Q4 2021 Tenaris SA Earnings Call

[music].

Good day, and thank you for standing by and welcome to the Q4 2021, Senates SA earnings Conference call.

Speaker 1: Good day and thank you for standing by. Welcome to the Q4 2021 Cenates essay earnings conference call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 on your telephone.

At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone. Please be advised today's conference is being recorded.

Speaker 1: Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Giovanni Sardagna. Please go ahead.

Do you require any further assistance please press star zero.

I'd now like to hand, the conference over to your Speaker today Giovanni started Danya. Please go ahead.

Okay.

Speaker 2: Thank you, Gigi, and welcome to the NARES 2021 Fourth Quarter and Annual Results ConferenceO workers experience who may have subway employeesGLT

Thank you Gigi and welcome to <unk> 2021, full quarter and annual results conference call.

Speaker 2: Before we start, I would like to remind you that we will be discussing forward-looking information in the call, and that our actual thoughts may vary from those expressed or implied during this call.

Before we start I would like to remind you that we will be discussing forward looking information in the call and that actual results may vary from those expressed or implied.

During this call.

Speaker 2: We met on the call today at Paulo Rocca, our chairman and CEO , Alizia Mandelow, our chief financial officer, Guillermo Vogel, vice chairman and member of our board of directors, Herman Cura, vice chairman and member of our board of directors, Gabriel Petkuska, president of our Eastern Hemisphere operations, and Luca Granovki, president of our U.S. separation.

You may end the call today up I'll, let al <unk>, Chairman and CEO , Alicia Mondello, Chief Financial Officer, John Mclaughlin, Vice Chairman and member of our board of director at months without Vice Chairman and member of our board of directors at the entry price of it.

And each of the operations in Nicaragua.

<unk> of our U S operations.

Speaker 2: Before passing over the call to Paulo for his opening remarks, I would like to briefly commend our co-prolievers, if you were not using Professor

Before passing over the call to Paolo for his opening remarks, I would like to briefly comment on something like that.

During the fourth quarter of 2021 fees reached 2.1.

Speaker 2: During the fourth quarter of 2021, shares reached 2.1 billion, up 82% compared with those of the corresponding quarter of the previous year, and 17% sequentially, mainly driven by the ongoing recovery in union activity and prices in North America, where OCTG inventory levels and distributors have fallen with no normal level.

82% compared with those of the corresponding quarter of the PUC yet and.

And 17% sequentially, mainly driven by the ongoing recall activity and prices.

Well, we'll see continued inventory levels at distributors at four one.

Normal levels.

Our EBITDA for the quarter was up 27% sequentially to 400 million, reflecting higher volumes better pricing and a good industrial performance.

Speaker 2: Our ABA for the quarter was up 27% sequentially to $483 million reflecting higher volumes, better pricing and a good industrial pressure.

Speaker 2: Our ABB margin rose about 23% as better volumes and higher average selling prices, more than of sight the increase in the cost.

EBITDA margin rose about 43% as better volumes and higher average selling prices more than offset the increase in the cost of fees.

Speaker 2: Other selling prices in a future operating segment increased 20% compared to the corresponding quarter of 2020 and 11%

All of a sudden prices not too different.

<unk> segment increased 20% compared to the corresponding quarter of 2012 and.

11% sequentially.

Speaker 2: During the quarter, cash flow from operations was $36 million. Our net cash position at the end of the quarter declined to $700 million following the payment of an interim dividend of $153 million in November last year and capital expenditure of $69 million during the quarter.

During the quarter cash flow from operations was 46 million of.

Net cash position at the end of the quarter declined to 700 million following the payment of an equal dividends of $153 million.

Capital expenditure of $69 million during the quarter.

Speaker 2: The board of directors has decided to propose the approval of the annual general shareholders meeting to be held at the beginning of May, the payment of an annual dividend of 41 cents per share or 82 cents per ADR, which includes the interim dividend of 13 cents per share of 26 cents per ADR, that we paid at the end of November last year.

The board of Directors has decided to propose the approval of the annual general shareholders meeting at the end of the beginning of May the payment of an annual dividend of 41 per share or two cents per ADR.

<unk> dividend of <unk> 13.

Sure.

Per ADR.

Paid at the end of November last year.

Speaker 2: If approved, a dividend of 28 cents per share or 56 cents per ADR will be paid on May 20.

If approved a dividend of <unk> 28 per share.

Sure.

Six cents per ADR will be paid on May 23.

Speaker 2: Now I will ask Paulo to say a few words before we open the call.

Now I will ask Paolo to say a few words before we open the call to questions.

Speaker 3: Thank you, Giovanni, and good morning to all of you.

Thank you Giovanni and good morning to all of you.

Speaker 3: The fourth quarter we closed in 2021 with a third sequential increase in sales and margin, further reinforcing the recovery in our results that we have seen through the year. Taking the year as a whole, our sales rose 27% year-on-year, while our EBITDA more than doubled, with the margin surpassing its pre-pandemic level.

In the fourth quarter, we closed.

And in 'twenty one.

The sequential increase in sales and margin.

Further reinforcing the recovery in our results that we have seen through the year, taking the year as a whole our sales rose 7% year on year, while our EBITDA more than double the margins of the pricing is pre pandemic level.

Speaker 3: Our net income was additionally boosted by our participation in the results of our investment in ternium and usb.

Our net income was additionally, boosted by our participation in the results of our investments in maintenance.

Speaker 3: which benefited from breakout steel price. As a result of this annual result and our solid financial position, with a positive net cash balance of 700 million, we are proposing to restore our dividend payment for the 2021 fiscal year to the pre-pandemic level.

<unk> benefited from record steel price.

As a result of these annual results and our solid financial position with a positive net cash balance of 700 million, we are proposing to restore our dividend payment and the payment for the 2021 fiscal year, two the president David <unk>.

Speaker 3: This achievement would not have been possible without the structural measures we took in 2020 to improve our profitability over the longer term as well as the strategic positioning we have built up over the past years in North America and the rest of the world through major investment, acquisition and implementation of our redirect services.

This achievement would not have been possible without the structural measures. We took in 2020 to improve our profitability over the longer term as well as the strategic position. We have built up over the past few years in North America and the rest of the world through major investments acquisition and then play.

Mentation of our rig direct service model.

Nor would it be possible without the extraordinary resilience and determination of our employees.

Speaker 3: Nor would it be possible without the extraordinary resilience and determination of our employees.

Speaker 3: to bore the brunt on the impact of pandemic in their working environment and on their families over the last two years, while adjusting to rapid change in data production, supply chain and customer required.

Bore the brunt of the impact of pandemic in their working environment and on their families over the last two years, while adjusting to rapid change in the death of production supply chain and customer requirements.

Speaker 3: It is attributed to their professionalism that we have maintained the high standard of our safety performance over the past year. We have lost time, accident frequency rate of one per million man hour worked. Even when adding 4,000 shops for simple, representing 33% of.

He is attributed to the professional fees that we haven't seen the highest standard of our safety performance over the back of the year with a lost time accident frequency rate per million man hour worked even when adding 4000 shop for simple representing 33% of the total.

Speaker 3: The United States and Modener in North America has been at the center of our recovery of the past year. Not only has the U.S. been at the forefront of the recovery in demand for our fraud. It has been the heretofore in Dattalre.

The United States and more generally North America has been at the center of our recovery over the past year.

Only has the U S have been at the forefront of the recovering demand for our product. It has been a hair to forward industrial reactivation.

Speaker 3: from October 2020 until the end of 2021. We added 1,200 employees in the US, and expect to add further 1,000 during 2022.

The October 2020 until the end of 2021, we added 1200 employees in the U S and expect to add a further 1000 during 2022.

Speaker 3: Production at our Bay City mill has reached full capacity, and we have reopened many of the facilities we had to close when the pandemic struck, including the recently acquired Copper Steet Shop, where we expanded the production range to supply steel to Bay City, as well as the ambush mill.

Production at our Bay City Mill has reached full capacity and we have reopened manner with the facility we had to close when the pandemic struck including the recently acquired Corpus diesel where we expanded the production range placed into <unk> as well as the Enbridge mainline.

Now.

With hot rolled coil prices holding from break or Wearables. We're also reactivating the welded pipe facilities to complement our supply of seamless piping specific product, we're welded pipe are suitable.

Speaker 3: With hot-soul, coil price is falling from breaker variables. We are also reactivating our welded pipe facilities to complement our supply of seamless piping specific products where welded pipe are suitable.

Speaker 3: US spot market OCD prices, as represented by the PipeLogic index, have reached their highest level since 2008.

