Tenaris Announces 2025 First Quarter Results

The financial and operational information contained in this press release is based on unaudited consolidated condensed interim financial statements presented in U.S. dollars and prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board and adopted by the European Union, or IFRS. Additionally, this press release includes non-IFRS alternative performance measures i.e., EBITDA, Free Cash Flow, Net cash / debt and Operating working capital days. See exhibit I for more details on these alternative performance measures. LUXEMBOURG, April 30, 2025 (GLOBE NEWSWIRE) -- Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) (“Tenaris”) today announced its results for the quarter ended March 31, 2025 in comparison with its results for the quarter ended March 31, 2024. Summary of 2025 First Quarter Results (Comparison with fourth and first quarter of 2024) 1Q 20254Q 20241Q 2024 Net sales ($ million)2,9222,8453%3,442(15%)Operating income ($ million)550558(2%)812(32%)Net income ($ million)5185190%750(31%)Shareholders’ net income ($ million)507516(2%)737(31%)Earnings per ADS ($)0.940.940%1.27(26%)Earnings per share ($)0.470.470%0.64(26%)EBITDA* ($ million)696726(4%)987(29%)EBITDA margin (% of net sales)23.8%25.5% 28.7% *EBITDA in the fourth quarter of 2024 included a $67 million gain from the partial reversal of a provision for the ongoing litigation related to the acquisition of a participation in Usiminas. If this charge was not included EBITDA would have amounted to $659 million, or 23.2% of sales. In the first quarter, our sales were buoyed by seasonal volumes in Canada and higher onshore sales in the USA while our average selling price declined. This was due to market and product mix effects with lower sales of OCTG premium products in Mexico, Turkey and Saudi Arabia and lower sales of seamless line pipe for offshore projects. On a comparable basis our EBITDA rose 6% and net income remained in line with the results of the previous quarter. During the quarter, free cash flow amounted to $647 million following a reduction in working capital of $224 million. After spending $237 million on share buybacks, our net cash position increased to $4.0 billion at March 31, 2025. Market Background and Outlook Oil and gas drilling activity has been stable in most parts of the world so far this year. Over the last month, however, the outlook for oil demand and prices has changed with a decline in expectations for global economic growth and the announcement by OPEC+ that it would increase production. Oil and gas companies are likely to adjust their investment plans over the short term in response to a lower oil and gas price environment while maintaining their medium and long term plans for development of major projects. US OCTG reference prices have continued to increase following the extension of tariffs to imports of all steel products. These and further increases should offset much of the impact of the tariffs and higher steel and scrap purchase costs on our US operations. For the second quarter, we expect our sales to show a small increase as our average selling price recovers and volumes remain close to the level of the first quarter and our EBITDA margin should be in line with the first quarter. Analysis of 2025 First Quarter Results Tubes The following table indicates, for our Tubes business segment, sales volumes of seamless and welded pipes for the periods indicated below: Tubes Sales volume (thousand metric tons)1Q 20254Q 20241Q 2024Seamless7757484%7770%Welded21216429%269(21%)Total9879138%1,046(6%) The following table indicates, for our Tubes business segment, net sales by geographic region, operating income and operating income as a percentage of net sales for the periods indicated below: Tubes1Q 20254Q 20241Q 2024Net sales ($ million) North America1,2441,13110%1,590(22%)South America552595(7%)617(11%)Europe208341(39%)253(17%)Asia Pacific, Middle East and Africa76162921%833(9%)Total net sales ($ million)2,7652,6953%3,292(16%)Services performed on third party tubes ($ million)101939%192(47%)Operating income ($ million)514533(4%)785(35%)Operating margin (% of sales)18.6%19.8% 23.9% Net sales of tubular products and services increased 3% sequentially and decreased 16% year on year. Volumes sold increased 8% sequentially while average selling prices decreased 5% due principally to product and market mix effects. In North America sales increased as higher seasonal sales in Canada and higher sales to US Rig Direct® customers more than outweighed a further steep decline in sales in Mexico. In South America sales