Tenaris S.A. Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Sales: $3.1 billion, up 6% year-on-year and 4% sequentially.

EBITDA: $735 million, a 3% sequential increase.

Net Income: $564 million, a 22% increase year-on-year.

EBITDA Margin: Stable at 24%, with higher maintenance costs offset by lower tariff costs.

Operating Cash Flow: $618 million; Capital Expenditures: $114 million; Free Cash Flow: $503 million.

Share Buybacks: $90 million during the quarter; Net Cash Position: $3.8 billion.

2Strategic Updates and Business Highlights

Geopolitical Impact: The conflict in the Middle East has disrupted operations, particularly affecting sales in Kuwait, Qatar, and Iraq, with an expected revenue impact of $140 million in Q2.

Operational Resilience: Despite regional turmoil, Tenaris maintained operations in Saudi Arabia and UAE, receiving recognition for service quality.

Growth Areas: Anticipated increases in U.S. drilling activity, particularly in shale plays, and the integration of new technology (AllTorque) to enhance service offerings.

Offshore Projects: Promising outlook for deepwater drilling and pipeline construction, with several projects nearing final investment decisions.

3Forward Guidance and Outlook

Q2 2026 Expectations: Anticipated revenue decline in mid- to high single digits due to Middle East disruptions; EBITDA margin expected to contract by a few points due to increased logistics costs and lower volume absorption.

Second Half Recovery: Expected recovery in sales and EBITDA margins close to Q1 levels, driven by improved offshore activity and pricing adjustments.

Long-term Growth: Positive outlook for offshore and North American markets, with expectations of increased rig counts and pricing improvements.

4Bad News, Challenges, or Points of Concern

Middle East Disruptions: Significant revenue impact anticipated due to ongoing geopolitical tensions, with logistics costs rising due to alternative shipping routes.

Tariff Costs: Section 232 tariffs currently impacting results at $110-$120 million, expected to remain stable through the year.

Antidumping Measures: Recent antidumping cases in Canada may limit supply options, although Tenaris has a strong domestic manufacturing strategy.

Competitive Landscape: Potential for increased competition in the future, particularly from new market entrants and consolidation among competitors.

5Notable Q&A Insights

Q2 EBITDA Impact: Expected to see a contraction due to logistics costs and lower volume absorption, with an estimated $32 million increase in logistics costs.

North American Growth: Anticipated growth in both pricing and volume, with a projected increase of around 50 rigs by year-end.

Pipeline Opportunities: Potential for new pipeline projects in the Middle East, which could provide significant demand for Tenaris products.

Venezuela Outlook: Positive expectations for increased production and sales in Venezuela, with plans to initiate rig direct services in July 2026. Overall, Tenaris reported solid financial results for Q1 2026 but faces challenges from geopolitical tensions and rising costs. The company remains optimistic about recovery in the second half of the year and sees growth opportunities in North America and offshore projects.