Ternium (TX) Q1 2026 earnings summary

Executive summary

• Adjusted EBITDA rose 21% sequentially in Q1 2026 to $479 million, driven by higher realized steel prices, especially in Mexico and Brazil, partially offset by increased raw material and slab costs.

• Net income reached $372 million, supported by improved operations, FX gains, and deferred tax gains of $132 million, with a $48 million litigation provision loss related to Usiminas.

• Steel shipments were stable at 3.7 million tons, while mining shipments fell 16% sequentially to 2.8 million tons due to adverse weather in Brazil.

• Demand in Mexico is recovering after a 10% drop in 2025, aided by government policies and infrastructure projects; Brazil's steel consumption is stable, with strong automotive but weak agribusiness, and Argentina's recovery is uneven across sectors.

• Cash from operations was $217 million, with a $233 million working capital increase mainly from higher trade receivables.

Financial highlights

• Net sales increased 4% sequentially to $3.93 billion, flat year-over-year.

• Adjusted EBITDA reached $479 million in Q1 2026, up from $395 million in Q4 2025, with margin improving to 12% from 10% sequentially.

• Net income for Q1 2026 was $372 million, including a $132 million deferred tax gain and a $48 million litigation provision loss.

• Operating income rose 82% sequentially to $290 million.

• Net cash position declined to $327 million at March 2026, impacted by $315–350 million Usiminas share acquisition and high capex.

Outlook and guidance

• Adjusted EBITDA expected to increase in Q2 2026, supported by higher shipments and improved margins, especially in Mexico and Argentina.

• Expect continued volume improvement in Mexico, driven by commercial market and infrastructure projects, and higher shipments in Mexico and Argentina as trade measures take effect.

• Adjusted EBITDA margin expected to keep rising, supported by higher prices, though offset by increased costs.

• CapEx to decrease in coming years, with 2027 projected at $1–1.2 billion.

• Usiminas shipments in Brazil expected to improve as trade measures take effect and inventories normalize.