declined due to lower shipments to the Raia offshore project and lower prices in Argentina. In Europe, following a quarter with an exceptionally high level of sales, sales declined to a more stable level. In Asia Pacific, Middle East and Africa sales increased due to higher sales in the UAE, shipments of welded pipes for a pipeline in Saudi Arabia, and sales of line pipe for a gas processing plant in Africa. Operating results from tubular products and services amounted to a gain of $514 million in the first quarter of 2025 compared to a gain of $533 million in the previous quarter and a gain of $785 million in the first quarter of 2024. Operating income in the fourth quarter of 2024 included a $67 million gain from the partial reversal of a provision for the ongoing litigation related to the acquisition of a participation in Usiminas. Excluding this gain Tubes operating income would have amounted to $467 million (17.3% of sales) in the fourth quarter of 2024. On a comparable basis, margins improved as the decline in average selling prices was offset by lower costs due to higher utilization of production capacity and lower raw materials and variable costs. Others The following table indicates, for our Others business segment, net sales, operating income and operating income as a percentage of net sales for the periods indicated below: Others1Q 20254Q 20241Q 2024Net sales ($ million)1571505%1504%Operating income ($ million)362544%2638%Operating margin (% of sales)23.1%16.8% 17.5% Net sales of other products and services increased 5% sequentially and increased 4% year on year. Sequentially, sales increased mainly due to higher sales of sucker rods and oil services in Argentina. Selling, general and administrative expenses, or SG&A, amounted to $457 million, or 15.6% of net sales, in the first quarter of 2025, compared to $446 million, or 15.7% in the previous quarter and $508 million, or 14.8% in the first quarter of 2024. Sequentially, the increase in SG&A is mainly due to higher shipment costs partially offset by a decrease in taxes, provisions and others. Other operating results amounted to a gain of $6 million in the first quarter of 2025, compared to a gain of $81 million in the previous quarter and a $12 million gain in the first quarter of 2024. The fourth quarter of 2024 included a $67 million gain from the partial reversal of a provision for the ongoing litigation related to the acquisition of a participation in Usiminas. Financial results amounted to a gain of $35 million in the first quarter of 2025, compared to a gain of $48 million in the previous quarter and a loss of $25 million in the first quarter of 2024. Financial result of the quarter is mainly attributable to a $67 million net finance income from the net return of our portfolio investments offset by net foreign exchange losses of $15 million and $16 million in fees paid in connection with the collection of $242 million from Pemex. Equity in earnings of non-consolidated companies generated a gain of $14 million in the first quarter of 2025, compared to a gain of $35 million in the previous quarter and a gain of $48 million in the first quarter of 2024. These results are mainly derived from our participation in Ternium (NYSE:TX). During the fourth quarter of 2024 the result from Ternium´s investment included a $43 million gain from the partial reversal of a provision for the ongoing litigation related to the acquisition of a participation in Usiminas, while in the first quarter of 2025 it includes a $5 million loss related to the same ongoing litigation. Income tax charge amounted to $81 million in the first quarter of 2025, compared to $123 million in the previous quarter and $85 million in the first quarter of 2024. The quarter income tax charge reflects the positive net effect from foreign exchange rate movements and inflation adjustments on deferred tax assets and liabilities, mainly in Argentina, and the recognition of other deferred tax assets. Cash Flow and Liquidity of 2025 First Quarter Net cash generated by operating activities during the first quarter of 2025 was $821 million, compared to $492 million in the previous quarter and $887 million in the first quarter of 2024. During the first quarter of 2025 cash generated by operating activities includes a net working capital reduction of $224 million. With capital expenditures of $174 million, our free cash flow amounted to $647 million during the quarter. Following share buybacks of $237 million in the quarter, our net cash position increased to $4.0 billion at March 31, 2025. Conference call Tenaris will hold a conference