Tenaris S.A.(US:TS)2025-04-01 19:49Financial Performance - For the year, Tenaris reported EBITDA of $3.1 billion, net income of $2.1 billion, and net sales of $12.5 billion, with free cash flow of $2.2 billion distributed to shareholders through dividends and share buybacks [23]. - The company proposed a 38% increase in the annual dividend per share compared to the previous year, while maintaining a net cash position of $3.6 billion [23]. - The company’s dividend payments depend on the operational results and financial condition of its subsidiaries, which could be restricted by legal or contractual limitations [131]. - The company’s ability to pay dividends is subject to Luxembourg law, which requires dividends to be paid out of net profits and retained earnings [133]. Operational Developments - Tenaris has strengthened its service differentiation in North America, providing 24/7 digital well integrity solutions and extending its range of Wedge Series 400™ connections [24]. - The company completed several investments aimed at improving operational efficiency and reducing environmental impact, including new electric arc furnaces and modernization of facilities [30]. - Tenaris is advancing its target to reduce carbon emissions and is constructing a second wind farm in Argentina to increase renewable energy usage [32]. - Tenaris is expanding its Rig Direct services globally, integrating operations with customers to reduce costs and improve efficiency [155]. Market Position and Strategy - The company received the 2024 supplier of the year award from ExxonMobil for its supply chain integration efforts and has secured long-term agreements for US shale operations [25]. - Tenaris established a leading position in 20K projects in the US deepwater, with awards from Shell and BP for casing supply and product testing [26]. - The company consolidated its position in the Guyana-Suriname basin by supplying line pipe and insulation coating for Total's GranMorgu development [27]. - In Saudi Arabia, Tenaris won a tender for a major CCS pipeline and extended its long-term agreement with ADNOC in Abu Dhabi [28]. Regulatory and Environmental Challenges - The company faces increased regulatory requirements related to GHG emissions, including the EU Carbon Border Adjustment Mechanism adopted on May 17, 2023, which could affect demand for its products [56]. - The SEC adopted climate-related disclosure rules in March 2024, which would require expanded climate-related disclosures, although implementation was voluntarily stayed [57]. - The company is exposed to physical risks from climate change, including extreme weather events that could disrupt operations and financial results [61]. - The company faces regulatory uncertainties in Mexico due to recent constitutional reforms impacting energy supply and cost structure [80]. Economic and Geopolitical Factors - The company is significantly impacted by the volatility in international oil and gas prices, which affects sales and profitability [53]. - The United States imposed a 25% tariff on steel imports from all countries, effective early 2025, affecting market prices and supply chains [69]. - Argentina's new administration announced emergency measures in December 2023, including cuts in public spending and labor reforms, which may impact demand for the company's products [76]. - The Argentine peso has devalued by over 100% since December 2023, with a "crawling peg" policy in place, potentially affecting the company's financial condition [77]. Cybersecurity and Compliance - Cybersecurity threats have increased significantly, with a reported 2.75 times rise in human-operated ransomware attacks, highlighting vulnerabilities in the company's information systems [123]. - The company has implemented cybersecurity awareness campaigns and training programs to enhance resilience against cyber threats [125]. - The company does not currently maintain cybersecurity insurance, which may expose it to financial risks from cyber threats [128]. - The company is committed to compliance with anti-corruption laws, facing risks of investigations and penalties that could impact sales and profitability [107]. Production Capacity and Facilities - Tenaris's effective annual production capacity for seamless tubes is 4,677 thousand tons, with actual production at 3,229 thousand tons in 2023, reflecting a slight increase from 3,188 thousand tons in 2022 [175]. - The company acquired the global pipe coating business of Mattr at the end of 2023, enhancing its range of pipe coating technologies [152]. - The Bay City facility in Texas represents a $1.8 billion investment, featuring a seamless mill with a capacity of 757,000 tons per year [180]. - The company operates an integrated network of steel pipe manufacturing, research, finishing, and service facilities across the Americas, Europe, the Middle East, Asia, and Africa [141].