Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Are you seeing companies pulling back on Pemex, and what level of recount do you expect by year-end? Are you considering cost-saving initiatives? A: Paolo Rocca, Chairman of the Board, explained that geopolitical and macroeconomic changes are leading to expectations of lower economic activity and oil prices. If oil prices stabilize at current levels, oil companies may reduce operations, particularly in the US. However, the impact is not expected in Q2 2025 due to a solid backlog. There is uncertainty for the second half, with potential reductions in US drilling, but global projects, especially offshore, are expected to continue.
Q: How are US tariffs on steel impacting your operations, and have you seen changes in imports due to Section 232 quotas? A: Paolo Rocca noted that US tariffs on steel affect operations, with an estimated $70 million per quarter in additional tariffs. However, price increases in the US are expected to offset these costs. Imports increased in anticipation of tariffs, but the administration's focus on domestic industry utilization may influence future import levels. Guillermo Moreno, President, added that imports rose in Q1, but future levels depend on activity and administrative focus.
Q: How do you see volumes progressing in the second half of the year, considering the uncertainty in oil prices and tariffs? A: Paolo Rocca stated that it's too early to predict oil company decisions, but Tenaris's client portfolio, consisting mainly of major oil companies with long-term programs, should be more resilient. Import volumes and domestic welded pipe production may also influence supply dynamics. The administration's monitoring of import volumes could impact negotiations and supply pressure.
Q: Can you provide an update on offshore activities and their impact on volumes in 2026? A: Gabriel Podskubka, President - Eastern Hemisphere, highlighted the resilience of the offshore market for Tenaris. The company has a strong backlog for offshore projects, including a recent contract with Shell for the Bonga project in Nigeria. Offshore projects, sanctioned with long-term horizons, are expected to remain resilient despite short-term oil price volatility.
Q: How do you view the impact of raw material costs and potential lower demand on margins in the second half of the year? A: Paolo Rocca indicated that raw material costs are not the main concern; instead, the focus is on overall economic activity and potential recession risks. Tenaris's differentiated product offerings and global operations help manage raw material cost impacts. The company is more concerned about economic activity levels and potential demand reductions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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