Tenaris S.A. (NYSE:TS) Q3 2024 Earnings Conference Call November 7, 2024 8:00 AM ET

Company Participants

Giovanni Sardagna - Director of IR
Paolo Rocca - Chairman & CEO
Alicia Mondolo - CFO
Gabriel Podskubka - COO
Luca Zanotti - President, US Operations

Conference Call Participants

Alessandro Pozzi - Mediobanca
Arun Jayaram - JPMorgan Securities LLC
Marc Bianchi - TD Cowen
Stephen Gengaro - Stifel
Rodrigo Almeida - Santander

Operator

Good day and thank you for standing by. Welcome to Third Quarter 2024 Tenaris S.A. Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]

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. Please go ahead.

Giovanni Sardagna

Thank you, Gigi, and welcome to the Tenaris 2024 Third Quarter Conference Call. Before we start, I would like to remind you that we will be discussing forward-looking information in 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; Alicia Mondolo, our Chief Financial Officer; Gabriel Podskubka, our Chief Operating Officer and Luca Zanotti, President of our U.S. Operations.

Before passing over the call to Paolo for his opening remarks, I would like to briefly comment our quarterly results. Our sales in the third quarter of 2024 reached $2.9 billion, down 10% compared to those of the previous year, and down 12% sequentially, mainly due to lower prices in the Americas and lower demand in the USA, Mexico, and Saudi Arabia, as well as lower line pipe shipments to Argentina.

Average selling prices in our tubes operating segment decreased 14% compared to the corresponding quarter of last year and 2% sequentially. Our EBITDA for the quarter was up 6% sequentially to $688 million, as the previous quarter was affected by an extraordinary provision recorded for an ongoing litigation related to the acquisition of participation in Usiminas in 2012. Without this extraordinary provision in the previous quarter, the EBITDA for the quarter would have declined 16% sequentially. However, our EBITDA margin at 23.6% was only marginally lower compared to the margin recorded last quarter on a comparable basis.

With operating cash flow of $552 million and capital expenditure of $179 million, our free cash flow for the quarter was $373 million. After share buybacks of $182 million, a net cash position amounted to $4 billion at the end of the quarter. Our Board of Directors approved the payment of an interim dividend $0.27 per share or $0.54 per ADR to be paid on November 20. The interim dividend is up 35% compared to the interim dividend we paid last year. In addition to the dividend, the Board of Directors also approved a share buyback of $700 million to be executed within the next five months.