Financial Data and Key Metrics Changes - Third quarter sales reached $3 billion, up 2% year on year but down 3% sequentially, primarily due to lower sales to the North Sea and reduced shipments for offshore line pipe projects in the Middle East [3] - EBITDA for the quarter was $753 million, up 3% sequentially, with an EBITDA margin of 25%. Excluding a one-off gain of $34 million, EBITDA would have been $719 million or 24% of sales [3] - Operating cash flow was $318 million, capital expenditure was $185 million, resulting in free cash flow of $133 million. After share buybacks of $351 million, the net cash position declined to $3.5 billion [4] Business Line Data and Key Metrics Changes - Average selling prices in the tubes operating segment decreased by 1% compared to the same quarter last year and sequentially [3] - The company maintained sales levels due to the strength of its customer portfolio, particularly in the U.S. and Canada, despite a slowdown in overall rig activity [7] Market Data and Key Metrics Changes - The company has increased production in the U.S. and Canada to ensure a reliable supply of high-quality products, with around 90% of U.S. sales of OCTG produced domestically [8] - The demand for electric energy is accelerating globally, with the production line for boiler and heat exchanger pipes in Europe operating at full capacity [12] Company Strategy and Development Direction - The company is focusing on increasing production in the U.S. and Canada to mitigate the impact of high tariff rates and trade restrictions [8] - A new service yard was opened in British Columbia to extend the scope of Rig Direct services, and production in Sault Ste. Marie is ramping up to support this operation [10] - The company is building a strong offshore order backlog for deliveries starting mid-next year, particularly for projects in Suriname and the Black Sea [11] Management's Comments on Operating Environment and Future Outlook - Management views the recent Argentinian elections as a turning point that could stimulate investment in the energy sector, particularly in the Vaca Muerta shale play [16][19] - The company expects an increase in the number of rigs operating in Argentina and a gradual rise in investment in energy projects [19] - Management anticipates that margins may trend lower in the fourth quarter due to the impact of tariffs on costs, with expected EBITDA in the range of single digits lower than the previous quarter [37][40] Other Important Information - The board approved an interim dividend of $0.29 per share, a 7% increase compared to the previous year [6] - The company has started operations at a new 95 megawatt wind farm, contributing to its sustainability goals [12] Q&A Session Summary Question: Implications of Argentinian elections on Tenaris - Management indicated that the elections marked a significant turning point, enhancing investor perception and access to financing for oil companies, which could stimulate investment in the energy sector [16][19] Question: Outlook for margins in the fourth quarter - Management acknowledged the impact of tariffs on costs and expected EBITDA to be lower, with margins anticipated to be slightly lower than in the third quarter [37][40] Question: Trends in sales and market share in North America - Management noted that clients are gaining market share due to their resilience and efficiency, despite lower rig counts [56] Question: Update on inventory levels and imports - Management confirmed that inventory levels are higher for welded pipes than seamless, with expectations for both to decrease [92] Question: Update on oil field services in Argentina - Management expects an increase in fracking operations and sales of pipes and services in Argentina due to improved access to financing [98] Question: Developments in Mexico and Petrobras contracts - Management highlighted positive developments in Mexico and increasing drilling activity by Petrobras, which will contribute to future sales [100]

Core Insights - Canada's implementation of the tariff rate quota (TRQ) system is reshaping the market for oil country tubular goods (OCTG) and linepipe, leading to tighter import channels and higher costs [1] - Rystad Energy anticipates mild upward pressure on Canadian OCTG and linepipe prices in the medium term due to increasing demand from pipeline projects and competition for limited import quotas [1] TRQ System Overview - The TRQ system was implemented in two stages: on June 27 for non-Free Trade Agreement (FTA) countries and on August 1 for FTA exporters, excluding the US and Mexico [2] - The policy aims to protect domestic producers from diverted steel flows due to US tariffs and prioritize Canadian-made materials for government projects [2] - Quarterly quota volumes are modest, with 7,816 tonnes for OCTG from non-FTA origins and 5,086 tonnes for large-diameter linepipe, alongside punitive 50% surtaxes on overages [2] Market Dynamics - The TRQ structure creates significant risks for suppliers and buyers, as import permits are allocated in real time without clear visibility, complicating shipment control [3] - Suppliers are now issuing dual-price offers to manage uncertainty, reflecting standard costs and potential surcharges if shipments exceed quotas [3] - The TRQ regime applies to products not manufactured in Canada, leading to higher costs and reduced flexibility for domestic buyers [4] Price Stability and Future Outlook - Despite challenges, OCTG and linepipe prices in Canada have remained stable, supported by controlled inventory levels and disciplined pricing [5] - Volatility is expected to increase as quotas near exhaustion, particularly during high-demand quarters, with qualification requirements making substitution difficult for OCTG [5] - Large-diameter project tenders could quickly deplete linepipe quotas, pushing buyers towards domestic mills or incurring surcharges, thereby establishing a firmer domestic price floor [5]