Ternium ((TX)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Ternium’s recent earnings call painted a mixed picture, highlighting both achievements and challenges. The company reported an increase in EBITDA and strong cash generation, underscoring its operational strength. However, it also faced significant hurdles, including a net loss in Q3, decreased mining segment sales, and issues with steel demand in Mexico and high imports in Brazil. The anticipated decline in Q4 EBITDA due to seasonal factors further complicates the outlook.
Increase in EBITDA
Ternium reported an increase in EBITDA for Q3 2025, primarily attributed to a decrease in cost per ton. This improvement was supported by the ongoing execution of the company’s competitiveness plan, showcasing Ternium’s focus on enhancing efficiency and reducing operational costs.
Strong Cash Generation
The company’s operating activities generated over $0.5 billion in cash during the quarter. This strong cash generation highlights Ternium’s ability to maintain liquidity and financial stability amidst challenging market conditions.
Interim Dividend Declared
Ternium’s Board of Directors declared an interim dividend of $0.90 per ADS, maintaining the same payment level as the previous year. This decision reflects the company’s commitment to returning value to its shareholders despite the current financial challenges.
Award for Sustainability
In recognition of its sustainability efforts, Ternium received a Steelie Award for excellence from the World Steel Association for its Winds of Change project in Argentina. This accolade underscores the company’s dedication to sustainable practices and environmental responsibility.
Efficiency Improvements in Brazil
Ternium’s efforts to increase operational efficiency in Brazil are yielding positive results, with a continued decrease in cost per ton. These improvements are crucial for maintaining competitiveness in a market facing high levels of imported steel.
Net Loss in Q3 2025
The company reported a net loss of $270 million for Q3 2025. This loss was primarily due to a $405 million non-cash loss related to the write-down of deferred tax assets at Usiminas and a $32 million loss from ongoing litigation.
Challenges in Mexican Steel Demand
Uncertainty stemming from U.S. trade policies significantly impacted steel demand in Mexico during 2025. This led to a forecasted decrease in shipments for Q4 2025, posing a challenge for Ternium’s operations in the region.
High Imports in Brazil
Brazil faced a high level of unfairly traded steel imports, primarily from China, with a 33% increase in imports of finished steel products in the first nine months of 2025. This influx of imports presents a significant challenge for domestic producers like Ternium.
Decrease in Mining Segment Sales
Net sales in the mining segment declined quarter-over-quarter, primarily due to slightly lower iron ore shipments and an increase in cost per ton at Las Encinas. This decrease highlights the volatility and challenges within the mining sector.
Anticipated Q4 EBITDA Decline
Ternium anticipates a slight decline in adjusted EBITDA for Q4 2025, primarily due to a seasonal slowdown in shipments. Despite this, the company expects margins to remain stable, indicating a resilient operational framework.
Forward-Looking Guidance
Looking ahead, Ternium remains focused on strategic initiatives and performance metrics. The company anticipates a slight decline in adjusted EBITDA for the fourth quarter due to seasonal shipment slowdowns, though margins are expected to remain stable. Ternium is also navigating uncertainties in the U.S. tariff framework and emphasizes the importance of the USMCA agreement for future regional integration. The company supports Mexican government initiatives to bolster the domestic steel industry and continues to explore growth opportunities in Brazil and Argentina.
In conclusion, Ternium’s earnings call highlighted a complex landscape of achievements and challenges. While the company demonstrated strong operational capabilities with increased EBITDA and cash generation, it also faces significant hurdles, including a net loss and market uncertainties. The forward-looking guidance suggests a cautious yet optimistic approach as Ternium navigates these challenges and seeks growth opportunities.