Ternium (TX) Q4 2025 earnings summary

Executive summary

• Delivered resilient results in 2025, overcoming challenging market conditions through rapid adaptation and proactive cost management, achieving $250 million in savings year-over-year.

• Fourth quarter 2025 net income was $171 million, with a deferred tax gain of $94 million; full year net income reached $303 million, despite 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, with slab plant construction on track for year-end start-up.

• Secured $1.25 billion green loan for expansion, recognized with multiple sustainability awards.

• Actively engaged in regional trade policy discussions to support fair competition and regional integration.

Financial highlights

• Adjusted EBITDA for Q4 2025 was $395 million, with a margin of 10.5%; full year Adjusted EBITDA was $1.5 billion, down 24% from 2024.

• Net income for Q4 was $171 million, impacted by one-time impairment charges in mining operations and prior quarter write-downs; full year net income was $303 million.

• Cash generated by operations in 2025 totaled $2.3 billion, supporting high CapEx and dividend payments.

• CapEx peaked at $2.5 billion in 2025, mainly for Pesquería expansion; Q4 CapEx was $463 million.

• Proposed annual dividend of $2.7 per ADS for 2025, totaling $530 million and implying a yield over 6%.

Outlook and guidance

• Expecting sequentially higher adjusted EBITDA and shipments in Q1 2026, driven by stronger demand in Mexico.

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

• Positive on margin recovery, targeting 15% EBITDA margin by end of 2026, with further upside possible if trade agreements progress.

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

• Argentina's steel demand is projected to recover gradually in 2026, driven by key sectors and new trade agreements.