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Tenaris S.A. 2026 Second Quarter Results Summary

Business Context and Reporting Period

Tenaris S.A., a global manufacturer of tubular products for the oil and gas industry, reported its unaudited consolidated results for the quarter ended June 30, 2026. The filing, submitted on August 5, 2026, covers the second quarter of 2026 and the first half of 2026, comparing performance against the prior quarter and the same periods in 2025. The company operates primarily in the Tubes segment (seamless and welded pipes) and an Others segment (oilfield services and other products).

Key Financial Metrics

Material Changes vs. Prior Periods

• Revenue Decline: Second-quarter net sales decreased 4% sequentially and 4% year-over-year. This was driven primarily by a 22% sequential drop in sales to the Asia Pacific, Middle East, and Africa region due to the effective closure of the Strait of Hormuz, which postponed shipments to customers in the Middle East.
• Margin Compression: Operating income fell 15% sequentially and 15% year-over-year. EBITDA margin contracted to 21.9% from 23.7% in the prior quarter. Management attributed this to higher unitary logistic costs, lower absorption of fixed costs due to volume declines, and rising raw material costs.
• Segment Performance: The Tubes segment saw a 4% sequential sales decline, with welded pipe volumes dropping 15%. The Others segment sales decreased 3% sequentially, mainly due to lower oilfield services sales in Argentina.
• Cost Pressures: Selling, general, and administrative (SG&A) expenses rose to 16.3% of sales (from 15.0% in 1Q 2026) due to higher logistics fees and services costs associated with the Strait of Hormuz disruption.

Guidance, Outlook, and Management Commentary

• Outlook: Management expects sales and EBITDA in the second half of 2026 to remain in line with the first half. This outlook assumes continued lower shipments to the Middle East and elevated raw material costs. However, there is potential upside if shipping disruptions at the Strait of Hormuz resolve before year-end.
• Seasonality and Mix: The third quarter is expected to be affected by seasonality and product mix effects, while the fourth quarter is projected to benefit from higher prices and volumes in most regions.
• Market Dynamics: Oil and gas drilling activity is increasing in the USA, Canada, and Argentina. In the U.S., OCTG prices are rising to offset higher costs. In the Middle East, drilling in Iraq, Kuwait, and Qatar remains severely affected by conflict, while activity in Saudi Arabia and the UAE is largely maintained.
• Dividends: The Board approved an interim dividend of $0.59 per share ($1.18 per ADS), totaling approximately $600 million, payable on November 25, 2026.
• Board Changes: Mr. Jaime Serra Puche resigned from the Board and Audit Committee. Ms. Alicia Móndolo was appointed as a new Board member and Vice Chair for Sustainability, Risk Management, and Compliance. Ms. Maria Novales-Flamarique was appointed to the Audit Committee.

Investor Verification Checklist

• Strait of Hormuz Impact: Verify the duration of the shipping closure and its specific impact on Middle East shipment schedules and logistics costs.
• Raw Material Costs: Monitor trends in steel and raw material pricing to assess the sustainability of margin compression.
• U.S. Tariff Costs: Review the specific impact of U.S. tariff costs on the first-half operating results and future pricing strategies.
• Working Capital Efficiency: Note that operating working capital days increased to 143 days from 128 days in the prior year; verify if this is a temporary inventory buildup or a structural change.
• Legal Contingencies: Review the provision for ongoing litigation related to the acquisition of a participation in Usiminas, which contributed to a $6 million loss in the first half.