Ternium S.A.

Ternium said Q2 adjusted EBITDA increased 50% sequentially, with adjusted EBITDA margin at 16.5% versus 12.2% in Q1. Net income was $465 million in the quarter. Consolidated steel shipments increased 4% sequentially, and steel cash operating income rose by $204 million sequentially. For the first half, adjusted EBITDA was $1.2 billion, up 65% year over year, with EBITDA margin at 14% versus 9% last year; net income was $837 million and shareholders’ earnings were $2.84 per ADS, almost double the prior-year level. Cash from operations was $473 million in the first half, CapEx was $837 million, full-year 2026 CapEx is expected at $1.6 billion, and management expects about $1.2 billion next year. On the balance sheet, Ternium ended June with net debt of $112 million, versus net cash of $327 million at the end of March, after $255 million of dividends and a $418 million working-capital build.

Maximo Vedoya described the quarter as a solid recovery in profitability, with better results in Mexico and a more constructive market in Brazil. He said Mexico is improving gradually, helped by trade defense and restocking, though industrial demand is still held back by Section 232 tariffs and broader uncertainty. He also emphasized strategic progress at Pesqueria and said the new slab facility positions Ternium well for a more integrated North American market, while decarbonization and safety remained priorities.

Pablo Brizzio highlighted the main financial drivers as higher volumes and better margin, with realized steel prices improving mainly in Mexico and Brazil. He said Q2 working capital increased by $418 million due to higher sales and raw material prices, and that the company paid $255 million of dividends in the quarter. He also said CapEx reached $837 million in the first half, the company expects $1.6 billion for full-year 2026 and about $1.2 billion next year, and that the balance sheet remains strong despite the move from net cash of $327 million to net debt of $112 million at June 30.

Analysts focused heavily on Mexico pricing, infrastructure demand, USMCA/Section 232 trade discussions, and capital returns. Management said Mexico price realization was affected by a different sales mix, with more commercial-market sales and spot pricing, and added that third-quarter realization should improve but not see huge moves. On infrastructure, Vedoya said projects tied to the Mexican steel industry agreement could represent around 600,000 to 700,000 tons, but over 1.5 to 2 years rather than immediately. On dividends, management said higher payouts are a possibility if stronger results persist, while preserving a conservative balance sheet and strong financial position; they also said a theoretical simplification of the corporate structure is desirable, but not something to expect in the short run.