Tenaris S.A.(US:TS)2026-02-19 13:32Financial Data and Key Metrics Changes - In Q4 2025, sales reached $3 billion, a 5% increase year-over-year and a 1% increase sequentially, driven by resilient sales to rig direct customers in the U.S. and Canada [4] - EBITDA for the quarter was $717 million, down 5% sequentially, representing 24% of sales, impacted by 50% Section 232 tariffs in the U.S. [4] - The net cash position decreased to $3.3 billion after dividend payments, share buybacks, and capital expenditures [5] - The company proposed an annual dividend of $0.89 per share, a 7% increase compared to the previous year [6] Business Line Data and Key Metrics Changes - Average selling prices in the tube operating segment decreased by 1% year-over-year and were flat sequentially [4] - The U.S. production and supply chain system achieved a record level of production, with 90% of U.S. sales coming from this system [10] Market Data and Key Metrics Changes - In the U.S. and Canada, the oil and gas industry saw consolidation and productivity improvements, with a lower rig count impacting operations [9] - In Latin America, domestic companies raised over $4 billion for infrastructure and production expansion in the Vaca Muerta fields [12] - The Middle East saw a long-term agreement for OCTG supply to Qatar's Northwest Field development, with enhanced Rig Direct services in the UAE [13] Company Strategy and Development Direction - The company aims to enhance operational efficiency and digital integration while reducing environmental impact [13][14] - Tenaris is focusing on offshore projects and expects to renew its order backlog as new offshore projects are sanctioned globally [11] - The company is investing in expanding its fracking and coiled tubing service business in Argentina [12] Management's Comments on Operating Environment and Future Outlook - Management noted the resilience of operations amid geopolitical disruptions and lower activity in key markets, with a stable performance expected in Q1 2026 [8][19] - The company anticipates a gradual increase in drilling activity in Argentina in the second half of 2026, driven by increased investment confidence [44] - Management expressed caution regarding long-term forecasts due to market volatility but indicated a stable outlook for margins and results in the near term [19][20] Other Important Information - The company is actively monitoring pricing pressures in international markets, with stability observed in premium products [29] - The company is assessing competitive dynamics in Argentina following a tender loss to an Indian company, considering potential anti-dumping actions [87] Q&A Session Questions and Answers Question: Outlook for Q1 and beyond - Management indicated relative stability in performance for Q1, with results expected to be in line with Q4 [19] Question: Margin resilience and tariff impacts - Management noted ongoing efficiency improvements and expected a slight reduction in tariff impacts in Q1 [22][23] Question: Pricing pressure in international markets - Management observed stability in premium product pricing, with some pressure in lower-end applications [30] Question: Buyback philosophy - Management confirmed ongoing share buyback programs, with decisions to be made based on cash availability and market conditions [36] Question: Pipe Logix pricing indices - Management discussed the impact of welded pipe imports on pricing indices and anticipated a gradual alignment with higher hot-rolled coil prices [41][42] Question: Argentina's market dynamics - Management highlighted increased investment confidence post-elections and expected a gradual increase in drilling activity in 2026 [44][46] Question: Venezuela opportunities - Management indicated potential for $50 million in revenue from Venezuela in 2026, with upside potential depending on market developments [90] Question: Middle East and Mexico outlook - Management noted ongoing high activity levels in the Middle East and gradual improvements in Pemex's situation in Mexico [100][98]