Tenaris Announces 2024 Fourth Quarter and Annual Results

The financial and operational information contained in this press release is based on audited consolidated financial statements presented in U.S. dollars and prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board and adopted by the European Union, or IFRS. Additionally, this press release includes non-IFRS alternative performance measures i.e., EBITDA, Free Cash Flow, Net cash / debt and Operating working capital days. See exhibit I for more details on these alternative performance measures.

LUXEMBOURG, Feb. 19, 2025 (GLOBE NEWSWIRE) -- Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) ("Tenaris") today announced its results for the fourth quarter and year ended December 31, 2024 in comparison with its results for the fourth quarter and year ended December 31, 2023.

Summary of 2024 Fourth Quarter Results

(Comparison with third quarter of 2024 and fourth quarter of 2023)

 
                                       4Q 2024    3Q 2024      4Q 2023 
                                       -------  -----------  ------------ 
Net sales ($ million)                    2,845  2,915  (2%)  3,415  (17%) 
Operating income ($ million)               558    537    4%    819  (32%) 
Net income ($ million)                     519    459   13%  1,146  (55%) 
Shareholders' net income ($ million)       516    448   15%  1,129  (54%) 
Earnings per ADS ($)                      0.94   0.81   16%   1.92  (51%) 
Earnings per share ($)                    0.47   0.40   16%   0.96  (51%) 
EBITDA* ($ million)                        726    688    6%    975  (26%) 
EBITDA margin (% of net sales)           25.5%  23.6%        28.6% 
 
 

*EBITDA in fourth quarter of 2024 includes a $67 million gain from the partial reversal of a provision for the ongoing litigation related to the acquisition of a participation in Usiminas. If this charge was not included EBITDA would have amounted to $659 million, or 23.2% of sales

Net sales in the fourth quarter were more resilient than expected as we were able to reduce inventories and advance some shipments in the Middle East and Turkey, despite lower demand in Mexico, Argentina and Saudi Arabia. Our EBITDA declined 4% on a comparable basis with the margin supported by a favorable product mix which offset the effect of residual price declines in North America. Net income increased due to the partial reversal of the provision made in the second quarter for the ongoing litigation related to the acquisition of a participation in Usiminas jointly with our associate company, Ternium.

During the quarter, our free cash flow amounted to $310 million and, after spending $299 million on dividends and $454 million on share buybacks, our net cash position declined to $3.6 billion at December 31, 2024.

Summary of 2024 Annual Results

 
                                       12M 2024  12M 2023  Increase/(Decrease) 
                                       --------  --------  ------------------- 
Net sales ($ million)                    12,524    14,869                (16%) 
Operating income ($ million)              2,419     4,316                (44%) 
Net income ($ million)                    2,077     3,958                (48%) 
Shareholders' net income ($ million)      2,036     3,918                (48%) 
Earnings per ADS ($)                       3.61      6.65                (46%) 
Earnings per share ($)                     1.81      3.32                (45%) 
EBITDA* ($ million)                       3,052     4,865                (37%) 
EBITDA margin (% of net sales)            24.4%     32.7% 
 
 

*EBITDA in 12M 2024 includes a $107 million loss from the provision for the ongoing litigation related to the acquisition of a participation in Usiminas. If this charge was not included EBITDA would have amounted to $3,159 million, or 25.2% of sales.

Our sales in 2024 amounted to $12.5 billion with a decrease of 16% compared to 2023, primarily reflecting a decline in market prices for our tubular products used in onshore drilling applications in the Americas, lower drilling activity in Mexico and Colombia, lower shipments for pipeline projects in Argentina and lower sales of mechanical pipes in Europe. On the other hand, sales in the Middle East reached a record level as Saudi Aramco replenished OCTG stocks and increased gas drilling activity. EBITDA and margins also declined to $3.1 billion, being further affected by a $107 million loss from a provision for the ongoing litigation related to the acquisition of a participation in Usiminas. Net income amounted to $2.1 billion, or 17% of net sales, and was affected by a reduction of $43 million from our participation in Ternium related to the same case.

