Tenaris in front of the audience of investors and analysts London does not hide the slowdown in activity in recent months, but sees a margin improvement in 2025 and does not exclude a further buyback or dividend increase. At the investor day in London yesterday the CEO, Paolo Rocca, said he expected for the second half of the 2024 volumes and sales down 10% and 15% respectively compared to the first half. The EBITDA margin is seen in the middle of the range between 20% and 25%, a range that will be “a floor” for the following quarters and for 2025 “we see potential upside,” Rocca said.
Il title in Piazza Affari, after closing yesterday 4,35% at 13,805 euros after an intraday high of 14 euros, the highest level in almost eight weeks, today it sees a -0,14% in a Ftse Mib at +0,49%.
Rocca: “Next semester will be the floor of our performance”
“What we expect for the next half year, between July and December, will probably be a floor of our performance, in terms of volume we will be 10% below what we saw in the first half,” Rocca said. “Turnover will be 15% lower than the previous half year and the margin I had forecast between 20% and 25%, I think we will be in the middle of this range and we will be able to stay there.” Meanwhile, he added, financial position of the group it is significant and has improved.
With the results of the second quarter of 2024, Tenaris had already anticipated that the revenues and EBITDA of the third quarter would be influenced by the less activity in the United States and Latin America and the prolonged decline in Octg tube prices in the Americas. In this context, the company must manage the maintenance shutdowns of many of its plants to reduce costs, increase competitiveness and align its industrial system. Annual investments have been confirmed in the range of US$600-700mn.
Message to shareholders: possible buy back or dividend increase
At the next board meeting in November, Rocca added, it is reasonable to think that "we will decide to use the current authorization for the residual buyback of about 700 million dollars. Tenaris has always increased dividends over time and had already introduced the buyback tool. Last August, the fourth tranche with the purchase of 19,4 million of its own shares, for a value of 278,7 million euros. During the program, which began in November 2023, it purchased a total of 71,6 million ordinary shares, equal to 6,07% of the capital for a value of 1,11 billion.
“It is now up to the board to reconsider” a possible expansion of the buyback plan o an increase in dividends, decision “linked to market circumstances,” he added. According to some analysts, with net income estimated at $1,932 billion in 2024, the dividend could be as low as $0,60 per share.
Always keeping an eye on M&A opportunities
The focus remains on M&A opportunities. “We are always looking for growth opportunities, to strengthen our position and we look at areas where we can make investments,” continued Rocca, explaining that “if we do not identify areas where to invest, we still continue to work to improve returns for our shareholders.”
