Ternium(US:TX)2025-10-28 21:01Financial Performance - In Q3 2025, Ternium reported steel product shipments of 3.8 million tons, a 1% increase from Q2 2025 but a 9% decrease year-over-year[6]. - Adjusted EBITDA for Q3 2025 was $420 million, reflecting a 4% increase from Q2 2025 and a 14% increase year-over-year, with an adjusted EBITDA margin of 11%[6][7]. - The company experienced a net loss of $270 million in Q3 2025, which included a $405 million non-cash charge related to deferred tax assets and a $32 million loss from ongoing litigation[4][8]. - The company reported earnings per ADS of $0.10 in Q3 2025, down from $1.10 in Q2 2025[56]. - The company experienced a net loss of $(270) million in 3Q25, compared to a net income of $259 million in 2Q25 and $93 million in 3Q24[74]. Cash Flow and Capital Expenditures - Cash provided by operating activities was $535 million, while capital expenditures (CAPEX) totaled $711 million in Q3 2025[4]. - Cash from operations in Q3 2025 amounted to $535 million, with a working capital decrease of $174 million[58]. - Free cash flow for 3Q25 was $(175) million, down from $234 million in 2Q25 and $(143) million in 3Q24[77]. - Capital expenditures in 3Q25 totaled $(711) million, compared to $(810) million in 2Q25 and $(446) million in 3Q24[77]. - The company’s total borrowings decreased to $(2.0) billion as of September 30, 2025, from $(2.4) billion as of June 30, 2025[78]. Segment Performance - The mining segment saw shipments of 2.0 million tons in Q3 2025, with an adjusted EBITDA margin of 11%[4][6]. - In Q3 2025, total net sales for the mining segment were $268 million, a decrease of 5% sequentially and an increase of 1% year-over-year[41]. - Cash operating income for the mining segment decreased sequentially and year-over-year, primarily due to lower margins and reduced sales volumes[42]. - Cash operating income for the steel segment was $391 million in 3Q25, with a cash operating income margin of 10%, up from 9% in 2Q25 and 7% in 3Q24[75]. - The mining segment reported a cash operating income of $38 million in 3Q25, with a cash operating income margin of 14%, down from 19% in 2Q25 and 20% in 3Q24[76]. Tax and Financial Results - Net financial results for Q3 2025 showed a loss of $35 million, including a $34 million loss in net foreign exchange results[49]. - Ternium's income tax expense in Q3 2025 totaled $444 million, which included a $405 million charge related to the write-down of deferred tax assets at Usiminas[52]. - The net result for Q3 2025 was a loss of $270 million, impacted by a $405 million write-down of deferred tax assets[54]. Dividends and Future Outlook - Ternium announced an interim dividend of $0.90 per ADS, totaling $177 million, with a projected total distribution of $2.70 per ADS for 2025, yielding approximately 7%[10][11]. - The company anticipates a slight decrease in Adjusted EBITDA for Q4 2025 due to seasonal shipment reductions, but expects the adjusted EBITDA margin to remain stable[13]. - In Brazil, Ternium is focusing on cost reduction initiatives to improve competitiveness amid challenges from unfairly traded steel imports[15]. - The outlook for Argentina is positive, with significant opportunities in agriculture, mining, and oil and gas sectors following the resolution of mid-term election uncertainties[16]. Overall Sales Performance - Total net sales for the first nine months of 2025 were $9,589 million, a 14% increase compared to $8,389 million in the same period of 2024[41]. - Changes in working capital resulted in a positive cash flow of $174 million in 3Q25, a significant decrease from $781 million in 2Q25[77]. - Ternium's net cash position decreased to $715 million by the end of September 2025, down $303 million from June 2025, due to cash demands from industrial expansion in Mexico[9]. - As of September 30, 2025, Ternium's net cash position was $715 million, a decrease of $303 million since June 2025[60].