call to discuss the above reported results, on May 1, 2025, at 08:00 a.m. (Eastern Time). Following a brief summary, the conference call will be opened to questions. To listen to the conference please join through one of the following options: ir.tenaris.com/events-and-presentations or https://edge.media-server.com/mmc/p/gu6ip3ag/ If you wish to participate in the Q&A session please register at the following link: https://register-conf.media-server.com/register/BIf49770ff47c94e2587121e780b6acb85 Please connect 10 minutes before the scheduled start time. A replay of the conference call will also be available on our webpage at: ir.tenaris.com/events-and-presentations Some of the statements contained in this press release are “forward-looking statements”. Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to future oil and gas prices and their impact on investment programs by oil and gas companies. Consolidated Condensed Interim Income Statement (all amounts in thousands of U.S. dollars)Three-month period ended March 31, 20252024 UnauditedNet sales2,922,2123,441,544Cost of sales(1,920,855)(2,134,052)Gross profit1,001,3571,307,492Selling, general and administrative expenses(457,065)(508,132)Other operating income11,78816,024Other operating expenses(6,167)(3,720)Operating income549,913811,664Finance Income78,44456,289Finance Cost(11,745)(20,583)Other financial results, net(31,441)(60,468)Income before equity in earnings of non-consolidated companies and income tax585,171786,902Equity in earnings of non-consolidated companies14,03548,179Income before income tax599,206835,081Income tax(81,342)(84,856)Income for the period517,864750,225 Attributable to: Shareholders' equity506,931736,980Non-controlling interests10,93313,245 517,864750,225 Consolidated Condensed Interim Statement of Financial Position (all amounts in thousands of U.S. dollars)At March 31, 2025 At December 31, 2024 Unaudited ASSETS Non-current assets Property, plant and equipment, net6,183,251 6,121,471 Intangible assets, net1,359,463 1,357,749 Right-of-use assets, net147,606 148,868 Investments in non-consolidated companies1,574,156 1,543,657 Other investments1,014,502 1,005,300 Deferred tax assets838,912 831,298 Receivables, net197,41111,315,301 205,60211,213,945Current assets Inventories, net3,519,237 3,709,942 Receivables and prepayments, net174,294 179,614 Current tax assets360,416 332,621 Contract assets51,736 50,757 Trade receivables, net1,842,313 1,907,507 Derivative financial instruments4,083 7,484 Other investments2,581,761 2,372,999 Cash and cash equivalents770,2089,304,048 675,2569,236,180Total assets 20,619,349 20,450,125EQUITY Shareholders' equity 17,164,683 16,593,257Non-controlling interests 231,994 220,578Total equity 17,396,677 16,813,835LIABILITIES Non-current liabilities Borrowings7,437 11,399 Lease liabilities91,148 100,436 Deferred tax liabilities472,789 503,941 Other liabilities300,116 301,751 Provisions68,969940,459 82,106999,633Current liabilities Borrowings345,183 425,999 Lease liabilities54,061 44,490 Derivative financial instruments1,945 8,300 Current tax liabilities304,019 366,292 Other liabilities377,238 585,775 Provisions139,965 119,344 Customer advances228,086 206,196 Trade payables831,7162,282,213 880,2612,636,657Total liabilities 3,222,672 3,636,290Total equity and liabilities 20,619,349 20,450,125 Consolidated Condensed Interim Statement of Cash Flows (all amounts in thousands of U.S. dollars)Three-month period ended March 31, 20252024 (Unaudited) Cash flows from operating activities Income for the period517,864750,225Adjustments for: Depreciation and amortization146,406175,442Provision for the ongoing litigation related to the acquisition of participation in Usiminas9,877-Income tax accruals less payments(54,133)(29,222)Equity in earnings of non-consolidated companies(14,035)(48,179)Interest accruals less payments, net(8,423)11,938Changes in provisions(2,393)1,545Changes in working capital223,817(9,548)Others, including net foreign exchange2,02034,776Net cash provided by operating activities821,000886,977 Cash flows from investing activities Capital expenditures(173,838)(172,097)Changes in advances to suppliers of property, plant and equipment12,9162,952Loan to joint ventures(1,359)(1,354)Proceeds from disposal of property, plant and equipment and intangible assets9005,412Changes in investments in securities(225,636)(759,667)Net cash used in investing activities(387,017)(924,754) Cash flows from financing activities Changes in non-controlling interests-1,120Acquisition of treasury shares(237,188)(311,064)Payments of lease liabilities(14,655)(16,768)Proceeds