Tenaris S.A. - ADR

Key results (2Q 2026) — down YoY/seq, pressured by Middle East logistics - Sales: ~$3.0bn (-4% YoY and -4% sequentially), mainly from postponed shipments to the Middle East (Iraq, Kuwait, Qatar) due to the effective closure of the Strait of Hormuz for much of the quarter. - EBITDA: $649m (-12% sequentially); Net income: $492m (-13% sequentially). - Costs headwinds: management cited lower absorption of fixed costs plus higher raw material and logistic costs. - Cash flow: Operating cash flow $518m, Capex $121m, Free cash flow $396m; net cash position ended at ~$3.6bn after a dividend payment.

Guidance / outlook (2H 2026) — “same as 1H” baseline, Q3 weaker; upside if Hormuz reopens - Company guidance for 2H 2026: revenues and EBITDA expected in line with 1H, with a Q3 more affected (similar to Q2) and an improvement in Q4. - Strait of Hormuz premise changed: last quarter assumed short resolution; now they remove material impacted by the northern Gulf disruption from the base case. - Material backlog at risk: increased from ~$100m to ~$130m of OCTG material intended for Iraq/Kuwait/Qatar (upper Gulf) that is out of the forecast. - If navigability returns soon: it takes ~70–90 days to ship and invoice, and it is treated as a recurring upside (not base-case). - Q4 expected “jump”: driven by oil-price-driven activity, plus ramp-up of rigs and mills in U.S., Canada, Argentina, and some pricing improvement.

Dividend / capital return — doubled interim dividend; buybacks not emphasized - Board approved an interim dividend of $0.59/share (~$1.18 per ADS) totaling ~ $600m, paid Nov 25. - Management rationale: prefers dividend simplicity and maintaining share liquidity; cites strong balance sheet and cash generation. - Sustainability stance: board aims to keep shareholder returns broadly in line with past levels, while preserving financial flexibility; continuation will be board/AGM approved. - Comment on process: implies the usual ~1/3 interim and ~2/3 at May structure.