Ternium (NYSE:TX) executives highlighted cost savings, new capacity coming online in Mexico, and a shifting trade environment across the Americas as they discussed fourth-quarter and full-year 2025 results. Management said the company delivered “resilient results” in 2025 despite weaker steel demand and pricing pressure in several markets, while also noting recent fatal workplace accidents that prompted a renewed safety focus.
2025 performance and Q4 results
CEO Máximo Vedoya said Ternium navigated challenging market conditions in 2025 by “adapting rapidly and acting proactively to protect profitability.” He said the company’s cost reduction and efficiency program generated $250 million in savings in 2025 versus 2024, driven by initiatives including blast furnace stability improvements, service contract renegotiations, iron ore sourcing optimization, and logistics improvements. Vedoya said these actions helped support an EBITDA margin of 10%.
Brizzio reported net income of $171 million in the fourth quarter. He attributed lower operating income primarily to one-time charges, “mostly related to an impairment in Lesa,” a mining operation in Mexico. He said the quarter also benefited from a better income tax refund and stronger financial results, and he referenced a tax write-down at Usiminas recorded in the third quarter.
Steel and mining segment trends
On the steel segment, Brizzio said fourth-quarter shipments declined mainly because of weaker volumes in the U.S. and Brazil, reflecting seasonally lower activity. Those declines were “mostly offset” by higher volumes in Mexico and the southern region. He added that Mexico volumes improved in the commercial market, which he linked to government measures aimed at curbing unfair trade practices.
Looking ahead to the first quarter of 2026, Brizzio said Ternium anticipates a sequential increase in shipments, “mainly as a result of the stronger demand in Mexico.” He added that steel cash operating income fell sequentially due to slightly lower volume and lower realized steel prices, partially offset by lower raw material and purchased slab costs and efficiency gains.
In mining, Brizzio said cash operating income increased sequentially on stronger shipments and higher realized iron ore prices, partially offset by higher unit costs.
Cash flow, capital spending, and dividends
Brizzio said Ternium recorded “another solid level” of cash generation from operations in the fourth quarter, supported by a working-capital reduction driven mainly by lower trade and other receivables, partly offset by lower trade payables and other liabilities. He said capital expenditures were $453 million in the fourth quarter, reflecting progress on new facilities at the company’s industrial center in Pesquería, Mexico.
He said the company’s net cash position stayed stable in the quarter and free cash flow was neutral. For the full year 2025, Brizzio said cash generated by operations totaled $2.3 billion, helping finance “demanding” capital spending as Ternium completed downstream investments at Pesquería and continued work on a slab facility.
Management guided to a CapEx decrease in 2026 to around $2 billion. During the Q&A, Vedoya provided additional longer-range figures, stating CapEx would be around $1.2 billion in 2027 and around $800 million in 2028, calling that level “regular CapEx” and noting it includes Usiminas.
Ternium’s board proposed an annual dividend of $2.70 per ADS for fiscal 2025, matching fiscal 2024. Brizzio said the company already paid $0.90 per ADS as an interim dividend in November and noted that, at the current ADS price, the proposal implies a dividend yield “over 6%.”
Trade actions and regional demand outlook
Vedoya emphasized changes in trade policy as a key backdrop for steel markets. He said the United States took significant trade measures in 2025 to counter unfair trade practices from China and other Asian countries and that other countries have followed suit. In Mexico, he said the government recently raised import tariffs across more than 1,400 tariff lines for countries without a free trade agreement; for steel, import tariffs rose to 25%–35%.
In Brazil, Vedoya pointed to the “implementation of anti-dumping measures” and increased import taxes on nine steel products as a “significant shift,” adding that enforcement will matter to prevent circumvention. In Argentina, he said concerns about unfair trade practices from China have grown and referenced a new trade agreement between Argentina and the U.S. that includes cooperation to address unfair trade practices from other nations.
When asked about Mexico’s demand recovery, Vedoya said 2025 demand was “very low,” citing that apparent steel consumption in Mexico fell 10% year over year, while apparent consumption in flat products was 14% below 2024. He said Ternium’s Mexico shipments declined less than the market due to market share gains in flat products. Looking to 2026, he cited an estimate from CANACERO that Mexico’s market could grow 4%, and he emphasized the opportunity to gain further share against imports, noting Mexico still imports “almost 9 million tons” of finished products.
On USMCA timing, Vedoya said it was difficult to predict and noted a target of July for renewal, though he said management’s projections do not assume much benefit for 2026 and instead place more impact in 2027. Brizzio later reiterated that management’s margin improvement efforts for 2026 were discussed without assuming a positive USMCA outcome.
Pesquería expansion and margin outlook
Vedoya announced that Ternium has started production at a new cold rolling mill and a galvanized line at the Pesquería facility, completing a downstream expansion that also included a pickling line and a finishing line center. He said the cold rolling and galvanizing lines are in the ramp-up phase. Construction of the slab plant is “moving ahead as planned,” with startup expected by the end of the year. Vedoya said the slab plant is intended to produce high-quality automotive steel with low CO2 emissions per ton and noted that Ternium secured a $1.25 billion green financing loan to support the project.
In Q&A, management said the upstream Pesquería project was focused on automotive customers and could allow Ternium to sell more to that sector while also displacing imports into Mexico. When asked for quantified cost savings, executives described savings from replacing purchased slabs with internally produced slabs, improved efficiency, and logistics benefits, but did not provide a specific per-ton savings figure.
On profitability, Brizzio addressed questions about returning to a previously cited “normalized” EBITDA margin range of 15%–20%. He said Ternium expects margin improvement in early 2026 due to higher prices, though costs will also rise, and said the company would continue pursuing further cost reductions. He said management sees a chance to reach the 15% level by the end of 2026, while emphasizing the outcome depends in part on trade-related developments.
Vedoya also addressed capital allocation and M&A questions, saying Ternium was not considering a tender offer to acquire remaining minority shares of Usiminas. He said the company does not plan a share buyback due to the amount of shares in the market, while describing both shareholder returns and growth opportunities in core markets as priorities.
Executives closed the call reiterating optimism for 2026, with Vedoya saying he expects profitability to improve starting in the first quarter as cost actions continue and trade enforcement trends strengthen across key markets.
About Ternium (NYSE:TX)
Ternium SA (NYSE:TX) is a leading vertically integrated steel producer with operations across the Americas. The company manufactures a broad range of flat and long steel products, including hot‐rolled and cold‐rolled coils, galvanized and tin-coated sheets, plates, rebars, wire rods, bars and structural sections. These products serve diverse end markets such as automotive, construction, energy, industrial machinery, home appliances and packaging.
Established in 2005 through the consolidation of steel assets in Argentina and Mexico, Ternium has grown to operate major production facilities in Argentina, Brazil, Mexico, Colombia, Central America and the United States.
