Ternium Q3 Adjusted EBITDA Rises 10% as Steel Pricing and Shipments Offset Mining Weakness

Ternium S.A. (TX) reported a 10% sequential increase in third-quarter 2026 adjusted EBITDA to $785 million, as higher realized steel prices and shipments outweighed rising steel costs and a weaker contribution from mining. The adjusted EBITDA margin reached 16.9%, compared with 16.5% in the second quarter.

Net income was $368 million, down from $465 million in the prior quarter. Higher operating income and a positive shift in net financial results were more than offset by a larger income tax charge. The quarter included $116 million of deferred tax losses, mainly related to depreciation of the Mexican peso.

Steel Business Drives Earnings Growth

Steel segment shipments increased 5% from the second quarter to about 4.0 million tons. Mexico remained Ternium’s largest market, representing 54% of shipments, followed by Brazil at 24%, the Southern Region at 14% and other markets at 8%.

Shipments in Mexico rose to 2.18 million tons from 2.08 million tons in the previous quarter. Brazil increased to 984,000 tons from 937,000 tons, while the Southern Region reached 560,000 tons from 519,000 tons. Other-market shipments were broadly stable at 318,000 tons.

Revenue per ton increased for a third consecutive quarter, supported by firmer prices in Mexico. Steel cash operating income rose 16% sequentially to $754 million as pricing and volume gains exceeded higher raw-material and slab costs. Cash operating income per ton increased to $186 from $169, while the segment’s cash operating margin expanded to 17% from 16%.

Mining Contribution Declines

Mining segment shipments fell 15% to 2.8 million tons after Mineração Usiminas temporarily halted certain operations amid weaker export profitability. Lower sales volumes and realized iron ore prices reduced mining cash operating income to $40 million from $58 million in the second quarter.

Mining cash operating income per ton declined to $14 from $17, and the segment’s margin eased to 16% from 18%.

Free Cash Flow Restores Net Cash Position

Operating cash flow more than doubled sequentially to $613 million despite a $148 million working-capital build. Capital expenditure totaled $398 million, remaining focused on the new Pesquería slab mill, which Ternium said was advancing on schedule.

The company generated $215 million of free cash flow and ended September with a net cash position of $22 million, even after a $74 million markdown in Argentine securities.

For the first nine months of 2026, adjusted EBITDA approached $2.0 billion, up 73% from the comparable 2025 period, while the adjusted EBITDA margin increased to 15% from 10%. Net income totaled $1.2 billion, equivalent to $4.26 per American depositary share.

Capital expenditure for the nine-month period fell 39% to $1.2 billion, with the presentation indicating that the peak of the company’s investment cycle had passed. Ternium’s board approved an interim dividend of $0.90 per ADS, payable on November 17, 2026.

Ternium cautioned that its forward-looking expectations remain exposed to economic and political conditions, interest rates, inflation, currency movements, steel demand and pricing, and changes in raw-material and energy costs. Supply disruptions and changes in the company’s business strategy could also cause actual results to differ materially from current expectations.