TS · Tenaris S.A.

Tenaris delivered a strong start to 2026 with Q1 net sales of $3.1 billion, up 4% from Q4 2025 despite Middle East disruptions from the Iran war and Strait of Hormuz closure. Sales growth was driven by seasonally higher activity in Canada, recovery in Mexico, increased offshore sales in Brazil, customer stock-building in North Africa, and advanced shipments in Saudi Arabia. Tubes segment sales rose 3% sequentially to $2.931 billion, with volumes up 3% to 995 thousand tons and stable average selling prices; North America contributed $1.474 billion (+1% seq.), South America $531 million (+6%). Operating income increased 5% to $584 million, with EBITDA up 3% to $735 million at a stable 23.7% margin, as higher maintenance shutdown costs were offset by lower tariff costs. Net income surged 22% sequentially to $564 million, aided by $50 million financial gains (mainly $53 million from portfolio investments) and $33 million equity earnings from Ternium and Usiminas, despite a $103 million tax charge. SG&A held flat at 15.0% of sales. Cash generation remained robust with $618 million operating cash flow (after $84 million working capital increase), $503 million free cash flow post $114 million capex, and net cash of $3.8 billion after $90 million share buybacks. Management notes Q2 sales and margins pressured by lower Middle East shipments, higher logistics, and fixed cost underabsorption, but expects recovery in H2 2026 assuming Strait reopening, amid rising oil/LNG prices boosting global drilling, shale, and offshore investments.