Ternium S.A. Form 6-K Summary: Q4 and Full Year 2025 Results
Business Context and Reporting Period
This filing reports the fourth quarter and full-year 2025 results for Ternium S.A., a leading steel producer in the Americas. The report covers the period ended December 31, 2025, and was filed on February 18, 2026. Results are presented in U.S. dollars and metric tons in accordance with IFRS.
Key Financial Metrics
| Metric | Q4 2025 | Full Year 2025 | Full Year 2024 |
|---|---|---|---|
| Net Sales | $3,775 million | $15,609 million | $17,649 million |
| Operating Income | $159 million | $705 million | $1,263 million |
| Adjusted EBITDA | $395 million | $1,541 million | $2,038 million |
| Adjusted EBITDA Margin | 10.5% | 9.9% | 11.5% |
| Net Income | $171 million | $303 million | $174 million |
| Net Income to Equity Holders | $122 million | $425 million | ($54 million) |
| Earnings per ADS | $0.62 | $2.17 | ($0.27) |
| Cash from Operations | $528 million | $2,314 million | $1,906 million |
| Capital Expenditures (CapEx) | $463 million | $2,501 million | $1,865 million |
| Free Cash Flow | $65 million | ($187 million) | $41 million |
| Net Cash Position | $712 million | $712 million | $1,644 million |
Material Changes vs. Prior Period
- Revenue Decline: Full-year net sales decreased 12% year-over-year, driven by a 13% drop in steel segment sales due to lower realized steel prices and a 4% decline in shipments.
- Profitability Pressure: Adjusted EBITDA fell 24% for the full year. However, Q4 2025 Adjusted EBITDA increased 46% compared to Q4 2024, aided by lower raw material costs and efficiency initiatives.
- Regional Performance:
- Mexico: Shipments declined 9% year-over-year due to sluggish construction and U.S. tariff uncertainty, though Q4 saw a sequential increase.
- Brazil: Shipments remained flat year-over-year despite higher domestic consumption, offset by increased flat steel imports.
- Southern Region: Shipments rose 21% year-over-year, reflecting a recovery in Argentina from a low 2024 base.
- Other Markets: Shipments declined 10% year-over-year, primarily due to lower U.S. sales.
- Mining Segment: Shipments increased 14% year-over-year, and net sales rose 7%, driven by higher volumes in Mexico and Brazil.
Guidance, Outlook, and Risks
- 2026 Outlook: Management anticipates an increase in Adjusted EBITDA in Q1 2026 compared to Q4 2025. Shipments are expected to rise, primarily in Mexico, with improved margins driven by higher revenue per ton.
- Trade Environment:
- Mexico: Government raised import tariffs on over 1,400 tariff lines to curb unfair trade practices. Commercial demand is improving after a 2025 destocking period.
- Brazil: Antidumping duties applied to cold rolled coils and galvanized steel to address unfair imports from China.
- Argentina: Demand expected to recover gradually, supported by agriculture, mining, and energy sectors. Concerns remain regarding unfair imports.
- Unusual Items:
- Tax Write-downs: Full-year results included a $405 million loss from the write-down of deferred tax assets at Usiminas and a $23 million write-down at Las Encinas.
- Litigation: A $117 million loss was recorded for ongoing litigation related to the Usiminas acquisition.
- Usiminas Currency: Usiminas changed its functional currency from the Brazilian Real to the U.S. dollar effective January 1, 2026.
- Dividends: The Board proposed an annual dividend of $2.70 per ADS ($530 million total), representing a yield of approximately 6%. This includes an interim dividend of $0.90 per ADS already paid in Q4.
Investor Verification Checklist
- Verify the impact of the Usiminas functional currency change on future financial reporting and translation adjustments.
- Monitor the effectiveness of new trade tariffs in Mexico and Brazil in stabilizing local steel prices and volumes.
- Assess the sustainability of the $2.5 billion CapEx cycle, particularly the expansion in Pesquería, Mexico, against Free Cash Flow generation.
- Review the recoverability of deferred tax assets, given the significant write-downs recorded in 2025.
- Track the resolution of ongoing litigation related to the Usiminas acquisition and its potential future financial impact.