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Tenaris S.A. Q1 2026 Financial Summary

Business Context and Reporting Period

This Form 6-K filing presents the Consolidated Condensed Interim Financial Statements for Tenaris S.A. for the three-month period ended March 31, 2026. The report was signed on May 6, 2026. Tenaris is a global leader in the manufacturing and distribution of steel pipes, primarily serving the oil and gas industry. The financial statements are prepared in accordance with IFRS and are unaudited.

Key Financial Metrics

Note: Gross margin for Q1 2026 was approximately 33.9% compared to 34.3% in Q1 2025.

Material Changes vs. Prior Period

• Revenue Growth: Net sales increased by 6.1% year-over-year, driven primarily by higher volumes and pricing in the Tubes segment, particularly in North America (sales up 19.1% to $1.52 billion).
• Profitability: Operating income rose 6.2% to $583.9 million. Net income increased 9.0% to $564.2 million, aided by a significant improvement in "Other financial results, net," which swung from a loss of $31.4 million in Q1 2025 to a loss of only $2.7 million in Q1 2026, largely due to favorable foreign exchange results.
• Equity in Earnings: Earnings from non-consolidated companies (primarily Ternium and Usiminas) more than doubled to $33.4 million from $14.0 million.
• Cash Flow: Operating cash flow decreased by 24.8% to $617.6 million, primarily due to a use of cash in working capital of $83.8 million (compared to a source of $223.8 million in the prior year), driven by increases in trade receivables and inventory.
• Share Repurchases: The company repurchased approximately $89.6 million of its own shares in Q1 2026, compared to $235 million in Q1 2025, as the third buyback program neared completion.

Outlook, Risks, and Contingencies

• Dividend Proposal: The Board proposed an annual dividend of $0.89 per share ($1.78 per ADS), including an interim dividend already paid. The remaining balance of $0.60 per share is proposed for payment in May 2026.
• Geopolitical Risks: The filing highlights significant uncertainty regarding the conflict in the Middle East (U.S./Israel vs. Iran), including the closure of the Strait of Hormuz and subsequent naval blockades. This has caused extreme volatility in energy prices and poses risks to supply chains and operations in the region.
• Trade and Tariffs: U.S. tariffs on steel imports were increased to 50% in mid-2025. Canada also implemented tariff rate quotas. These measures continue to affect market dynamics and cost structures.
• Legal Contingencies:
  • CSN/Usiminas Litigation: A Brazilian court (SCJ) ruled against Tenaris's subsidiary Confab regarding the 2012 Usiminas acquisition, ordering indemnification. The potential exposure is estimated at approximately $125.3 million. Tenaris has filed an extraordinary appeal with the Supreme Federal Tribunal, which has not yet ruled on admissibility.
  • Antidumping Duties: The U.S. Department of Commerce finalized lower antidumping duty rates for Tenaris imports from Argentina (6.76%) and Mexico (26.10%). Refunds for prior periods are being collected or are pending liquidation.
  • Canadian Antidumping: In April 2026, the Canadian International Trade Tribunal found that Tenaris's OCTG exports from the U.S. caused injury to the Canadian industry, leading to the application of antidumping duties.
• Argentina FX Controls: While some restrictions have eased, foreign exchange controls in Argentina remain a source of volatility. Tenaris holds a net short peso exposure of approximately $24.0 million.

Investor Verification Checklist

• Working Capital Trends: Verify the sustainability of the $83.8 million cash outflow in working capital and the impact of rising trade receivables on future liquidity.
• CSN Litigation Status: Monitor the admissibility ruling of the extraordinary appeal filed with the Brazilian Supreme Federal Tribunal regarding the $125 million potential liability.
• Geopolitical Impact: Assess the actual operational impact of the Middle East conflict and Strait of Hormuz disruptions on Q2 2026 production and logistics costs.
• Tariff Exposure: Review the final impact of the new Canadian antidumping duties and the ongoing U.S. tariff environment on North American margins.
• Dividend Approval: Confirm shareholder approval of the proposed $0.89 annual dividend at the May 12, 2026 meeting.