TX · Ternium S.A.

Ternium's Q1 2026 results showed sequential improvement with Adjusted EBITDA up 21% to $479 million, primarily from higher realized steel prices in key markets like Mexico and Brazil, though offset by elevated raw material and slab costs. Steel shipments held steady at 3.7 million tons versus prior quarter but dipped 4% year-over-year, with Mexico volumes accelerating on stronger commercial demand and trade protections, while Southern Region softened due to Argentina's slowdown. Mining shipments fell 16% sequentially to 2.8 million tons amid Brazilian rains, yet segment cash operating income rose on better iron ore prices. Net income of $372 million benefited from a $132 million deferred tax gain tied to currency appreciations in Argentina and Brazil, tempered by a $48 million litigation provision update for the 2012 Usiminas acquisition. Operating cash flow of $217 million reflected a $233 million working capital build from receivables and inventories. Capex focused on Pesquería expansion, completing downstream facilities and advancing the new steel shop for year-end startup. The $315 million Usiminas share acquisition from Nippon Steel and Mitsubishi strengthens Brazil exposure, alongside $150 million loan repayment from Techgen. Net cash declined to $327 million. Outlook points to Q2 Adjusted EBITDA growth via higher Mexico/Argentina shipments and revenue per ton, despite cost pressures, with Brazil stabilizing post-trade measures.