from borrowings347,570829,947Repayments of borrowings(429,126)(754,078)Net cash used in financing activities(333,399)(250,843) Increase (decrease) in cash and cash equivalents100,584(288,620) Movement in cash and cash equivalents At the beginning of the period660,7981,616,597Effect of exchange rate changes(2,430)(4,921)Increase (decrease) in cash and cash equivalents100,584(288,620)At March 31,758,9521,323,056 Exhibit I – Alternative performance measures Alternative performance measures should be considered in addition to, not as substitute for or superior to, other measures of financial performance prepared in accordance with IFRS. EBITDA, Earnings before interest, tax, depreciation and amortization. EBITDA provides an analysis of the operating results excluding depreciation and amortization and impairments, as they are recurring non-cash variables which can vary substantially from company to company depending on accounting policies and the accounting value of the assets. EBITDA is an approximation to pre-tax operating cash flow and reflects cash generation before working capital variation. EBITDA is widely used by investors when evaluating businesses (multiples valuation), as well as by rating agencies and creditors to evaluate the level of debt, comparing EBITDA with net debt. EBITDA is calculated in the following manner: EBITDA = Net income for the period + Income tax charges +/- Equity in Earnings (losses) of non-consolidated companies +/- Financial results + Depreciation and amortization +/- Impairment charges/(reversals). EBITDA is a non-IFRS alternative performance measure. (all amounts in thousands of U.S. dollars)Three-month period ended March 31, 20252024Income for the period517,864750,225Income tax charge81,34284,856Equity in earnings of non-consolidated companies(14,035)(48,179)Financial Results(35,258)24,762Depreciation and amortization146,406175,442EBITDA696,319987,106 Free Cash Flow Free cash flow is a measure of financial performance, calculated as operating cash flow less capital expenditures. FCF represents the cash that a company is able to generate after spending the money required to maintain or expand its asset base. Free cash flow is calculated in the following manner: Free cash flow = Net cash (used in) provided by operating activities - Capital expenditures. Free cash flow is a non-IFRS alternative performance measure. (all amounts in thousands of U.S. dollars)Three-month period ended March 31, 20252024Net cash provided by operating activities821,000886,977Capital expenditures(173,838)(172,097)Free cash flow647,162714,880 Net Cash / (Debt) This is the net balance of cash and cash equivalents, other current investments and fixed income investments held to maturity less total borrowings. It provides a summary of the financial solvency and liquidity of the company. Net cash / (debt) is widely used by investors and rating agencies and creditors to assess the company’s leverage, financial strength, flexibility and risks. Net cash/ debt is calculated in the following manner: Net cash = Cash and cash equivalents + Other investments (Current and Non-Current)+/- Derivatives hedging borrowings and investments - Borrowings (Current and Non-Current). Net cash/debt is a non-IFRS alternative performance measure. (all amounts in thousands of U.S. dollars)At March 31, 20252024Cash and cash equivalents770,2081,323,350Other current investments2,581,7612,248,863Non-current investments1,007,444976,206Current borrowings(345,183)(608,278)Non-current borrowings(7,437)(28,122)Net cash / (debt)4,006,7933,912,019 Operating working capital days Operating working capital is the difference between the main operating components of current assets and current liabilities. Operating working capital is a measure of a company’s operational efficiency, and short-term financial health. Operating working capital days is calculated in the following manner: Operating working capital days = [(Inventories + Trade receivables – Trade payables – Customer advances) / Annualized quarterly sales ] x 365. Operating working capital days is a non-IFRS alternative performance measure. (all amounts in thousands of U.S. dollars)At March 31, 20252024Inventories3,519,2373,911,719Trade receivables1,842,3132,303,293Customer advances(228,086)(239,342)Trade payables(831,716)(1,041,434)Operating working capital4,301,7484,934,236Annualized quarterly sales11,688,84813,766,176Operating working capital days134131 Giovanni SardagnaTenaris 1-888-300-5432www.tenaris.com

Tenaris Announces 2025 First Quarter Results

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