Uhm spot market OCC prices as represented by the pipe logic index have reached their highest level since 2008.

Speaker 3: after rising 124% since October 2020.

After rising 124% since October 2010.

Speaker 3: has distributed inventory level as well from 10 months of consumption to 4 months.

As distributor inventory level from 10 months of consumption to four months of consumption.

Speaker 3: During this period we have strengthened our RIG Direct Service model by introducing digital integration service and reducing working capital reports.

During this period, we have strengthen our rig direct service model by introducing digital integration service and reducing working capital requirements.

Speaker 3: Today, 80% of our US RIC Direct customers are using our RIC Direct portal to integrate to other management processes. And our pipe tracer application is being used to make digital dialysis. Our sales in North America now reside close to 60% of our total.

80% of our UA series data customer using our rig direct portal to a degree.

Rate order management processes, and our title III application is being used to make digital stylist. Our sales in North America now represent close to 60% of our total sales.

Speaker 3: We are making a major investment to integrate our seamless and welded pipe production in source summary and expand the range of product we can produce.

Let them, making a major investment to integrate our seamless and welded pipe production is for summary, and expand the range of products, we can produce domestically.

Speaker 3: The trade case raised by our Weld type competitors against our imports from Mexico has been dismissed after a final determination of the trade.

Trade case raised by our welded pipe competitors against our input from Mexico has been dismissed.

After the final determination of injury.

Speaker 3: The offshore market is also recovering, so at a different pace. And that recovery is mainly taking place in Latin America, in the region, in Guiana, in Mexico. In Brazil, we are complementing our traditional supply of large diameter welder casing to Petrobras. We've seamless medium diameter casing, completed with Doppler's connection and direct services, as well as seamless riders.

Yes, so market is also recovering.

Different piece and that recovery is mainly taking place in Latin America <unk> in Brazil, we are complementing our traditional supply of large diameter welded casing to Pedro Vanessa we've seamless medium diameter casing competed with hopeless connection and lead data services as well as <unk>.

Seamless risers.

Yes.

Speaker 3: We were recently awarded a 10-year contract to supply the casing requirements, including large diameter connectors, ductless connection and pipe management service for the largest development in the region.

We were recently awarded a 10 year contract.

Supply the casing requirements, including large diameter connector topless connection and five management service for the largest development in the future.

Speaker 3: Onshore market in Argentina and Colombia is also recovered from the pandemic load. This week in Argentina, the government has issued the decree of the rising approach to build a major new gas pipeline from Neuquen in Vaca, Moerta, to Buenos Aires.

Onshore market in Argentina, and Colombia is also recover from the pandemic loss. This week in Argentina. The government has issued a decree yield horizon a project to build a major new gas pipeline from <unk>. A couple of last two winters items. This would enable the father of spectrum expansion of drilling activity in the <unk>.

Speaker 3: This should enable a further expansion of drilling activity in the Waka-Moeta shear formation and reduce the need for future LNG.

Back on whether it's a shale formation and reduce the need for future LNG imports.

Speaker 3: In the Middle East, the recovery is at an earlier phase, and our sales during the year were affected by the stocking of excess in the region.

Let me at least that the recovery is it an area that is fees and I'll have seen during the year were affected by destocking of excess inventories.

Speaker 3: We have one important long-term tender for supply to major customers in the United Arab Emirates, where we have introduced our RIG direct service, in Qatar, where we are providing a full range of OCTGN line plates and ECU-A.

We have one important long term tenders for supply to a major customer in the United Arab Emirates, where we're having to reduce our rig direct service.

Where we are providing a full range of CTG and line pipe any quake.

Speaker 3: We expected significant recovery in our season from the second quarter of 2018.

We expect a significant recovery.

From the second quarter of 2022 and.

Speaker 3: In another market, our sales to industrial market has also recovered. Of our particular note is the expansion of our sales of fuel components for airbags. Where we are currently completing an expansion of a component's volatility in China.

Another market our sales to industrial market is also recover.

A particular note is the expansion of our sales of tubular components for airbags, where we are currently completing an expansion of our components volatility in China.

Speaker 3: Out of even our main customer in this segment, the recently awarded us with their 2021 Pets Supplier Award.

I will tell you that our main customer in this segment.

Currently awarded US with their 2021 best supplier Award.

Speaker 3: Over the course of the year, we have confronted significant role material and logistic cost increases. And more recently, we have seen an unprecedented surge in energy cost, which is affecting our European...

Over the course of the year, we are confronted significant raw material and logistic cost increases and more recently, we have seen an unprecedented surge in energy cost, which is affecting our European operation.

Speaker 3: A large part of these increases are already embedded in our fourth quarter results.

And that is part of these increases are already embedded in our fourth quarter results.

Speaker 3: We are advancing on the road map we set out to reduce the carbon emission intensity of our operation and achieved the 2030 target we set for our

We are advancing on the road map and we set out to reduce the carbon emission intensity of our operations and achieved 2030 target we set for ourselves.

Speaker 3: Yesterday our board approved a 190 million investment project to build a wind farm in Argentina which will supply close to 50% of the electrical energy requirement of our Ciderca integrated seamless pipe production.

Yesterday, our board approved.

<unk> $190 million investment project to build a wind farm in Argentina, which will supply close to 50% of the electrical energy requirement of our CD Erica integrated seamless pipe plus a year.

Speaker 3: This is an important initiative in a country where there are limited incentives for projects.

This is an important initiative and are currently where there are limited incentive for a project of this nature.

Speaker 3: We have developed and tested specific material chemistry for using hydrogen applications and introduced a new brand, Cera.

We have developed and tested specific material chemistry for using hydrogen application and introduced a new brand Sarah.

Speaker 3: States of terapist storage vessel system for hydrogen and the fueling station are growing strongly. Is that our seeds for other low carbon energy?

Sales of data storage vessels for hydrogen refueling station at growing strongly.

Is that our sales were either low carbon energy applications. This product theater present, however, only a minor proportion of our overall risk.

Speaker 3: This product still represents, however, only a minor proportion of our overall...

Speaker 3: Over the past year, Tenaris has recovered strongly from the impact of the pandemic.

Over the past year Dinaric recovered strongly from Deepak of the pandemic.

On the energy market.

Speaker 3: Why strengthening our global divy and supporting our customer in a challenging and fast-moving?

By strengthening our global leadership and supporting our customer in a challenging and fast moving items.

Speaker 3: Thank you and we are prepared to receive you.

Thank you and we are prepared to receive you would do.

Dress is affected.

Speaker 1: As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster.

As a reminder to ask a question you wanted to press star one on your telephone.

Withdraw your question press the pound key please standby, while we compile the Q&A roster.

Speaker 1: Our first question comes from the line of Ian McPherson from Piper Sandler. Your line is now open.

Our first question comes from the line of Ian Macpherson from Piper Sandler Your line is now open.

Hello, Thank you for taking my question.

Speaker 4: You mentioned in the earnings release that you expect a continuing expansion of your EBITDA margin through the first half. And I know that some of your international markets are expected to accelerate from Q2 forward. But I wanted to ask for a little more detail with regard to where margins can go. And I think also from the prior call, we were looking for a minimum or approximate 15% revenue growth from Q4 into Q1. I wanted to get a refresh on that out. Thanks.

You mentioned in the earnings release that you expect to continuing expansion of your EBITDA margin through the first half and I know that the international some of your international markets are expected to accelerate from Q2 forward, but.

I wanted to ask for a little more detail with regard to where margins can go and I think also from the prior call. We were looking for a minimum.

Or approximate 15% revenue growth from Q4 into Q1, I wanted to get a refresh on that out thanks.

Speaker 3: Thank you, Jena. First on the overall revenue.

Thank you.

Yes.

First on <unk>.

The overall revenue.

<unk>.

Speaker 3: You are correct. We continue to estimate our revenue increase for the first quarter in the range of the mid-teens. And also we estimate that our margin for the first Q will be slightly higher than the margin we had in the fourth Q.

You are correct, we continue to estimate our revenue increase for the first quarter in the <unk>.

<unk>.

And also we estimate that.

Our margin for the first few will be slightly higher than the margin we head into Q4 Q.

Very good item into the company is continuing to grow.

Speaker 3: very good. And the company is continuing to grow.

Speaker 4: I was intrigued, Paolo, by the comment regarding the development of wind power to support your Argentine operations. Is that a big ticket CAPEX item? Can you talk about the expenditure as well as the timeframe and maybe just a general comment on CAPEX for the company this year as well?

I was intrigued powered by the comment regarding the development of wind power just to support your Argentina operations is that a big ticket Capex item can you talk about the expenditure as well as the timeframe.

