Ternium Q2 Earnings Call Highlights

Ternium Q2 Earnings Call Highlights

Second-quarter profitability rebounded: Adjusted EBITDA rose 50% sequentially to a 16.5% margin, supported by higher shipments, improved prices and stronger conditions in Mexico and Brazil. Net income reached $465 million, while first-half adjusted EBITDA increased 65% year over year to $1.2 billion.

Mexico recovery and Pesquería expansion are key growth drivers: Lower imports, restocking and market-share gains improved Mexican volumes, while the new slab facility is expected to begin operations in early 2027. Management expects third-quarter EBITDA to increase sequentially, though the facility’s earnings contribution will initially be limited during its ramp-up.

Capital spending is set to decline: Ternium expects 2026 capital expenditures of $1.6 billion, falling to about $1.2 billion in 2027 after the Mexico investment program peaks. The company ended June with just $112 million in net debt and said higher dividends could be considered if stronger results prove sustainable.

Ternium NYSE: TX reported a sequential recovery in second-quarter profitability, supported by higher steel shipments, improved realized prices and stronger market conditions in Mexico and Brazil. The company said adjusted EBITDA increased 50% from the first quarter, while its adjusted EBITDA margin expanded to 16.5% from 12.2%. Chief Executive Officer Máximo Vedoya said the company ended June with net debt of $112 million and expects capital expenditures to decline after reaching the peak of its investment program in Mexico. The company’s major Pesquería expansion is now primarily focused on construction of a new slab facility, which is expected to begin operations in early 2027.

Chief Financial Officer Pablo Brizzio said second-quarter net income reached $465 million, driven principally by operating performance. The quarter-over-quarter increase in operating income was partly offset by weaker financial results, including foreign-exchange losses and lower deferred-tax gains. Consolidated steel shipments rose 4% sequentially. In Mexico, shipments continued to increase as the commercial market improved, imports declined and Ternium gained market share, Brizzio said. Sales volumes in Brazil were broadly stable, as Usiminas maintained its focus on margins rather than volume, while volumes in the company’s southern region increased seasonally.

Steel segment cash operating income increased by $240 million from the first quarter, reflecting higher volumes and realized steel prices. Costs per ton rose slightly. For the third quarter, Ternium expects adjusted EBITDA to rise sequentially on higher shipments and a higher EBITDA margin. Brizzio said revenue per ton should increase, although this is expected to be partly offset by higher costs per ton across the company’s markets. For the first half of 2026, adjusted EBITDA totaled $1.2 billion, up 65% from a year earlier, and the EBITDA margin increased to 14% from 9%. First-half net income was $837 million, or $2.84 per American depositary share, nearly double the prior-year level, according to Brizzio.

Vedoya said Mexico’s business environment has been gradually improving as government measures targeting unfair trade practices help steel volumes recover. He said restocking in the commercial value chain helped bring inventories closer to more balanced levels, while lower imports and Ternium’s service capabilities contributed to market-share gains. Demand from industrial customers has improved more slowly.