Ternium S.A. Q1 2026 Financial Summary
Business Context and Reporting Period
Ternium S.A. (NYSE: TX), a leading steel producer in the Americas, reported unaudited consolidated results for the first quarter ended March 31, 2026. The company operates primarily in Mexico, Brazil, and the Southern Region (Argentina), with segments including Steel Products and Mining. Financial figures are presented in U.S. Dollars and prepared in accordance with IFRS.
Key Financial Metrics
| Metric | Q1 2026 | Q4 2025 | Q1 2025 |
|---|---|---|---|
| Net Sales ($ million) | 3,934 | 3,775 | 3,933 |
| Operating Income ($ million) | 290 | 159 | 132 |
| Adjusted EBITDA ($ million) | 479 | 395 | 322 |
| Adjusted EBITDA Margin | 12% | 10% | 8% |
| Net Income ($ million) | 372 | 171 | 142 |
| Net Income to Equity Holders ($ million) | 213 | 122 | 67 |
| Earnings per ADS ($) | 1.09 | 0.62 | 0.34 |
| Cash from Operating Activities ($ million) | 217 | 528 | 207 |
| Capital Expenditures ($ million) | 406 | 463 | 518 |
| Net Cash Position ($ million) | 327 | 712 | 1,300 |
Operational Volume: Steel product shipments totaled 3.7 million tons (flat sequentially, -4% year-over-year). Mining segment shipments were 2.8 million tons (-16% sequentially, -8% year-over-year).
Material Changes vs. Prior Periods
- Profitability Surge: Adjusted EBITDA rose 21% sequentially and 48% year-over-year, driven by higher realized steel prices in Mexico and Brazil, partially offset by increased raw material costs.
- Income Volatility: Net income included a significant $132 million deferred tax gain (primarily from currency appreciation in Argentina and Brazil) and a $48 million loss from a litigation provision update regarding the Usiminas acquisition.
- Regional Performance: Mexico saw increased shipments due to commercial market recovery. Brazil prioritized profitability over volume. The Southern Region (Argentina) faced demand moderation due to economic slowdowns.
- Liquidity Shift: Net cash decreased to $327 million from $712 million in Q4 2025, impacted by a $315 million acquisition of additional Usiminas shares and $406 million in CapEx, partially offset by a $150 million loan repayment from Techgen.
Outlook, Risks, and Management Commentary
- Guidance: Management expects Adjusted EBITDA to increase in Q2 2026, driven by higher shipments in Mexico and Argentina and improved margins from higher revenue per ton.
- Market Dynamics: Mexico is expected to see continued growth as destocking normalizes. Brazil's market remains stable with government trade measures supporting local industry. Argentina's demand is growing unevenly, with mining and energy outperforming construction and appliances.
- Investment Activity: CapEx focused on the Pesquería, Mexico industrial center, including a new cold-rolling mill and galvanizing line. A new steel shop is expected to commence operations by year-end.
- Risks: Forward-looking statements are subject to risks including GDP uncertainty, global production capacity, tariffs, and cyclicality in steel-consuming industries.
Investor Verification Checklist
- Verify the sustainability of the $132 million deferred tax gain, which was driven by currency fluctuations and may not recur.
- Monitor the impact of the $48 million litigation provision related to the Usiminas acquisition on future earnings.
- Assess the progress of the Pesquería expansion and the ramp-up of new facilities in Mexico.
- Track the normalization of inventory levels in Mexico and the effectiveness of trade defense measures in Brazil.
- Review the company's ability to maintain the 12% Adjusted EBITDA margin amidst rising raw material costs.