And maybe just a general comment on Capex for the company this year as well.

Speaker 3: Well, if I understand your question, you're referring to our investment in the wind farm in Argentina. We launched the investment now. The overall investment will be in the range of 109 million. We expect to put the wind farm into operation by August 2021.

Well.

Understand your question.

Turning to our investment in the wind farm in Argentina, We Lounged, yes investment now deal that our investment will be in the range of $109 million, we expect to book to Bill to the wind farm into operation by August .

2020, so the investment will be basically distributed along the stack.

Speaker 3: So the investment will be basically distributed along this time. This investment will raise our expected investment for 2022.

These investments.

Weighted to raise that our expected investment for 2022.

Go ahead.

Speaker 3: We will end it up and we have in mind with this investment to be in the range of $450 million for the year including.

We ended up and we have in mind that with this investment.

To be in the range of <unk> $50 million for the year, including.

These days.

Perfect. Thank you Paolo.

Thank you. Our next question comes from the line of Ben rationale from Coker <unk> Palmer. Your line is now open.

Speaker 1: Thank you. Our next question comes from the line of VIV Vashna from Coker Palmer. Your line is open.

Thank you for taking my questions.

Pretty impressive quarter, so kudos to that.

Speaker 5: Maybe I think like people are or investors are a little bit worried about are we reaching peak margins over here? And I know you've got you guys talked about margins improving in one queue and probably again in two queue. Maybe if you can help...

Maybe I think people are.

Our investors.

Worried about are we reaching peak margins over here and I know you guys talked about margins improving in <unk> and probably again in <unk>.

Maybe if you can help think about.

I would kind of be around $600 a ton of EBITDA.

Back in 2013, 2014, but closer.

Closer to say $150 a ton.

Speaker 5: what the prices are doing for commodities is there a pathway of go reaching from the 600 to maybe 700

Given what the prices are doing for commodities is there a pathway of reaching from the 600 to maybe see when anything on any 50 ton.

That we saw earlier.

Speaker 3: Thank you, Vebes. Well, as you are saying, we are anticipating a slightly higher extended range of about 24,000 feet or La

Thank you.

Well as you are saying we are debating.

Slightly higher.

Managing.

In the coming quarters.

Speaker 3: And our ABDAP return with all increase. I won't give a precise number, but for sure it will increase. You know, in our sales they will be some projects and some area in which we have still some price that are not reflecting today environment and are affected by the increasing cost of energy. Okay. And on the other side we have increasing my in price.

And our EBITDA per ton with also increase I won't give a precise number but.

But for sure it will increase.

OFC to say there will be some project in Saudi Arabia.

We have.

<unk>.

Some price that are not reflecting today in value at a mandate and that affected by the increasing cost of energy in some case and on the <unk>.

Other side, we have a crazy.

Prices.

Speaker 3: in other regions. So overall combined we expect an increase in EBITDA per tonne without giving a precise figure.

In Egypt. So overall combined we expect an increase in EBITDA baton without giving a precise figure.

Got it got it.

Completely fair.

Speaker 5: Maybe if you can talk about the welded pipe supply demand situation in the US.

Maybe if you can talk about the welded pipe supply demand situation in the U S.

<unk> talked about you are increasing.

Your capacity for development by maybe if you can talk about how does that supply demand dynamics. It looks today and then also.

Speaker 5: 5 maybe if you can talk about how this that supply demand dynamics looks today and then also going forward if the HRC scrap prices are falling how does that impact?

Going forward in.

Josh the scrap prices are funding how does that impact your margins and what's the lag.

Speaker 6: Well, on the first question, we are ramping up our welded type production because the price of the hot roll coils went down abruptly, pretty abruptly in the last month.

Well.

The first question.

We are ramping up.

Well, despite the action because.

The price of hot rolled coils went down a bit.

Roughly <unk> of that.

Commencing.

Speaker 3: I personally think that it is also the pressure of cost.

I personally think that.

So on <unk>, so the pressure of cost.

Speaker 3: We are close to levelling up for the hotel coils and there are signs in the national market that are showing even some rebound in price of left and price of hotel coils outside the United States. So we are close to

We are close to level a level enough for the health of our core is.

And there are signs in Asia markets that are showing.

And Sam rebound in price of labs and price are both are of course outside tonight to see so.

We are close to.

Speaker 3: some leveling of this. In this environment I think there is a some scope for where the production

So some leveraging of these.

In this environment I think there is scope for welded production data within limits because.

Speaker 3: within limits because the nature of drilling today, the extensive use of seamless and he treated the demanding product in the production casing for the column is leaving a space to welded which is probably not as extensive as it was historically in the past.

The nature of drilling today.

The extensive use of seamless in Q3, the demand in product into production.

Casing for the call alumina is.

Leaving as phase II, which is probably.

Really not as extensive.

As it was historically in the past so the resume that.

Speaker 3: We are ramping up for the specific product in which we feel that well that could complement our products offering. And we expect that also other producers may raise production of well-paid products.

We are.

Ramping up for.

For the specific products the NIH.

We see that the complement.

This offering.

And we expect that to also other producer may.

Raised production.

Of <unk>.

Okay.

Speaker 3: over to start the facility, hiring people and so probably this will be a slow process. I mean it sounds like overall if I just you talked about mid-tens growth and maybe modestly higher margin sequentially so that gets you like 550 about 15%

Sure.

Okay.

And to start up the facility hired people and Phil.

Yes.

Probably they will this will be a slow process.

I mean, it sounds like.

If I guess.

You talked about mid teens growth and maybe modestly higher margin sequentially. So that gets you like 550 about 15% higher versus street it seem.

Like the EBITDA, you talked about the EBITDA by ton still improving.

So it seems like the EBITDA from Lincoln you should continue to modestly improve.

That's my last question I am I was reading.

Reading that correctly.

Okay.

Speaker 3: Sorry but I didn't sketch exactly what your point is on this question. All I'm saying is based on your guidance for the 1Q, Ibedar could shake out somewhere around 550 million for the first quarter.

Sorry, but I didnt catch exactly what you would upon so anyway, it's going to be as good.

What I'm, saying is based on your guidance for the <unk> EBITDA could shake out somewhere around 550.

<unk> million dollars for the first quarter and it seems like based on what visibility you have the EBITDA im not trying to get you to a number I'm just trying to see directionally that EBITDA should improve from Q as we go into 2022.

Speaker 5: the Ibedar, I'm not trying to get you to a number. I'm just trying to say, if, directionally, the Ibedar should improve

Speaker 3: Yes, basically if you listen to my anticipation of the revenue line and on the margin, you may have an idea of where we are heading.

Yes, basically yes.

Listen to my anticipation of the revenue line and on the Bad G&A you may have an idea of where we are heading now.

That's very helpful. Thank you for taking my questions.

Thank you. Our next question comes from the line of Conor <unk> from Morgan Stanley . Your line is now open.

Speaker 1: Thank you. Our next question comes from the line of Connor, Lanay from Morgan Stanley . Your line is now open. Yes, thanks.

Yes. Thanks, I wanted to follow up on something you were saying in response to one of <unk> questions, which I thought was interesting.

Speaker 7: to one of Ed's questions, which I thought was interesting. It seemed to be you were saying that you think there's actually sort of a stickiness to the market share gains that Seamless Pipe has had in the US. Historically, the US has been sort of mixed between welded and seamless. I'm curious, is that specific customer comments that are leading you to believe that? Or is that just sort of a high-level view of where production is going to be? What's driving that?

Seem to be you were saying that you think there is actually sort of a stickiness to the market share gains that seamless pipe has had in the U S. Historically the U S has been sort of mixed between welded and seamless I'm curious.

Is that is that specific customer comments that are leading you to believe that or is that just sort of a high level view of where production is going to be whats driving that thought.

Speaker 6: Well, I think I can turn to Luca for cementing on the relative position of seamlessness and welded over time and what we see looking ahead.

Well.

I think they can turn to Luca for.

Symantec.

The relative position of seamless and welded overtime.

What we see.

Looking ahead, okay. Thank you. Thank you.

Speaker 8: Paolo, Monica, look, what we have seen over time is that as the laterals go and the productivity of the rigs increase, our customer base is more...

Follow up kind of Monte Carlo.

Luke.

Yes, we have seen over time is there is a lot that answer.

Joe and the productivity of the rigs in Giddings.

Cash flow matter at least our customer base that is.

More.

Speaker 3: say keen in using seamless for some application. I'm referring particularly at the production casing. Now if you consider the production casing within the lower 48

Keen in using seamless.

For some application application.

