Tenaris S.A.

Good day and thank you for standing by. Welcome to the second quarter 2025 Denadie's Essay Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1-1 again. 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 Gigi and welcome to Denadie's 2025 Second Quarter Conference Call. Before we start I would like to remind you that we will be discussing forward-looking information during the call and that our actual results may vary from those expressed or implied during this call. With me on the call today are Paolo Rocca, our Chairman and CEO, Carlos Gomez-Saltzga, our newly appointed Chief Financial Officer, Gabriel Potskufka, our Chief Operating Officer, and Gizermo Moreno, President of our US Operations. Before passing over the call to Paolo for his opening remarks, I would like to briefly comment our quarterly results. Our second quarter sales reached 3.1 billion, down 7% year on year, but up 6% sequentially, mainly reflecting an increase in North American OCTG prices and stable volumes. Average selling prices in our Tubes operating segment decreased 2% compared to the corresponding quarter of last year, but increased 6% sequentially. Our ABDA for the quarter was up 5% sequentially to 733 million, with our ABDA margin for the quarter close to 24%. Our margins remain in line with those of the previous quarter, our cost of sales also rose 5%, mainly reflecting product mix differences and higher target payments. With operating cash flow of 673 million and capital expenditure of 135 million, our free cash flow for the quarter was 538 million. After a dividend payment of 600 million in May and share by Bax of 237 million, our net cash position amounted to 3.7 billion at the end of the quarter. Now I will ask Paolo to say a few words before we open the call to questions.

Thank you Giovanni and good morning to all of you. Our results in the second quarter point to the solid industrial and commercial position that Tenaris has built, serving its wide range of customers around the world and the competitive differentiation we have established in key markets. Even as drilling activity in several areas of the world has slowed, our sales rose sequentially, together with our ABDA and net income. Our free cash flow amounted to a solid 538 million, while our shareholder distributions between dividend payments and share buybacks amounted to 837 million dollars during the quarter. There is an increase in the US Section 232 tariff on the import of all steel products from 25% to 50%, and the ongoing tariff negotiations have increased market uncertainty. As countries negotiate the so-called reciprocal tariff, no country apart from the UK has so far been able to negotiate how the Section 232 tariff will be applied. We expect that the current broad-based approach will eventually be modified towards a more specific product-based approach, which takes into account market factors and considers differential tariff and quotas for some countries. The Section 232 tariff and the ongoing negotiations will change the competitive environment, favoring more utilization of available domestic capacity and fewer imports. Over time, they will impact on prices once excess inventories are drawn down and imports are reduced from the high levels we have seen in the first half of the year. Tenaris, with its strong US domestic production base, including the world's most efficient seamless pie mill at Bay City, and its copper-steel production facility, supported by its global inductor system, remains well-placed to continue serving its US customer with its highly differentiated rig direct service. Our sales this quarter include the successful delivery of pipes and coatings to a wide number of complex lime pie projects around the world. These include Echinor Raya project in Brazil, ConocoPhillips Willow project in Alaska, Shell's Bonga project in Nigeria, Azul Ndongo project in Angola, and Chevron Leviathan project in the Mediterranean. Looking forward, we will have lower delivery to offshore lime pipe projects until a new wave of projects progresses to the development phase in 2026. One such project will be the Grand Morgue project in Suriname, in addition to our lime pipe and coating award, we have received the award for the supply of casing and tubing for the project. Key to this achievement was our offer of service, which we will carry out from a base we are now setting up in Suriname. In the fast-growing frontier development of the Guayana-Suriname Basin, we have set up local service bases to support the operation of Exomobil, of Total Energies, and other customers in the region. Another major developing region where we have been able to make a difference is the Vaca Moeta Shell Play in Argentina. Here, as well as casing and tubing, we also supply fracking and coil tubing services, and are instrumental in developing the pipeline infrastructure that will enable the oil and gas to reach global markets. During this third quarter, we will complete most of the deliveries for the Vaca Moeta sewer pipeline that will build crude export capacity to a new deep-water port in Puerto Rosales. Early next year, we should also deliver the pipes for the Duplicar Norte pipeline that will connect the node development in Vaca Moeta to the main crude export pipelines. In Mexico, Pemex has successfully issued a 12 billion financing facility this week. This is an important step that should allow Pemex to increase its current low level of operations and pay down some of its suppliers' debt. We look forward to supplying a higher level of operations under our current contract, With oil prices around $65 a barrel and drilling activity in the United States and Canada is growing, our sales in these countries remain relatively resilient due to our solid customer portfolio. Their focus is on improving operational efficiency, which extends the lateral length for which they appreciate our seamless product and rig direct service. We are ready now to take any questions you may have.