Q1 2025 Tenaris SA Earnings Call Transcript
Key Points
- Tenaris SA (TS) reported a sequential increase in sales by 3% due to higher seasonal volumes in Canada and increased onshore sales in the US.
- The company's EBITDA rose by 6% on a comparable basis, with a slight increase in the EBITDA margin to 24%, attributed to good operating performance and better absorption of fixed costs.
- Free cash flow for the quarter was strong at $647 million, supported by operating cash flow of $821 million and capital expenditure of $174 million.
- Tenaris SA (TS) increased its net cash position to $4 billion, up from $3.6 billion at the end of the previous year, despite share buybacks of $237 million.
- The company has a solid project backlog for offshore projects and expects further opportunities with new FID sanctions anticipated in 2026.
- Fourth quarter sales were down 15% year-on-year, with a decline in average selling prices due to market and product mix effects.
- There is uncertainty regarding the macroeconomic and geopolitical situation, which could lead to a slowdown in North American shale drilling activity if oil prices remain low.
- The implementation of US tariffs on steel is expected to impact operating results, with an estimated $70 million per quarter in additional tariff costs.
- The company anticipates a potential reduction in activity levels in the US, particularly in oil production, due to lower oil prices.
- The situation with Pemex in Mexico remains challenging, with a significant reduction in rig operations and production levels, impacting Tenaris SA (TS)'s operations in the region.
Good day and thank you for standing by. Welcome to the Tenaris first quarter 2025 earnings call.
(Operator Instructions).
I would now like to turn the conference over to Giovanni Sardagna, Investor relations officer. Please go ahead.
Thank you and welcome to Tenaris 2025, First quarter conference call.
Before we start, I would like to remind you that we will be discussing information in the call and that the actual results may vary from those expressed to reply during this call.
With me on the call today are Paolo Rocca, our Chairman and CEO; Alicia Mondolo, our Chief Financial Officer; Gabriel Podskubka, our Chief Operating Officer, and Guillermo Moreno, newly appointed President of our US operations.
Before passing over the call to Paolo for his opening remarks, I would like to briefly commend our quarterly results.
Our fourth quarter sales reached $2.9 billion, down 15% year on year, but up 3% sequentially due to higher seasonal volumes in
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