Particularly.

The production casing now if you can see that the production casing, we've seen that the lower.

48.

Speaker 3: scope is a large portion of the market. We would say that in this production casing, we would say that 80 to 85% of the market is seamless to a certain extent. And so this represents a major advancement which in our understanding is linked to the application.

Scope is a large portion of the market that we would say that in these production casing.

We will say that that 80% to 85% of the market is seamless lift over the next thing installed diesel represents.

Yes.

A major advancement debt, which in our understanding is linked to the application.

Speaker 3: And this is basically where we found our statement that the seamless has gained a position that is more sustainable in the long term.

And this is basically where we found our statement that as seamless as gain acquisition Ana that is more sustainable in the long term.

That's interesting.

So I guess.

Speaker 7: The question is sort of related, but basically, if you look at supply today, certainly there's been a lot of news that pipe is very tight within the US, and certainly seamless pipe is mostly what this is referring to. Do you see potential for significant increases in imports to alleviate the pressure there, or do you think that domestic wealth of mills are going to have to fill the gaps?

The question is.

Related.

But basically if you.

You look at supply today, certainly theres been a lot of news that the pipe is very tight within the U S and certainly seamless pipe is mostly what this is referring to do do you see potential for significant increases in imports to alleviate the pressure there or do you think that domestic welded mills are going to have to fill the gap.

Speaker 6: You are right that the market is being tight. If you consider that the pipeline logic increased by around 120% in money. So this is also a reflection of this. On top of this, the level of inventory went down substantially. Today we have around four months of inventory on the ground. So the condition.

Okay.

<unk>.

You are right that the market is being tied to if you can see that the pipe logic increase by around 120% in linear so.

This is also a reflection of these on top of this at the level of inventory went down substantially and today we have.

Four months of inventory on dig it out so the condition.

Speaker 9: that where basically putting pressure on the market one year ago, now are kind of disappearing.

We're.

Basically putting pressure on the market when a year ago now are kind of disappearing.

Hey, Mark.

Yes.

Speaker 10: inventory and also the very high price of the petrol coil during 2021. It was discouraging weather.

Volatility and also the very tight price over the ultra.

During 2021 was discouraging with now.

Speaker 10: Uhh, I think it was important that I...

I think on in part.

<unk>.

Sure.

Speaker 10: to create a measure of containment and the negotiation of a grim.

And a measure of <unk>.

Containment.

Sure.

The negotiation of the agreement.

Speaker 10: Europe , Japan, limitation, there has been a steady show of time, like, to try to, I read, to some extent, slowing down or, in my view.

Europe , Japan limitation.

That has been established with time I'd like to try to to some extent.

Slowing down or you may view.

Speaker 10: preventing an increase of import at a very fast pace. But look, maybe you can either unmute you on import.

Preventing an increase of employment at a very fast pace that Luca maybe you can add there on your view on it.

Speaker 3: Yes, Paul, thank you very much. No, I believe that you fairly summarized the situation. When you look at the imports, even if you see...

Yes, I will thank you very much I.

I believe that you will fairly summarize the situation when you look at the imports even if you see at the recent developments over the last DSO, we don't see.

Speaker 3: at a recent development. So over the last year, we don't see import jumping up very, very fast. And when you do some math, you see you realize that actually there are not many places that can increase when you take into consideration all the different trade restrictions that we have in place.

Important jumping up.

Very very fast and when you do some math.

Youll realize that.

Actually there are not many places that can increase when you take into consideration all the different legislation that.

We have in place.

Speaker 3: At least this is a spread we can see in the minimum terms. Then, long-distance drama is always very difficult to anticipate.

This is Scott.

We can see in the medium term longer term is always very difficult to.

To anticipate.

Speaker 10: I appreciate that. I think the current is a response of this. You know, the increase in our ramp up in our facility is contributing to satisfying no increase in demand. And there will be some increase from the weather type also over time.

Alright, I appreciate it I think this.

This is Ed is also they set.

And then data increasing our.

The ramp up in our facility is contributing to satisfying the increasing demand and there would be some increase here from the web titles so over time.

Yes understood. Thank you.

Speaker 1: Thank you. Our next question comes from the line of Nick Constant Tankus from D&T Parabas. Your line is now open.

Thank you. Our next question comes from the line of Nick constant Qantas from BNP Paribas. Your line is now open.

Speaker 11: Hi guys and thank you for taking my questions.

Hi, guys and thank you for taking my questions. Two if I may. Please I just wanted to ask a clarification around the antidumping case, you say it was dismissed or was it just that for Mexico, what about the other regions and when are we any any more color around that would be helpful. Secondly, even with <unk>.

Speaker 11: I wanted to ask clarification around the anti-dumping case. You say it was this major was invest that for Mexico, what about the other regions and where are we? Any more color around that would be helpful.

Speaker 11: Secondly, even with some working capital absorption to be expected, 2020 tools have pretty solid cost of generation and positive free cost...

Some working capital absorption due we expect 222, just helps pretty shortly consequent generation and positive free cash.

Speaker 11: Can you just remind us your priorities around capital location and in particular, how do you feel about M&A at this point in the cycle and in this cycle in particular?

Just remind us your priorities around capital allocation in particular, how do you feel about M&A at this point in the cycle in recycling in particular, thank you.

Speaker 6: Thank you. First, I'll clarify a point on the decision by the Canadian authority to dismiss the case against import from Mexico to Canada based on finding of knowing.

Thank you firstly a clarification.

On the.

The decision by the Canadian Authority to these meet the keys good input.

From Mexico to Canada, they've done.

The finding of no injury.

Speaker 10: This is a good result, it's showing that this moment has been no injury caused by Mexican important into Canada.

This is a good result, showing that.

These moment there has been no injury caused by Mexican.

Importantly into Canada.

This is Dave.

I think it's important to be also.

Speaker 10: I think it's important because also...

To some extent, creating a precedent for the decision on the injury in the end.

Speaker 10: Some extent creating a precedent for the decision on the injury in the anti-dumping case in the United States. It is difficult to prove injury today in a moment in which the type of industry in the States is not the case.

The dumping case in the United States.

But if you go to prove injury today in a moment in the leach tied to industry in the states.

Speaker 10: is having record results. Did you know what argument in Canada, and I think it also will be a good argument in the case of UI.

Is having a record result.

Argument.

And I think he is also will be a good out of your maintenance.

In the case of U S.

Speaker 6: As far as the location of capital is working capital, you know, the growth in the market is pretty strong, the growth in our sales is strong, and we are support.

As far as the.

Location of capital working capital.

The growth in the market.

The stronger.

The growth in our faith is stronger and we are supporting.

Speaker 10: This increase with an increase in our working capital. The days that we have overall in our working capital are in the range of 160, 665 days looking back, no? This is due also to our model. We are being direct, are arriving straight to the client. When the demand increase, we are increasing our working capital, also greeting our trading people.

Do you think there is at least an increase in our working capital days.

As we have over at all in our working capital as in that Angel.

60, 65 days looking back now.

This is <unk>.

So to our model that we are a lot of the data.

<unk> today to the client.

The amount of the <unk>.

The increase that we're increasing our working capital as a good evening.

Great.

Speaker 6: But that, on the long run, we expect to be able to reduce these days, over all, to a range of, what other than 30 or something in this range. So, we think that over time...

But.

On the long run we expect to be able to reduce these days so it old without any of that into the age of what either the third Yosemite and decent age. So we think that over time.

Speaker 6: The allocation of capital to working capital when the market is stabilized and we will limit growth.

The allocation of capital to working capital.

Yes.

Okay.

The market.

Stabilize and we will lean into growth.

Or so.

Speaker 10: We have a mission target in the digitalization of our supply chain to reduce the lead time in the mail and to reduce the lead time in our chain.

We have.

Scott.

Digitalization of our supply chain to reduce the lead time and the mainland to reduce the lead time.

You will have also to take into consideration and catheter locations, where he got it got it.

Speaker 10: You have also taken into consideration in capital occasions working capital that looking at the disruption in the supply chain, in freight, in production of some of our input, we have been conservative in having some level of high inventory in areas in which we were more exposed to delay by our supplier or to disruption in the supply chain. It's the moment in which we prefer to be.

Yes.

Looking at the.

The disruption in the supply chain in freight and production of some of our input we have been conservative in that having some level of heightened regulatory in areas in which we were more exposed that can be laid by our supplier.

Disruption in the supply chain is evolving thing, which we prefer to be.

Speaker 6: on the safe side in our facing market that is gold. On the last point,

On the safe side in our cities and facing a market that has growth.

On the last point.

