Tenaris Q2 Profit Falls to US$477m on Hormuz Closure
Earnings · Argentina
Key Facts
—Sales Fall Tenaris posted second-quarter 2026 net sales of US$2,967 million, down 4 per cent both on the first quarter and on the same quarter of 2025.
—Profit Decline Net income attributable to shareholders fell to US$477 million from US$531 million a year earlier, squeezed by logistics disruption.
—EBITDA Earnings before interest, tax, depreciation and amortisation was US$649 million, down from US$733 million, with the margin narrowing to 21.9 per cent from 23.7 per cent.
—Hormuz Impact Management attributed weaker margins to shipment delays and higher freight costs tied to Middle East shipping disruption.
—Argentina Layoffs Separately, in late June the Techint group’s Tenaris Siat unit cut 150 fixed-term contract jobs at Valentin Alsina after losing two Argentine pipeline tenders.
—Volumes Tubular product shipments totalled 946,000 tonnes, down 5 per cent on the first quarter and 4 per cent on a year earlier.
Tenaris (NYSE: TS) booked net sales of US$2.97 billion in the second quarter of 2026, down 4 per cent, after the effective closure of the Strait of Hormuz pushed Middle East shipments into later quarters. Weeks earlier its Argentine welded-pipe unit had cut 150 fixed-term contract jobs at Valentin Alsina.
The Quarterly Numbers in Detail
Tenaris published its second-quarter 2026 results on 5 August 2026, reporting net sales of US$2,967 million. Sales fell 4 per cent against the first quarter and 4 per cent against the second quarter of 2025.
The top line masked a familiar strain. Net income attributable to shareholders dropped to US$477 million from US$531 million in the same quarter a year earlier.
Operating income came in at US$494 million, down 15 per cent both sequentially and year on year. Total net income, before deducting the share attributable to minority holders, was US$492 million against US$542 million.
Earnings before interest, tax, depreciation and amortisation was US$649 million, delivering an EBITDA margin of 21.9 per cent against 23.7 per cent in both the first quarter and the year-earlier quarter.
Sales volumes of tubular products stood at 946,000 metric tonnes, of which seamless pipe accounted for 768,000 tonnes. Delivery, more than order intake in the Americas, held the quarter back, although demand in parts of the Middle East also weakened.
For context, net sales in the first quarter of 2026 were US$3,100 million, meaning sequential revenues slipped about 4.3 per cent. The year-earlier second quarter had net sales of US$3,086 million, so the 2026 quarter also represented a 3.9 per cent year-on-year decline.
What the Hormuz Disruption Did to Costs
Shipping through the Strait of Hormuz has become Latin America’s long-distance headache. The narrow waterway carries a huge share of global oil and gas, and when tensions flare, freight rates spike and vessels reroute, adding days or weeks to delivery schedules.
Tenaris management linked the profit compression directly to Middle East disruption. Higher logistics costs and delayed tubing shipments bit into margins that would otherwise have been healthier. Because the company moves heavy steel pipe by sea to drilling basins from the Middle East to the Gulf of Mexico, any choke point immediately raises the cost of doing business.
These disruptions also warp inventory timing. When a rig in Argentina’s Vaca Muerta or Saudi Arabia’s desert waits for pipe, the dollar clock ticks louder. Tenaris cited higher unitary logistics costs, weaker absorption of fixed costs and rising raw material prices. Together these cut the EBITDA margin to 21.9 per cent from 23.7 per cent three months earlier.
For investors across Latin America, the episode confirms that geopolitics and supply-chain fragility are now permanent line items in quarterly earnings. A flare-up half a world away can cool profits from Buenos Aires to Houston.
The 150 Layoffs and What They Mean for Argentina
The 150 job cuts at Valentin Alsina were not announced in the quarterly results release, which does not mention them. Tenaris Siat, the Techint group’s Argentine welded-pipe unit, notified the redundancies in late June, effective from 1 July.
The plant sits in Lanus, in the industrial belt south of Buenos Aires, where tens of thousands of families depend on the metalworking and energy supply chain.
