Tenaris S.A.

Good day and thank you for standing by. Welcome to the first quarter Tenaris S.A. earnings conference call. At this time all participants are in a listen-only mode. After the 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 a 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 the Investor Relations Officer, Giovanni Sartagna. Please go ahead.

Thank you, Carmen, and welcome to Tenaris' 2026 First 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 in this call. With me on the call today are Gabriel Podskubka, our newly appointed Chief Executive Officer, Carlos Gomez Alzaga, our Chief Financial Officer, and Guillermo Moreno, President of our U.S. Operations. Before passing over the call to Gabriel for his opening remarks, I would like to briefly comment on quarterly results. Our first quarter sales reached 3.1 billion, up 6% year-on-year and 4% sequentially, despite the disruption in the Middle East caused by the conflict and the closure of the Strait of Hormuz. Our sales benefited from seasonally higher activity in Canada, a limited recovery of activity in Mexico, higher offshore sales in Brazil, some stock building in North Africa, and an advance of shipment in Saudi Arabia. Average selling prices in our tubes operating segment increased 5% compared to the corresponding quarter of 2025 and 1% sequential. Our quarterly EBDA rose 3% sequentially to $735 million while our net income increased 22% to $564 million due to better results below the operating line. Our EBDA margin remained at 24% as higher costs for maintenance shutdowns were offset by lower tariff costs. With operating cash flow of $618 million and capital expenditure of $114 million, our free cash flow for the quarter was $503 million. Following share buybacks of $90 million during the quarter, our net cash position at the end of the quarter increased to $3.8 billion.

Now, I will ask Gabriel to say a few words before we open the call to questions. Thank you, Giovanni, and I would like to extend a warm welcome to all of you. Before we go to our results, I would like to express that I am deeply honored by the trust that Pablo Roca and the Tenaris Board of Directors have placed in me, and with it, the enormous responsibility of leading this company in the next phase of growth. At the same time, I'm very pleased that we will be able to count on the continued support and leadership of Paulo as chairman of the board. When I joined the company as a graduate engineer in 1995, I never imagined how Tenaris would grow so quickly and come to play the leading role in serving the world's energy industry that it does today. During all these years, Paulo has been the architect of the growth and the transformation of Tenaris. and a constant presence and inspiration to all of us. The journey has been truly extraordinary and it has been a privilege to experience it from the inside and to have had so many opportunities for professional growth. I look forward to building on his remarkable achievements. Now let's move on to our first quarter results and the panorama that we have ahead. This quarter reminding us that the geopolitical risk and uncertainty is ever present in the oil and gas industry. As is well known, the conflict in the Middle East has led to the closure of Hormuz, through which 20% of the world's oil and energy normally passes. During this time, our first priority has been the safety of our 1,000 employees in the region. I would like to give a special thanks to them for their unwavering commitment to serving our customers through this turbulent period. In Saudi Arabia and the UAE, our customers have continued their operations and we continue to support them. However, customers in Kuwait, Qatar and Iraq have had to shut in most of their operations. We expect our sales in the region to be affected in the second quarter in around 140 million. We are also seeing higher logistic costs as we seek alternative routes to the region and also from the global increase in fuel prices. Amidst the regional turmoil, we continue to differentiate our service in the region. ADNOC Offshore recognized our reliable service and HSC performance with a supplier of the year award. In Kuwait, we have been awarded a five-year contract for the supply of casing products and accessories to be used in the development of a complex new field. As an immediate consequence of the supply disruption in the Middle East, oil and gas companies and consuming countries are looking at diversifying supply. Investment in short cycle shale plates in the Americas are likely to benefit and some rig direct customers in the United States and Argentina are already confirming that they are adding rigs. The fleet of high spec rigs operating in Vaca Muerta is expected to increase by 15% by the end as new rigs and hydraulic fracturing sets are brought into the country. Tenaris will start to operate its third set of hydraulic fracturing equipment towards the end of the year. We are preparing for an increase of activity in the United States in the second half of the year, while in Canada, industry and government are working to increase LNG and pipeline takeaway capacity, which will allow activity growth in the years ahead. We are also strengthening our redirect service through the integration of all torques, hardware, and software for torque term monitoring operations. We recently acquired this specialized technology and know-how that now forms part of our well integrity service and will add further value to our customers. The outlook for deep water drilling, offshore pipeline construction, and further exploration activity in the next three years is promising. There is a significant number of deep water projects in Africa, Asia, and the Mediterranean, which are nearing final investment decisions, while in the United States, Brazil, and the Guyana-Suriname Basin, developments are also moving forward. Operators are looking to shorten time from discovery to first production, and Tenaris is supporting them by fast-tracking the integrated supply of OCDG, limepipe, coating, and accessories. As we look into the eventual reopening of the Strait of Hormuz, Tenaris, with its extensive presence, flexible supply options around the world, its differentiated service and technology for shale and devoted operations, and the strength of its financial position, is well-placed to serve our customers as they respond to the need to replenish oil and gas inventories and increase drilling activity. I will now open the floor for questions.