On M&A.

Speaker 10: As always, we are looking at our strategic position, why the position in every region and in every segment that could contribute to the strengthening of our long-term positioning in face of all the difficult circumstances that we may face in the different parts of the world. So we keep...

As always we add.

Looking at our strategic position worldwide position in every region.

Every segment.

That could contribute to the strengthening of our long term.

Positioning in face of all.

While the difficult circumstance.

Then we may facing into different parts of the world. So we keep.

Speaker 10: open this as an option to strengthen our strategic position in the different positions.

Fulton.

As an option.

To strengthen our strategic position in the day.

Kind of feature.

Thank you.

Speaker 1: Thank you. Our next question comes from the line of Alan Spence from Jefferies. Your line is now open.

Thank you. Our next question comes from the line of Alan Spence from Jefferies. Your line is now open.

Thank you.

Question about the wind farm.

In terms of its production.

If I'm thinking about this the right way the reduction works out to about 0.05.

Speaker 12: And thinking about this the right way, the reduction works out to about 0.05.

To put a ton of steel on your global operations basis, which would mean that by the end of 'twenty four.

Speaker 12: To mean that by the end of 24, you've achieved roughly two-thirds of your 2030 target to reduce the intensity by a third.

Roughly two thirds of your 2030 target to reduce the intensity by 30%.

Is that the right way to think about it and then if you could just talk a little bit about what else you'll be doing to achieve that target and I've got another question I'll ask after that.

Speaker 12: about what else you'll be doing to achieve the target. And I've got another question all off.

Speaker 13: And when I think this is the direction in which we are doing today, we are, we had in 2021 intensities, specific intensity of CO2 in scope one, two and three of around 1.2 tons of CO2 per ton.

Right.

I think a D C. The direction in which we are doing today we are.

We had in 2021.

Intensive species specific intensity.

While still too in scope, one two and three of around one two tons of steel to put it on wall Street.

Speaker 6: Our target for 2030 is to arrive to 0.90 glass 98. Now the the wig farm will support, let's say some close to 3% reduction of our global intent.

Sure.

1030 is to arrive to zero point to 90 last 98.

Now the.

The windfarm Matt.

Will.

Supporter.

Let's say.

Close to 3%.

A reduction of our global intensity because.

Speaker 6: because it will contribute to substantial reduction of CO2 emission in our Argentinean operation, but will the impact on the over-routine areas will be in the range of 2.5 to 3% of our CO2 intensity.

It will contribute.

To a substantial reduction of steel to admission in Argentina in operation, but will be impact on the overall dynamics would be in the range of.

Two 5% to 3%.

Yes.

Of our field too.

Density per thoughts.

Speaker 6: We are complementing this with many other steps, but this is pretty relevant one. The other steps has been implemented as being.

We added complemented this with many other steps, but this is pretty relevant.

The other steps being implemented as being that.

Speaker 10: the shift of production of large diameter pipe to a single rolling operation in Dalmina.

The shift of production for large diameter pipe with <unk>.

Rolling operation and Dominik.

Speaker 10: another important saving for gas energy and CO2. And likely when we complete, they face out of our Japanese operations that are mainly based on the flat furnace, we will probably also, we will for sure, do another step. So step by step.

Another important savings gas and as you enter Q2.

And.

Likely the when we complete the phase out of.

Our Japanese operation that are mainly based on that.

We will probably also we will for sure.

Another state so step by step.

Speaker 6: we get closer to the target.

Yes.

Get close to that.

Yes.

Target.

Speaker 12: My second question is about working capital. I know it's early in the year, but just with the view of a good demand outlook. Any rough estimates of what you think your working capital requirements will be this?

Thank you that's very helpful.

My second question is about working capital I know, it's early year, but just with the view of it a good demand outlook.

Any rough estimates of what you think your working capital requirements will be this year.

Speaker 10: As I mentioned Alan in the previous question, our aim is to arrive to a level of 130 days by the end of this year, looking back.

As I mentioned.

In previous question I mean, our aim is to arrive at a lower level of 100 and.

<unk> 30 days and by the end of this year looking backwards.

Speaker 10: Today we have in the range of 165, 176. This means...

Hey.

We have in the range of 165 seven.

Thanks.

These means.

Speaker 10: that in the end or in the first, broadly, in the first one after, even after having paid dividends, we expect a positive cash flow for the company, a significant positive cash flow for the company, also due to a reduction of capital allocation to working capital over the next few years.

That is the end or in the first.

Broadly.

Even after having paid dividend, we expect positive cash flow.

Our company has significant positive cash flow for the company also due to.

Reduction of capital allocation.

Working capital.

<unk>.

Alright, thank you.

Speaker 1: Thank you. Our next question comes from the line of Frank McGann from Bank of America. Your line is now open.

Thank you. Our next question comes from the line of Frank Mcgann from Bank of America. Your line is now open.

Speaker 4: Okay, great, thank you very much. She have two questions if I could. Just to follow up on the ESG question or the wind farm question, you're doing it for 50% of the electricity needs at Cedaric and Argentine, I was wondering, is that just the first step? Could you go to 100% double the size of it? I realize there might be other issues in terms of...

Okay, great. Thank you very much.

Two questions if I could just to follow up on the ESG question or the wind farm question.

Youre doing it for 50% of the electricity needs.

Derek in Argentina, I was wondering.

Is that just a first step could you go to a 100% double the size of it.

There might be other issues in terms of.

Speaker 4: transmission capacity or other things that could affect that, but I was wondering what your thoughts are longer term. Could you do that in other facilities as well, in other locations to improve the carbon footprint that you have?

Transmission capacity or other things that could affect that but I'm. Just wondering what your thoughts are longer term could you do that in other facilities as well in other locations.

<unk>.

To improve the carbon footprint that you have.

And then.

Speaker 4: Well, I have two other questions. One, just similarly on the hydrogen strategy. I'm just a little, if you could provide a little bit more detailed update on what you're doing there. And then lastly, the Geneva sale, which obviously seems like it was very small, but it's one, it seems at least periodically you're selling off some of these smaller, less core.

Well I have two other questions one just similarly on the.

The hydrogen strategy I'm, just a little if you could provide a little bit more detailed update on what youre doing there and then lastly, the Geneva sale, which obviously it seems like it was very small, but it's wanted it seems at least periodically youre selling off some of these smaller less core.

Speaker 4: I'm wondering what the strategy is there is just to get rid of smaller operations that are not that core or is ESG part of what you're reducing.

Product. So I'm wondering what the strategy is there is it just to get rid of smaller operations that are not core or is ESG.

Part of part of why you are reducing.

Some of those operations.

Speaker 10: Thank you Frank. The first point on the farm, Argentina has a special condition. The wind farm in Argentina may have, like in B2K, is a very high efficient.

Thank you Frank is the first of a point on the farm.

Antena has.

Especially on condition of the wind farm in Argentina may have like in this case very high efficiency.

Speaker 10: above 55% so, especially as many as a man,

Above 65% so.

Special eliminated.

Speaker 10: special situation. Argentina, the wind farmer, will be in the southern part of the Buenos Aires province. He is an area we have sustained wind over time. He is a particular condition in which we think of.

Very.

Special situation, Argentina, the wind farm and would be in the southern part of the visit when those items probing.

An area, we've sustained wind over time.

Is it.

Particular condition in which we think.

Speaker 10: It makes sense to do first that. I don't think our aim in this moment would be after this to continue in Argentina to invest on projects of this size.

Got.

It makes sense.

To the first day I don't think our aim in this moment would be.

After this to continue in Argentina to invest.

Projects of this size.

Speaker 10: And in the other region we are analyzing other project

And in the other region, we are analyzing.

The other project.

Yes.

Speaker 10: that may contribute to the reduction of our footprint, but is

That may contribute to the reduction of our footprint.

But.

Is.

Speaker 10: Got to allow to modify the prototype unique interaction.

More difficult to identify projects it is similar.

In Mexico, the lab side.

Speaker 6: We are progressing and analyzing different technologies from the carbon, carbon, capture and usage or storage.

We are progressing in analyzing.

Different technology.

The caterpillar carbon capture.

Usage or storage yet.

Okay.

Yes.

Speaker 10: energy savings in our operation. We're working on the scope 3 reducing our purchase of high carbon input. Everything is compounding our roadmap for reducing this.

Energy savings.

In.

Our operation.

We're working on the scope three reducing our cheese.

Hi, Carter.

Everything is compounding a lateral to map.

What are you seeing fees.

Speaker 10: These are on the first question. The second question, we are trying to streamline and concentrate on, let's say, the core of our operation. The key to Geneva is very small meal.