The cuts land at a delicate moment for Argentina’s economy. Industrial employment remains one of the few anchors of household income in the sprawling suburbs south of the capital.
When a plant of this size tightens its workforce, nearby workshops, transport contractors and neighbourhood shops feel the drag.
The 150 posts were fixed-term contract roles, not permanent staff jobs. Of roughly 200 contract workers on the site, about three-quarters were not renewed, while the plant’s roughly 150 permanent employees were left untouched. On the figures cited by the Argentine press, that is about 43 per cent of a total workforce of some 350. The plant employed some 550 people in 2023, when it rolled pipe for the gas pipeline now officially called the Gasoducto Perito Moreno.
Local reporting carried the weight of a region that remembers job losses turning into long-term social erosion.
The cause was commercial rather than geopolitical. Siat rolls large-diameter welded line pipe, and it lost two tenders to supply pipe for Vaca Muerta gas pipelines, one of them to India’s Welspun.
The Strait of Hormuz did not cause these redundancies. They belong to a separate, domestic story about who wins Argentina’s pipeline contracts.
Demand for Oil-Country Tubular Goods and the Outlook
Drilling activity is rising in the United States, Canada and Argentina, and customers worldwide are pressing ahead with cost-competitive offshore projects. In the United States, prices for oil-country tubular goods have been climbing to offset higher raw material and logistics costs.
The Middle East is the weak spot. Tenaris says drilling in Iraq, Kuwait and Qatar has been severely affected, while activity in Saudi Arabia and the United Arab Emirates has largely held up.
Management tempered enthusiasm with caution. The Strait of Hormuz disruption is not resolved, and rerouted cargoes add unpredictable lead times.
Tenaris expects second-half sales and EBITDA to stay in line with the first half. It flagged possible upside if the shipping disruption ends before the year is out.
The board approved an interim dividend of US$0.59 per share, or US$1.18 per ADS, worth about US$600 million and payable on 25 November 2026. Free cash flow was US$396 million in the quarter, and the net cash position stood at US$3.6 billion at 30 June.
Board changes were also disclosed. Jaime Serra Puche has resigned as a director and audit committee member, and German Cura has stepped down as vice chair for sustainability while remaining on the board.
Alicia Mondolo joins the board as vice chair responsible for sustainability, risk management and compliance. Paolo Rocca remains chairman of a ten-member board.
For Latin American investors who track Tenaris as a bellwether, the message is mixed. Sales held up in North America, where first-half tubes revenue rose 11 per cent, but margin sensitivity to logistics shows the premium on geographic diversification is rising.
Tenaris says first-half EBITDA was negatively affected by the cost of United States tariffs. As offshore campaigns in Brazil’s pre-salt and Guyana’s Stabroek block continue, the company should benefit from deepwater demand, but only if sea lanes stay open.
Argentine shale play Vaca Muerta offers a domestic growth pocket that partly insulates Tenaris from global shipping chaos, yet even there the economics depend on imported steel inputs that must navigate the same troubled waters. The second half of 2026 will therefore test whether the company can convert its revenue momentum back into profit growth once Hormuz tensions ease.
Frequently Asked Questions
How much did Tenaris sell in the second quarter of 2026?
Net sales were US$2,967 million, down 4 per cent against the first quarter of 2026 and 4 per cent against the second quarter of 2025.
Why did Tenaris’s profit fall in the second quarter of 2026?
Profit was squeezed by shipment delays and higher logistics costs linked to shipping disruption around the Strait of Hormuz, which weighed on margins.
How many layoffs did Tenaris announce in Argentina?
Tenaris Siat cut 150 fixed-term contract jobs at Valentin Alsina in Lanus, Buenos Aires province, notified in late June 2026 and effective from 1 July. The cuts followed the loss of two Argentine pipeline supply tenders, one of them to India’s Welspun, and were not part of the quarterly results release.
Sources: Tenaris, “Tenaris Announces 2026 Second Quarter Results”, 5 August 2026, Infobae on the 150 redundancies at Tenaris Siat, Ámbito on the Valentin Alsina notifications
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
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