Ternium (TX) Q2 2025 earnings summary

Executive summary

• Adjusted EBITDA rose 25% sequentially in Q2 2025 to $403 million, with margin up to 10%, driven by higher realized steel prices in Mexico, despite a slight dip in shipments and flat net sales.

• Net income for Q2 2025 was $259 million, including a $40 million provision adjustment related to Usiminas litigation; adjusted net income was $299 million.

• Operational focus remains on cost reduction, efficiency, and margin improvement amid ongoing market volatility and trade policy uncertainty.

• Expansion projects in Mexico, particularly at Pesquería, are progressing on schedule and are central to long-term growth.

• Steel segment margins improved despite lower sales volumes, while mining segment shipments increased but margins declined due to lower iron ore prices.

Financial highlights

• Adjusted EBITDA reached $403 million in Q2 2025, up 25% quarter-over-quarter, with margin improving to 10% from 8% in Q1.

• Net income was $259 million, with adjusted net income at $299 million after excluding a $40 million litigation provision.

• Cash flow from operations totaled $1 billion in Q2, supported by a $787 million decrease in working capital.

• Net cash position at quarter-end was $1 billion, down $268 million from March, after $353 million in dividend payments and high CAPEX.

• Free cash flow was $234 million, with significant working capital release.

Outlook and guidance

• Sequential improvement in adjusted EBITDA is expected in Q3 2025, with a slight increase in shipments led by Mexico.

• EBITDA margin target of around 15% by Q4 2025, assuming a normal market environment.

• Cost efficiency initiatives are expected to deliver $300 million in savings in 2025 compared to 2024, excluding raw material price effects and not including Usiminas.

• CAPEX is projected to peak in Q2 2025, with a gradual decline in subsequent quarters.

• Management notes ongoing risks from economic, political, and market conditions, as well as volatility in steel and raw material prices.