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01/11 03:08
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights mixed signals: financial performance shows a decline in sales but an increase in EBITDA and net cash position, indicating operational efficiency. However, macroeconomic uncertainties, potential impacts from low oil prices, and tariff challenges create concerns. The Q&A reveals high uncertainty and management's vague responses about future impacts, particularly regarding oil prices and Pemex. Share buybacks are a positive factor, but overall, the lack of clear guidance and potential risks balance the positives, leading to a neutral sentiment.
Sales $2.9 billion, down 15% year-on-year due to lower sales of OCTG premium products in Mexico, Turkey, and Saudi Arabia, as well as lower sales of seamless line pipe for offshore projects.
Average Selling Price Decreased 11% year-on-year and 5% sequentially due to market and product mix effects.
EBITDA Rose 6% year-on-year, with EBITDA margin slightly increasing to 24% due to good operating performance and better absorption of fixed and semi-fixed costs.
Operating Cash Flow $821 million, reflecting improved cash generation.
Capital Expenditure $174 million, indicating ongoing investment in operations.
Free Cash Flow $647 million, resulting from a significant reduction in working capital.
Net Cash Position Increased to $4 billion, up from $3.6 billion at the end of last year, following share buybacks of $237 million.
New Product Launches: We began pipe deliveries for the new project which will add 550,000 barrels a day of additional oil export capacity and is expected to come into operation next year.
Service Expansion: We are expanding our new fracking and coil tubing service unit with an investment in a third set of equipment which should come into operation next year.
Product Qualification: We achieved recent success in qualifying products for high pressure 20k deep water project in the US with Shell and BP.
Market Expansion: In Australia, we received a multi-year award from Chevron to supply the backfilled wells for Gorgon and Wheatstone projects.
New Contracts: We commenced a pipe shipment for a major gas processing facility in Algeria.
Operational Efficiency: We achieved a significant reduction in working capital.
Sales Performance: We delivered quarter-on-quarter increase in sales and EBITDA on a comparable basis.
Management Change: Guillermo Moreno has taken the position of President of our US operation.
Long-term Agreements: We have been consolidating our Rig Direct strategy with long-term agreements, providing stability and visibility in our operation.
Sales and Revenue Risks: Sales reached $2.9 billion, down 15% year-on-year, indicating potential risks in revenue generation due to market conditions.
Average Selling Price Decline: Average selling price decreased by 11% compared to Q1 2024, suggesting challenges in maintaining pricing power amid market and product mix effects.
Oil Price Dependency: If oil prices remain near or below $60 per barrel, there may be a slowdown in North American shale drilling activity, impacting demand for Tenaris's products.
Macroeconomic and Geopolitical Uncertainty: Ongoing tariff and counter-tariff announcements contribute to uncertainty in the global macroeconomic and geopolitical landscape, potentially affecting business operations.
Project Sanctioning Delays: New project sanctioning may be subject to delays due to the less favorable macroeconomic environment, impacting future revenue streams.
Supply Chain Challenges: The company is preparing for lower levels of activity, indicating potential challenges in managing supply chain and operational efficiency.
Rig Direct Strategy: Consolidating Rig Direct strategy with long-term agreements in Canada, providing stability and visibility in operations.
OCTG Shipments: Achieved record quarterly volume of OCTG shipments in Canada.
Expansion in Argentina: Began pipe deliveries for a new project expected to add 550,000 barrels a day of oil export capacity.
Fracking and Coil Tubing Services: Expanding fracking and coil tubing service unit with investment in new equipment.
Project Backlog: Solid project backlog for offshore projects, with expectations for new FID sanctions in 2026.
Product Qualification: Qualified products for high pressure 20k deep water projects in the US with Shell and BP.
Multi-Year Award: Received multi-year award from Chevron for Gorgon and Wheatstone projects in Australia.
Record Shipments to ADNOC: Achieved record quarterly shipments to ADNOC under long-term service agreement.
Gas Processing Facility in Algeria: Commenced pipe shipments for a major gas processing facility in Algeria.
Oil Price Impact: If oil prices remain near or below $60 per barrel, expect a slowdown in North American shale drilling activity.
Long-Term Outlook: Long-term outlook for the industry remains secure due to growing demand for reliable energy sources.
Preparation for Lower Activity: Preparing for lower levels of activity ahead due to less favorable macroeconomic conditions.
Customer Portfolio Resilience: Expect to demonstrate resilience and solidity of customer portfolio and supply chain.
Share Buybacks: Share buybacks of $237 million during the quarter.
The earnings call presents a mixed outlook. Financial performance shows strong sales and a positive cash position, but margins are expected to decline due to tariffs. The Q&A reveals concerns about future EBITDA impacts and uncertainties in guidance, yet there's optimism in market expansions and shareholder returns. The strategic plan indicates potential growth in 2026, but short-term challenges remain. Overall, the sentiment is balanced, leading to a neutral prediction for stock price movement.
The earnings call presents a mixed outlook. While there are positive developments like the multi-year award from Chevron and record shipments, the guidance for the second half of 2025 is weak, with expected sales declines and tariff impacts. The Q&A reveals concerns about margin pressures and uncertainties in the fourth quarter. The share buyback program is a positive factor, but the lack of clear guidance and potential for lower activity due to oil prices and tariffs balance the sentiment to neutral.
The earnings call highlights mixed signals: financial performance shows a decline in sales but an increase in EBITDA and net cash position, indicating operational efficiency. However, macroeconomic uncertainties, potential impacts from low oil prices, and tariff challenges create concerns. The Q&A reveals high uncertainty and management's vague responses about future impacts, particularly regarding oil prices and Pemex. Share buybacks are a positive factor, but overall, the lack of clear guidance and potential risks balance the positives, leading to a neutral sentiment.
The earnings call presents a mixed outlook: while there are positive aspects like increased dividends and share buybacks, there are also challenges such as decreased sales and price reductions. The Q&A reveals uncertainties regarding the impact of US policies and M&A opportunities, but management's expectation of stable margins and increased future activity provides some optimism. The absence of clear guidance on certain issues tempers the overall sentiment, leading to a neutral prediction for the stock price movement.
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