Ternium (TX) Q1 2025 earnings summary

Executive summary

• Adjusted EBITDA increased sequentially in Q1 2025, driven by improved margins and higher steel and iron ore shipments, despite trade tensions and market uncertainty impacting business confidence and steel demand, especially in Mexico.

• Net income for Q1 2025 was $142 million, including a $45 million litigation provision related to Usiminas; adjusted net income was $188 million.

• Steel shipments rose, especially in Brazil and the US, while Mexico saw a decrease.

• Net sales increased 1% sequentially to $3.9 billion but declined 18% year-over-year.

• Net cash position declined to $1.3 billion, mainly due to capital expenditures for the Pesquería expansion.

Financial highlights

• Adjusted EBITDA margin improved to 8% from 7% in the previous quarter, mainly due to better margins from higher shipments and lower steel cost per ton.

• Net financial results improved by $130 million, driven by FX gains and partial divestment of Argentine bonds.

• Mining net sales increased 13% sequentially, driven by higher iron ore prices.

• Operating income rose to $132 million, up 211% sequentially.

• Free cash flow was negative $311 million, reflecting high capital expenditures.

Outlook and guidance

• Expectation of sequential increase in adjusted EBITDA in Q2 2025, supported by higher realized steel prices and further cost reductions, targeting double-digit EBITDA margins.

• Steel shipments anticipated to remain stable overall in Q2, with subdued volumes in Mexico, increasing shipments in Argentina, and stable demand in Brazil.

• Capex in Q1 2025 focused on expansion projects at the Pesquería Industrial Center.

• Ongoing cost reduction programs and efficiency improvements expected to continue benefiting margins.