Usinas Siderúrgicas de Minas Gerais (USIM5) Q1 2026 earnings summary

Executive summary

• Consolidated adjusted EBITDA rose 56% sequentially to R$653 million in Q1 2026, with net income surging 596% to R$896 million, driven by operational improvements, cost reductions, and positive FX effects.

• Net revenue for Q1 2026 was R$5.87 billion, down 5% from the previous quarter and 14% year-over-year, mainly due to lower steel and mining sales volumes.

• The company maintained a strong balance sheet, ending the quarter with net cash of R$391 million and a net debt/EBITDA ratio of -0.20x.

• The Brazilian government imposed antidumping duties on steel imports, temporarily increasing inventories but expected to benefit domestic producers in coming quarters.

• Ternium acquired all common shares previously held by Nippon Steel and Mitsubishi, altering the control group in February 2026.

Financial highlights

• Steel sales volume decreased by 7% quarter-over-quarter to 1.0Mt, but EBITDA improved due to a favorable product mix, higher prices, and lower COGS per ton.

• Mining sales volume dropped 21% quarter-over-quarter due to heavy rainfall and logistics constraints, with net revenue per ton stable at BRL 87.

• Adjusted EBITDA margin improved to 11.1% from 6.8% in 4Q25.

• Positive operating cash flow of R$370 million and free cash flow of R$84 million, with CAPEX of R$285 million, down 23% sequentially.

• Gross profit margin remained stable at 12%, with basic earnings per share at R$0.60 (common) and R$0.23 (preferred).

Outlook and guidance

• Steel unit sales volumes expected to remain stable in the next quarter, with higher costs from raw materials, energy, and freight, partially offset by improved net revenue per ton.

• Mining unit anticipates higher volumes in drier quarters but also increased maritime freight costs.

• Price increases of 5% implemented in April for spot and distribution sectors, with further adjustments possible depending on cost pressures.

• Decarbonization plan targets a 15% reduction in emissions intensity by 2030.

• Management expects continued monitoring of macroeconomic conditions and key assumptions for impairment testing.