• Sales: $2.8 billion in Q4 2024, down 17% year-over-year and 2% sequentially.
• EBITDA: $726 million in Q4 2024, up 6% sequentially; margin increased to 25.5%.
• Adjusted EBITDA: $659 million in Q4 2024, margin of 23% without one-off effects.
• Cash Flow from Operations: $492 million in Q4 2024.
• Net Cash Position: $3.6 billion at the end of Q4 2024.
• Dividend Proposal: Annual dividend of $0.83 per share, including an interim dividend of $0.27 per share.
• Annual Results: EBITDA of $3.1 billion, net income of $2.1 billion, net sales of $12.5 billion for 2024.
• Free Cash Flow: $2.2 billion for 2024, distributed to shareholders through dividends and share buybacks.

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Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Tenaris SA (NYSE:TS) reported a solid financial performance for 2024, with EBITDA reaching $3.1 billion and net income of $2.1 billion on net sales of $12.5 billion.
• The company maintained a strong net cash position of $3.6 billion, despite significant expenditures on dividends, share buybacks, and capital investments.
• Tenaris SA (NYSE:TS) is proposing a 38% increase in the annual dividend per share, reflecting confidence in its financial health and commitment to returning value to shareholders.
• The company has made significant investments to improve industrial efficiency and reduce its environmental footprint, including new electric arc furnaces and renewable energy projects.
• Tenaris SA (NYSE:TS) has strengthened its position in key markets, securing major contracts in North America, the Middle East, and deepwater projects, enhancing its competitive edge.

Negative Points

• Sales in Q4 2024 decreased by 17% compared to the same quarter in the previous year, primarily due to lower volumes and average selling prices.
• The net cash position decreased due to substantial outflows for dividends, share buybacks, and capital expenditures, which could impact future liquidity.
• The company faced a tragic accident at its main plant in Argentina, resulting in the loss of two employees, highlighting safety concerns.
• In Mexico, sales were negatively impacted by a steep decline in drilling activity and financial difficulties at Pemex, affecting revenue streams.
• The geopolitical and trade policy uncertainties, particularly in the US, pose potential risks to Tenaris SA (NYSE:TS)'s operations and market dynamics.

Q & A Highlights

Q: If the 25% tariffs on imported steel tubulars are implemented by the US Commerce Department, would you still expect Section 232 quotas to remain in place? How do you see the impact on OCTG pricing and import trends if that were to occur? A: Paolo Rocca, Chairman and CEO, explained that the introduction of the 25% tariff under Section 232 is expected to increase prices in the US due to the significant share of imports in the OCTG market. While there is no clear indication from the US administration regarding quotas, the overall orientation has been to support domestic industry. Tenaris is well-positioned as it produces most of its pipes in the US, although some steel imports may incur tariffs.

Q: Can you provide insights into Tenaris' growth prospects in Argentina, particularly in OCTG, long-haul pipe, and services like coil tubing and frac? A: Paolo Rocca highlighted that Tenaris is optimistic about energy sector investments in Argentina, particularly in Vaca Muerta. The company expects an increase in rigs and pipeline projects, such as the VMS pipeline. Tenaris is expanding its fracking capabilities and anticipates increased demand for its services and products in the region.

Q: What are your thoughts on sales and margin evolution in Q1 and the first half of 2025? A: Paolo Rocca indicated that Q1 margins are expected to be in line with Q4 2024, influenced by lower volumes in Europe and positive impacts from price increases in the US. For the first half of 2025, margins are expected to improve slightly, contingent on tariff decisions in March, which could affect market dynamics and pricing.

Q: Could you elaborate on the supply and demand dynamics in North America, particularly regarding inventory levels and the impact of Section 232 quotas? A: Luca Zanotti, President of US Operations, noted that imports have decreased significantly, normalizing inventory levels to less than six months. Structural measures against certain countries have reduced imports, and the administration is expected to monitor imports closely to support domestic capacity utilization. The demand side shows stable activity among major operators, with interest from smaller independents and gas-related projects.

Q: How is Tenaris positioned in Saudi Arabia, and what are the key areas of strength and softness in the region? A: Gabriel Podskubka, President of Eastern Hemisphere, stated that drilling activity in the Middle East is stable, with growth in unconventional gas projects. While oil-related drilling is uneven due to idle capacity, Tenaris is well-positioned in areas like UAE. The company is also involved in energy transition projects, such as a significant CCS pipeline project in Saudi Arabia.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.