Details on the first question on second question.

We are trying to streamline and concentrate on that.

Let's say the core of our operation and it gives you an Eva.

There.

There is more meal.

Speaker 10: Focus on a segment that is very different from our driver

On a segment that is very different from ours.

What would drive it.

Speaker 10: And so we are trying to focus the matches we can

So we are trying to focus as much as we can.

Speaker 10: in the core business of...

In.

In the core.

And that set of dynamics.

Speaker 10: And considering also the opportunity they may come from the energy transition, this would be a different story. We may get into the area of product, they may enhance or use our competitive advantage for advancing in the area of hydrogen or other energy transition related project. Our project for hydrogen, we are completing the one furnace in the...

And considering also the opportunity that may can still meet the energy transition. These would be a different story we may.

<unk> two <unk>.

Rail products that they may enhance or use our competitive advantages for advancing indeed of either general.

Other energy transition related project.

Our projects are either agenda, and we are completing therefore, the one furnace in.

Speaker 10: In Italy, we became, for all being heated by hydrogen. We have two pilot projects for testing the technology of carbon on capture. To see if we can identify technology that could be used in separating CO2.

In Italy.

We are capable of being.

He did a hydrogen and we have to fight those projects for.

Testing the technology of carbon capture.

To see if we can identify technology that could be used.

In.

Separating the two.

Speaker 6: A from our furnace it self.

From our foreign assets.

Speaker 6: And from the stand, if we can scale up this set.

And to understand if we can scale up.

<unk>.

Speaker 10: But these are all more Kiracans in Madrid so that there is limited scale

Okay.

But these are more R&D sort of limited.

Limited scale.

Speaker 6: but who only have translet it on over time.

Came back.

Only happens and they did.

Okay.

Okay, great very interesting thank you.

Speaker 1: Thank you. Our next question comes from the line of Alice Sandra Pote, from media banca. Your line is now open. Thank you.

Thank you. Our next question comes from the line of Alessandro Pozzi from Mediobanca. Your line is now open.

Thank you for taking my questions.

Speaker 2: And the first one is on the EBITDA progression. I understood that margins are expected to marginally grow quarter after quarter. But at the same time, I think we have a pending decision in terms of duties of imports in from from Mexico and Argentina into the US. And once their preliminary duties are imposed, I guess, I'm not sure whether you will be able to continue to import from Argentina, Mexico. Is that going to have an impact on margins or is that reflected already in the guidance you've provided us?

The first one is on the EBITDA progression.

I understood that.

Margins are expected to marginally grow quarter after quarter.

Same time, I think we have a penny.

The season in terms of duties the Vin.

Ports in format makes.

Mexico, and Argentina into the U S.

And once the preliminary duties imposed I guess I'm not sure whether you will be able to continue to imports from Argentina, and Mexico is that going to have an impact on margins or is that reflected already in the guidance yields that provided.

Speaker 10: As I tell you, and this was a point that we touched also in the last conference call, we always think there is a difficulty to enjoy in this and to go against the import for Mexico and Argentina in the present future.

And I tell you.

One other point that we touch also in the last conference call.

We think that is.

The difficult too.

Judy.

Yes.

And to go against the input from Mexico, and Argentina independent circumstances.

Speaker 6: So we are confident that it's the case in the end will be dismissed. Now, results, the final term issue will come between September or October . It depends from the timing of the final litigation, but I mean will be coming in the second part of 2022.

So we are confident in the data.

Raising the end would be these me now.

The result.

<unk> will come.

In September or October .

Defense around the timing of the final litigation, but will be coming in the second part of that.

And 'twenty two.

Speaker 10: For the time being, we are first of all planning on the scale up of our facility in the United States. The ramp up, as I mentioned in my prepared remarks, is very substantial. We are hiring people in all of the eight facilities in the United States. So we are positioning ourselves for any way an increase of production in the United States.

For the time being and we are at.

First of all planning on the scale out of our facility in the United States the ramp up.

I mentioned in my prepared remarks.

Substantial we are in the hiring people in all of the eight facility in the United States. So we are at.

<unk> our sales force.

Anyway.

Increased production in the United States.

Speaker 13: And it is how we are projecting the, let's say, our position. We are keeping in mind our projection.

And he said is how we add.

Projecting.

Let's say a regulation, we are keeping in mind in our projection.

Speaker 6: The fact that the new fertility are extending to some extent our supply chain are requiring some additional working capital This is something that you see today in our working capital some of this line of Production requiring moving ties from one place for the other moving Finish product and this is at the beginning

The fact that the new facility are extending to some extend our supply chain out of acquiring some additional working capital. This is something that youll see today now we're looking to have it done.

This lineup of those action requiring moving types from one place or the other moving semi finished products and this is it.

At the beginning.

Speaker 6: Let's say, front loading our working capital and this also results of our of this rampart. Over time, this...

Yes.

Let's say Frontloading a lot of working capital and is also a result of our of this ramp up.

That time.

He said I was saying before we thought about that.

Sure.

And with regards to the duties.

Dave will be cut.

In a duty on when there will be a client.

Sorry, I didn't get a decent.

I was wondering if there is a date for the preliminary duties on the inputs.

Speaker 13: already said viii. righty

Already set.

Preliminary.

Yes.

Speaker 6: Pont? I think you heard the anti-dense, the size of the preliminide duty on Mexico and Argentina.

To do this would be around to me in my understanding.

Is that the DLC.

Decide their preliminary duty on in Mexico and Argentina.

Okay. Okay.

Speaker 2: Thank you. My second question is on costs. I believe that you mentioned that quite a lot of costs have already been embedded in the Q4. I was wondering what, I mean, to what extent we will see an increasing cost in Q1.

Thank you.

My second question is on cost I believe that you mentioned that.

A lot of cost has already been embedded in the Q4 I was wondering.

What I mean to what extent, we will see an increase in cost in Q1.

Speaker 2: And probably there are some costs that are stickier, like logistical costs, but maybe some other costs linked to energy prices maybe could be less so if we see a normalization of gas prices. So maybe it can quantify the impact of the higher energy prices on EBITDA and whether at the moment you are buying gas in Europe on sports or using a long-term contract.

And.

It probably does some costs like logistical costs that maybe some other costs linked to LNG prices that maybe could be less so if we see another monetization of.

So maybe if you can quantify the impact of the high energy prices.

On EBITDA and where the at the moment.

Gas in Europe on spot.

Using long term contracts.

Speaker 6: And I mentioned in the opening remarks, large part of the increting cost is embedded in our cost of sales of the fourth quarter. But, I mean, because of the IFAres, there is a part of this additional cost that we are paying today, that we're also getting to our cost of sales of the first and the second queue. So starting today, the approval of? and fees, pop-up changes is part? in thisalu , or due to the

As I mentioned in the <unk>.

Turning to <unk>.

The.

That's part of the increasing cost is embedded in our cost of sales over the fourth quarter.

But.

And because of the asset.

The easy path of these additional costs that you are paying today that will also get into our cost of sales.

All of the first and the second Q.

The.

Speaker 6: We are buying energy in Europe , no doubt. As you know, we have power generation unit and we buy gas. In it and we buy power in Romania. We are reacting.

We are buying energy.

Europe no doubt.

You know we have a power generation unit, then we buy gas.

<unk> bye.

Our.

Duena.

We are.

Reacting.

Speaker 6: organizing our operation in the way that tries to minimize the impact, but the cost is there, no doubt.

Organizing our operation in a way that try to minimize the impact about the cost of debt.

And.

Speaker 6: We will have probably to face higher energy costs in Europe for a period of time. It's difficult.

We will have probably to face higher energy costs in Europe for <unk>.

The period of time is difficult to estimate.

Speaker 10: when there could be a normalization of energy equilibrium in Europe , but for the time being.

When that there could be.

<unk> normalization.

<unk>.

<unk> deliberately europa, but for the time being it.

Sure.

Speaker 6: Part of this is in our cost of our revenue.

Part of this is in our costs.

Speaker 2: Okay, you buying spot prices or you have long, long term contracts with your suppliers. We have a combination of long term, short term, I mean, is a mix of contract and also spot.

Okay, you are buying spot prices or you have them.

Long term contracts with the suppliers, we have a combination of long term.

Sure.

Is it mix.

Of contracts and also spot.

Alright, Thank you very much I'll turn it back.

Speaker 1: Thank you. Our next question comes from the line of Kevin Roger from Kepper, Shoe Thru. Your line is now open.

Thank you. Our next question comes from the line of Kevin Roger from Kepler.

Your line is now open.

