Q2 2026 Tenaris SA Earnings Call Transcript
Key Points
- Tenaris SA (TS) demonstrated resilience in Q2 2026 despite Middle East disruptions, maintaining strong operational performance and global positioning.
- The company increased its interim dividend to $600 million, doubling the previous rate, reflecting a strong balance sheet and sustained cash generation.
- Tenaris SA (TS) is investing in growth, including a $230 million program to expand Canadian mill capacity and adding worksheets at US facilities to meet rising demand.
- The company has a growing offshore project backlog, with new contracts like the Kronos project and GranMorgu, expected to boost sales from Q4 2026 into 2027.
- US drilling activity is up nearly 10% since the start of the Iran conflict, with expectations for further rig additions and price increases, benefiting Tenaris SA (TS)'s North American operations.
- Tenaris SA (TS) maintains a strong net cash position of $3.6 billion, providing financial flexibility for future growth and shareholder returns.
- Tenaris SA (TS)'s Q2 2026 sales decreased 4% year-on-year and sequentially due to the closure of the Strait of Hormuz, postponing shipments to Iraq, Kuwait, and Qatar.
- Quarterly EBITDA fell 12% sequentially to $649 million, impacted by lower fixed cost absorption and higher raw material and logistics costs.
- The company faces ongoing uncertainty from the Middle East conflict, with $130 million in backlog for the upper Gulf region excluded from base-case forecasts.
- Q3 2026 is expected to remain weak, with similar revenue and EBITDA margins to Q2, due to continued logistics disruptions and seasonal shutdowns in Europe.
- The start of the Sakarya pipeline project, with below-average margins, will negatively impact product mix in Q3 2026.
- Raw material costs have increased and are progressively impacting sales, though price increases are expected to offset this in Q4.
Good day, and thank you for standing by. Welcome to the second quarter Tenaris SA earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Giovanni Sardagna, Investor Relations Officer. Please go ahead.
Thank you, Carmen, and welcome to Tenaris 2026 second quarter conference call. Before we start, I would like to remind you that we will be discussing forward-looking information in the call and that our actual results may vary from those expressed or implied during this call.
With me on the call today are Gabriel Podskubka, our Chief Executive Officer; Carlos Gomez Alzaga, our Chief Financial Officer; and Guillermo Moreno, President of our US Operations.
Before passing over the call to Gabriel for his opening remarks, I would like to briefly comment our quarterly results. Our second-quarter sales reached $3 billion, down 4% year-on-year and sequentially,
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