Ternium (TX) Q4 2025 earnings summary

Executive summary

• Delivered resilient results in 2025, overcoming challenging market conditions with rapid adaptation, a $250 million cost reduction program, and stable adjusted EBITDA margin in Q4, despite lower steel prices and volumes.

• Net income for Q4 2025 was $171 million, rebounding from prior quarter losses, with full year net income at $303 million, impacted by a $405 million deferred tax asset write-down at Usiminas and a $117 million litigation provision loss.

• Advanced major industrial expansion, including new cold rolling and galvanized lines at Pesquería, and progress on a new slab plant to produce low-CO2 automotive steel.

• Secured a $1.25 billion green loan, recognized with multiple sustainability awards, to support expansion projects.

Financial highlights

• Adjusted EBITDA margin reached 10.5% in Q4 2025 and 9.9% for the full year, with Q4 adjusted EBITDA at $395 million and full year at $1.5 billion, down 24% from 2024.

• Net sales in Q4 2025 were $3.8 billion, with full year net sales totaling $15.6 billion, down 12% from 2024.

• Cash generated by operations in 2025 totaled $2.3 billion, supporting high CapEx and maintaining a stable net cash position of $712 million at year-end.

• CapEx peaked at $463 million in Q4 and $2.5 billion for the year, mainly for the Pesquería expansion.

• Proposed annual dividend of $2.70 per ADS for 2025, totaling $530 million, with a yield over 6%.

Outlook and guidance

• Profitability expected to improve in 2026, with sequentially higher adjusted EBITDA and shipment growth in Q1, especially in Mexico.

• CapEx to decrease to around $2 billion in 2026, $1.2 billion in 2027, and $800 million in 2028.

• Mexican steel market forecasted to grow 4% in 2026, with further market share gains anticipated.

• Margins expected to recover toward 15% by end of 2026, with further upside possible if USMCA negotiations succeed.