Speaker 14: Yes, good afternoon. Thanks for taking my question. I have two actually. The first one is rated to the US because you mentioned the type supply on the seamless side. If we just focus on the seamless, I understand that the utilization rate of the city is already at 100%. Can you give us a bit of color on how much you can add in terms of supply from Mexico and Argentina currently on the seamless, but your capacity.

Yes. Good afternoon. Thanks for taking the question two actually the first one is related to the U S. Because you mentioned the tight supply from the <unk>.

Seamless side, if we just focus on the stimulus.

<unk>.

Utilization rates of BCG is already up 1%.

Can you give us a bit of color on how much you cannot just in terms of supply from Mexico announcing documents.

The seamless.

Capacity in terms of.

Volumes.

Speaker 14: to add to the country. And the second one is related to Middle East and Africa. I was running, she can update us on the bidding activity current, how do we stand compared to the pre-pandemic level in terms of volumes? And what do you see currently on the pricing side?

The country and the second one is really to keep the two middle East Africa was front range and the business on the bidding.

Activity.

How do we spend compared to the pre pandemic level in terms of volumes and what do you see currency on the pricing side because.

Speaker 14: on the paper, the pricing in the Middle East should in a way follow the bi-protection decks, but it has not reached the case.

On the paper pricing in the Middle East shooting the West followed the pipe <unk> index.

In the case of the past.

Speaker 14: months easy if I will understand so what's the situation on the pricing side now?

<unk> with them and so what's the situation on the pricing side now in the Middle East.

Please.

Speaker 10: Thank you, Kevin. Well, the first question about the overall mix of our sales, the share that is coming from Mexico, share that is coming from US. We find it a 10-way thing we want to do, understand. I think we have a balanced source. But maybe Luca could tell us with the ramp up of operation.

Thank you Kevin well the first question.

The overall mix of our sales.

Sure that is coming from Mexico share that is coming from U S refinery.

If I understand where they want to understand I think.

We have a balance.

Sure.

Maybe luca.

The ramp up of Asia on that.

Speaker 15: how will this make change? Good morning Kevin. Now, for competitive reasons we don't disclose all the details. However, I can tell you that once we have fully ramped up our team facility

How will these may change.

Good morning, Kevin.

Now for competitive reasons, we don't disclose all the details however, I can tell you that once.

We fully ramp up.

Sure.

Seamless facility.

Speaker 3: As I said before, actually Paul said before, Bay City is almost a full capacity and we are strongly ramping up on our Amrige. We're gonna be in the position of the Fending our position in seamless from the United States.

Which as I said before actually Paolo said before.

<unk> is almost at full capacity and we are strongly ramping up on our end.

Melissa we're going to be in the position of defending our position and seamless for them.

The United States.

Speaker 3: I don't know if this is helpful or you have other questions on.

I don't know if this is helpful or.

You have other questions on.

Speaker 14: It's a poor but it was just to try to estimate in terms of volumes how much let's say you can answer on the same next slide.

Alright.

But just to try to estimate in terms of.

How much let's say you can answer on the seamless sites in terms of.

Speaker 14: additional demands from the US but also from Mexico and Argentina. What's the maximum demand that you can...

Demand from the U S, but also from Mexico.

Maximum that you can.

So on the site.

Speaker 3: So well, what was the same before Kevin? We don't release this number for competitive reason, but what I can tell you is that once

Well as I said before Kevin we'd already Liza these number for competitive reasons, but what I can tell you is that once.

Speaker 3: execution of our ramp up, which is well underway in Bay City and it is coming up in an bridge. We want to be able to defend our position on seamless in the United States. And it is something that frankly we already envisioned before and we are ramping up the we started our ramp up already back in over 2020.

The execution.

Our ramp up which is well underway in <unk> and it is coming up and Enbridge.

We're going to be able to defend our position on that honestly Melissa.

The United States and this is something that frankly, we already envisioned before and we are ramping up.

We started our ramp up already back in October 2020. So this is part of a process that we already initiated another undertook.

Speaker 3: So this is part of the process that we already initiated and out of the undertook well before the anti-dumping case. Yeah, well, this is something that we started before and this part of our strategy for the...

Well before the Antidumping case, yes.

It is something that we started before and as part of our strategy for the United States.

Speaker 10: In the case of Canada for instance, after the case was launched and the dumping duty was established, we continue to export material from TAMSA and with the dismissal of the final, this money, the money paid for the duty will be rembourse to us.

In the case of Canada, putting intense after.

After the case was.

Lounge and dump.

Dumping duty was 70, we continue to export our materials on time.

And we've the dismissal of the sign.

This money the money paid for the duty will be reimbursed to us there.

Speaker 6: There may be something also occurring, similar occurring in the United States. I mean, depending on the duty...

It may be something else occurring similar occurring in the United States.

Depending on the duty.

No.

Speaker 6: We may decide what to do and how to organize our metrics.

We may decide what to do and how to organize our metrics.

Of supply.

Speaker 6: And so I have a second point, this concern. I mention in the remarks that relevance of the offshore in Latin America, but I would like to Gabriel to...

As far as the second client is concerned I mentioned in the Americas, the relevance of the offshore in Latin America, but I would like to grab it here too.

Speaker 6: So comment on your point on this.

To comment.

On your point.

On the.

Speaker 6: In the investment in Africa. Yeah. Yeah, yeah, thank you, Balou. Good morning, Geng. I think you were asking about...

Investment in R&D.

In Africa.

Yes.

Thank you Paolo.

Good morning, Gary I think you were asking about the.

Speaker 16: activity and some color in the Middle East and some price in the natural world. So in terms of activity, I would tell you that the drilling in the Middle East is showing a consistent recovery.

Activity on some color in the middle East and some pricing dynamics.

In terms of activity I would tell you that the.

Middle East is showing a consistent recovery.

Speaker 16: I consider that the core of the country is already producing at a similar levels to the end of 2019 but still the recon remains.

Consider that the core OPEC countries are already producing.

Similar levels.

Through the end of 2019, but still the rig count remains bill.

Speaker 16: below about 30% below those pre-pandemic levels. So there is a clear room for activity to continue to accelerate during the year, and I will leave this is gonna...

Below about 30% below those but pre pandemic levels. So there is a clear room for.

Activity to continue to accelerate during the year.

Really this is going to.

Speaker 16: gonna cure as we see our major customers contracting rick

Ghana, Coors, we see our major customers contracting rigs.

Speaker 16: So our say in the Middle East will remain so good in the first quarter, but we expect as Paul anticipated, the relevant jump starting in the second quarter as our large backlog of contracts of the UAE, Kuwait and Qatar Kekeens.

So I will say that in the middle East.

We remain subdued in the first quarter.

But we expect as Paolo anticipated relevant jump starting the second quarter.

So our large backlog of contracts okay.

Kuwait and Qatar kicking.

Speaker 16: South is also active. We have recently secured several contracts across different business segments confirming that stronger activity is coming ahead in the kingdom as well. Iraq has been quite active as well. We received calls of their nosy DG and we have awarded the pipelines as well. So we expect that from second quarter onwards, our revenues in the segment of Middle East and Africa will be running back to pre-pandemic levels.

Zalviso selective we have recent beliefs.

He also had contract growth different business segments.

Improvement stronger activity is coming ahead in the kingdom as well.

That has been quite active as well we received calls very nosy digi.

We have awarded pipeline as well so we expect that from second quarter onwards.

Revenues in the segment of Middle East and Africa will be running back to pre pandemic levels.

Speaker 16: Talking to our customers here in the region and reviewing their plants, there is a pretty strong...

Talking to our customers here in the region and reviewing their plans.

It is a pretty strong reception.

Speaker 16: that the outlook is quite positive that we are entering a multi-year growth cycle. So this is to give you some color and perspective on the following quarters on the region. Regarding the price dynamics and that comparison that you were making with the US.

The outlook is quite positive that we're entering a move here.

Growth cycle.

To give you some color and perspective on the on the following quarters on the region regarding the pricing dynamics.

Comparison that you were making with the with the U S.

Speaker 16: I think I need to clarify that the project dynamics in this area is

I think I need to clarify that the pricing dynamics and detailing the theories.

Speaker 16: substantially different from North America. We're facing a different, competitive environment to different business cycles.

Essentially the different from North America.

Are you seeing a different competitive environment different business cycles.

Speaker 16: So there is no very limited link to the pieblodics in it.

So there is no or very limited linked to the biologics index.

Speaker 16: Our main business here in the Eastern Affairs Association with local content positions, high end products.

Our mainly main business here in the second period associated with local content positions high end products and.

