The following is a summary of the Tenaris S.A. (TS) Q1 2024 Earnings Call Transcript:
Financial Performance:
Tenaris reported Q1 sales of $3.4 billion, down 17% year-on-year, despite an increase in volume and consolidation of the coating business.
Average selling prices in Tenaris' tubes operating segment decreased by 15% compared to Q1 2023 and 6% sequentially.
EBITDA for Q1 increased 1% to $987 million with a flat margin of 29%.
The company generated an operating cash flow of $887 million and spent $172 million on capital expenditures resulting in a net free cash flow of $715 million.
The net cash position increased to $3.9 billion, up from $3.4 billion at the end of last year, indicating a steady flow of free cash despite existing investment commitments.
Business Progress:
Tenaris weathered market challenges with its strong global positioning, maintaining sales and EBITDA levels.
Its recent acquisition, TenarisShawcor, contributed positively by securing a significant ExxonMobil project.
With the rise in activity in the Middle East, the company benefited from increased demand.
Tenaris announced a substantial investment and maintenance program for Q3 2024, aiming to enhance capabilities to meet growing demand.
The company projects an EBITDA margin of 20-25% for H2 2024, specifically with Q3 expected just above 20% after maintenance.
Expansion of pipeline capacity in Saudi Arabia, steady activity outlook in the U.S., and potential growth in Argentina and Brazil reflect a robust strategic roadmap.
The company's robust net cash position and share buyback program's continuance reflect its solid financial health.
Active measures are underway to contain costs to maintain margins amidst potential reduction in Pipe Logix.
More details: Tenaris IR
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