Cash flow provided by operating activities amounted to $2.9 billion during 2024. This was used to fund capital expenditures of $694 million, with the remainder distributed to shareholders through dividend payments of $758 million and share buybacks for $1,440 million in the year. We maintained a net cash position of $3.6 billion at the end of December 2024.

Change of Chief Financial Officer

Effective as of May 2, 2025, Mr. Carlos Gomez Alzaga will assume the position of Chief Financial Officer, replacing Ms. Alicia Mondolo, who will retire from this role.

Mr. Gomez Alzaga, who has more than 20 years of experience in Administration and Finance at Tenaris, previously served as Regional CFO for Mexico and Central America, and Economic and Financial Planning Director, among other positions, and currently holds the position of Regional CFO for Argentina and South America.

Ms. Mondolo will continue to serve as senior advisor to our Chairman and CEO.

Paolo Rocca and the Board of Tenaris would like to express their gratitude and appreciation for Alicia's contribution as CFO of Tenaris and her 41 years of service within the Techint Group.

Market Background and Outlook

Oil prices remain relatively stable (as they have done over the past two years) with OPEC+ maintaining their voluntary production cuts in the face of limited global demand growth. European and US natural gas prices have, however, risen as relatively cold winter weather and the cutoff of Russian supply have led to a rapid drawdown in inventories.

These prices and the continuing balance between oil and gas demand and supply should continue to support overall investment in oil and gas drilling activity, as well as OCTG demand, at current levels, albeit with some regional nuances.

In North America, consolidation among major operators and drilling efficiencies led to a drop in US drilling activity last year, which has now stabilized, while OCTG consumption per rig has been increasing. In Latin America, drilling activity is increasing in Argentina, as investment in pipeline and LNG infrastructure investment for the Vaca Muerta shale moves forward, while, in Mexico, it has been affected by financial constraints on Pemex. In the Middle East, some reduction in oil drilling has taken place in Saudi Arabia while gas drilling has risen, and, in Abu Dhabi, oil drilling is increasing.

OCTG reference prices in North America, which fell steadily for two years until the second half of 2024, have so far recovered by 9% from their August low and could rise further following the US government's announced reset of Section 232 tariffs on all imports of steel products without exception.

In this environment, we expect our sales and EBITDA (excluding extraordinary effects) in the first quarter to be in line with the previous one before rising moderately in the second quarter. Beyond that, likely changes in US tariffs and their possible ramifications on trade flows will introduce a new dynamic with a high level of uncertainty for costs and prices to our results.

Annual Dividend Proposal

Upon approval of the Company's annual accounts in April 2025, the board of directors intends to propose, for approval of the annual general shareholders' meeting to be held on May 6, 2025, the payment of a dividend per share of $0.83 (in an aggregate amount of approximately $0.9 billion), which would include the interim dividend per share of $0.27 (approximately $0.3 billion) paid in November 2024. If the annual dividend is approved by the shareholders, a dividend of $0.56 per share ($1.12 per ADS), or approximately $0.6 billion, will be paid according to the following timetable:

   -- Payment date: May 21, 2025 
 
   -- Record date: May 20, 2025 
 
   -- Ex-dividend for securities listed in Europe and Mexico: May 19, 2025 
 
   -- Ex-dividend for securities listed in the United States: May 20, 2025 

Analysis of 2024 Fourth Quarter Results

Tubes

The following table indicates, for our Tubes business segment, sales volumes of seamless and welded pipes for the periods indicated below:

 
Tubes Sales volume (thousand metric tons)  4Q 2024   3Q 2024      4Q 2023 
                                           -------  ----------  ------------ 
Seamless                                       748  746     0%    760   (2%) 
Welded                                         164  191  (14%)    246  (33%) 
Total                                          913  937   (3%)  1,006   (9%) 
 
 

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February 19, 2025 16:29 ET (21:29 GMT)