In February 2026, Ternium acquired the remaining participation of the Nippon Group in Usiminas for $315.2 million, increasing its control group participation to 92.9%. Usiminas changed its functional currency from the Brazilian Real to the U.S. Dollar effective January 1, 2026, to reduce FX volatility.
- Material Litigation (Usiminas): A longstanding lawsuit by CSN regarding the 2012 Usiminas acquisition remains pending. The Superior Court of Justice (SCJ) in Brazil ruled against Ternium in 2024, ordering indemnification. Ternium has filed an extraordinary appeal with the Supreme Federal Tribunal. As of June 30, 2026, the potential exposure is estimated at approximately $442.5 million for Ternium Investments and $156.6 million for Ternium Argentina, though management believes the claims are without merit.
- Argentina Subsidiaries: Ternium Argentina operates in a volatile economic environment with foreign exchange restrictions. While some restrictions have eased, access to foreign currency for dividends remains subject to Central Bank approval for prior years. The subsidiary reported a net profit of $260 million for the six-month period.
- U.S. Trade Policy: The filing highlights significant risks from U.S. tariffs (Section 232, Section 301) and the ongoing review of the USMCA agreement. Tariffs on steel imports have increased to 50% for some products, reducing the competitiveness of Ternium's Mexican exports to the U.S. market.
- Dividends: A net dividend of $0.13 per share ($1.30 per ADS), totaling $255.2 million, was paid on May 15, 2026.
Investor Verification Checklist
- Usiminas Litigation Outcome: Monitor the status of the extraordinary appeal filed with the Brazilian Supreme Federal Tribunal regarding the CSN indemnification claim, which could result in a liability of ~$600 million.
- Argentina FX Restrictions: Verify the ability of Ternium Argentina to repatriate earnings and pay dividends given the evolving foreign exchange controls in Argentina.
- U.S. Tariff Impact: Assess the long-term impact of the 50% U.S. steel tariffs and the USMCA review on the Mexico segment's revenue and margins.
- Working Capital Trends: Investigate the drivers behind the $650 million working capital outflow in 2026 compared to the inflow in 2025 to ensure it is not a recurring cash drain.
- Usiminas Integration: Review the operational and financial integration of Usiminas following the full consolidation and functional currency change.