Speaker 16: and rigged edX services, which allow us to earn differential prices and margin. The dynamic here on our long-term contracts are following formulas. All the contracts with IOCs, the formulas have already been negotiated and already in place and we're going to start to see that.

And <unk> services, which allow us to earn the financial prices on margin dynamic here on our long term contracts are following formulas all the formula on the contract with <unk>.

We have already been negotiated and are already in place and we're going to start to see that.

Speaker 16: starting in early 2022. For the NOC, we have formulas as well, but this process will take a bit longer, we would be later in the year, typically there's an inertia, and a longer cycle with the NOC. And within our backlog also, it's important to mention the large pipelines that we have, Turkey and Qatar, because in this case, the prices are fixed, and this average price is...

Starting in early 2024, Vlccs, we have four minutes as well.

But this process will take a bit longer to be it would be later in the year typically there's an inertia.

On a longer cycle with the agencies and within our backlog also is important to mention the large pipelines that we have Turkey and Qatar because in this case the prices are fixed.

This average prices are below.

Speaker 16: the average of all CitiG as well. Regarding new offers, either for spot or long-term agreements, our new pricing has been repositioned according to the new input levels. And the market is reacting positively to this reset. We see a positive dynamic and we start to begin with new contracts, new business towards the year end or even into next year.

The average of all CPG as well.

Regarding your first either for support our long term agreements, our new pricing theres been real precision.

According to the new input levels.

Market is reacting positively to this reset.

See a positive dynamic in this win.

We start to begin with new new contracts new business.

Towards the year end or even into next year.

Speaker 17: Ok thanks, So forward. Thank you.

Okay perfect. Thanks, so much for all those.

Thank you Kevin.

Speaker 1: Thank you. Our next question comes in line of Carson Reak from Credit Suisse. Your line is now open.

Thank you. Our next question comes from the line of question Rick from Credit Suisse. Your line is now open.

Speaker 18: Thank you very much. A few questions left from my side. The first one is on Outlook. In your guidance, you mentioned the significant improvement in volumes from Middle East and Africa. Could you narrow the guidance, especially from Middle East, as we have seen in the past, or rather wide range here of volumes and sales achieved? That's the first.

Thank you very much a few questions left from my side.

The first one is on outlook in your guidance you mentioned a significant improvement in volumes from Middle Eastern Africa could you narrowed the guidance, especially for middle East as we have seen in the past, but rather wide range here of volumes and sales achieved that's the first one.

Speaker 10: Okay, thank you, guys, and again, Gabriel, I believe you focus a little more in the comments that we made on the outlook. Yeah, I think, well, Paulo.

Okay. Thank you guys Thats again, Gabrielle could you focus in even more in the comment that we made on the outlook.

Yes.

Paolo intermediaries.

Speaker 16: Yes, Paolo. So, Karsten, as I was just commenting a few moments ago, the guidance is for pretty much in range first quarter in the segment of Middle East and Africa compared to the fourth quarter. And a step jump in the second quarter going back to average is of a pre pandemic from there. And we believe that it would be a new step for the region going forward. Hopefully that clarify some color. But we might have missed.

Yes.

Paolo So carsten as I was just commenting.

<unk> ago.

The guidance is for <unk>.

Much in range first quarter in the segment of Middle Eastern Africa, compared to the fourth quarter.

On a step jump in the second quarter going back to averages over pre pandemic.

And we believe that it would be a new.

A new step for the region going forward.

Hopefully that clarifies I know you've given some color on where you might have missed.

Speaker 18: Perfect, I might have missed that. Sorry for that. The second one is more technical question. I still see that the depreciation and the CapEx levels are wide apart. Do you expect that gap to close? That means higher CapEx going forward, I believe apart from the aforementioned CapEx spending in ESG.

Perfect I might have missed that sorry for that.

The second point is more technical question I still see that the depreciation of the Capex levels are wide apart do you expect that gap to close that.

That means higher capex going forward.

From the aforementioned.

Capex spending in ESG.

Speaker 10: Thank you for this. I don't think that CapEx nor Reconzation should go.

Thank you for the <unk>.

I don't think that Capex.

Our recommendation should go.

Speaker 6: Let's say much higher because this 190 million for the wind farm is a pretty large investment. In general, we are in the range of 150 million in Periere to support also the ramp up of our operation in the U.S.

Let's see much higher because this 190 <unk> four.

The wind farm is a pretty large investment in.

In general we are in the range of $150 million in <unk>.

To support also the ramp up.

And of our operation in the U S.

Speaker 6: September is a specific large investment.

And that are decent.

Let's say.

Specific large investment.

Speaker 6: But I do not see a part from eventually special product or special project that may come from changes in the market. I do not see that we should change this level. This level should be sustained.

But I do not see a path eventually.

Special product or special projects that may come from changes in the market than I.

I do not see that we should change this.

Let's say this level these levels would be sustainable.

Speaker 6: You're perfect being the other You're perfect being the other

Perfect one that are there.

And then.

We can depending of the detail.

Speaker 18: Okay, perfect, perfect. Thank you very much. The other question I have in your statement, you mentioned...

Okay perfect perfect. Thank you very much.

<unk>.

The other question I have in your statement you mentioned.

Speaker 18: that the investments in oil and gas are unlikely to return to pre-pandemic levels and hints that would gas the volumes would be even less so given the inflation which we have.

That the investments in oil and gas are unlikely to return to pre pandemic levels and hence I would guess the volumes.

We'd be even less so given the inflation which behalf.

Speaker 18: how do we see the competitive environment going forward because at the other side we see actually new supply war uh... i don't supply coming back to the market could we see a more competitive environment uh... and if so what you believe that uh... the you will have players behaving more rational than in last cycle

How do we see the competitive environment going forward because that's the other side, we see actually new supply.

Idled supply coming back to the market could we see a more competitive environment.

And if so would you.

You believe that.

On the tubular players behaving more rational than last cycles.

Okay.

Yes.

Speaker 10: In my view, it is difficult to make a forecast because of the level of uncertainty.

In my view.

It is difficult to make.

Markus because of.

The level of uncertainty.

Speaker 10: is it worldwide that it may challenge some of the the the of the existing assumption. I mean it.

Is it worldwide remain challenged.

Matt.

All of the.

The existing ascension.

The cries of energy in Europe .

Speaker 6: This is a disruption in the energy that could come from the Russian Ukrainian conflict. You know, Russia is supplying 17% of the world gas and 10% of world oil. There are geopolitical tension and the energy transition also is facing challenges.

The disruption in the energy that could come from the Russian.

Great and conflict.

All rushing supplying 17% of the world's gas and 10% of <unk>.

There are geopolitical tension.

And that the energy transition also is facing challenges.

Speaker 16: because of the difference between expectation and what is actually happening and feasible. So I think this may change the way investor looking and company looking at FedM.

Because of.

The difference between.

Expectation and what is.

Actually happening in physical so so I think these may change.

The way investors are looking at the company and looking at investments in the oil and gas.

Speaker 6: We don't know yet, but I think that due to 2022.

We don't know yet, but I think that during 2022.

Speaker 10: we may have a sign of some different attitude.

We may have.

Sign of some difficult.

The dividend attitude.

So.

Speaker 6: We have seen a lot of discipline by the operator in different parts of the world.

We have seen a lot of discipline by the operator and deepen in parts of the world.

Speaker 6: When the pride was 80 dollars, if the pride stabilizes the foil in the range of...

When the price was $80 the price of it is of oil in the range of.

Speaker 6: 95, 100 dollar everybody will have to get back and think again and the gas issue is also relevant so I think that

The 95 $101 not everybody will have to get a bank and seem to gain and the gas issue is also lately.

So I think that.

In digital to make.

Speaker 6: Solid statement of which would be the level of investment must be the role of inflation in the year to come.

Solid.

The statement of which would be the level of investment.

So inflation.

Then we have to kind of what do we see as the short term.

Speaker 16: The long term is difficult to avoid.

But the long term it's difficult to operate.

Today.

Speaker 18: Perfect, but that has already. The last question is rather on the associate income, because in 2021 you have seen quite a substantial step up here in associate income from your participation in tenium, and using menas in particular.

Perfect that helps already.

The last question is from.

Rather on the associate income growth in 2021.

We have seen quite a substantial step up here in associate income from your participations in tandem.

Immune us in particular.

Speaker 18: What are your assumptions for 2022? Because I'm pretty sure the half a billion is a bit far off given the circumstances that the Brazilian steel industry is currently in. It looks like it's a little lighter. But could you share your assumptions here for that position because it does?

What are your assumptions for 'twenty to 'twenty two.

I'm pretty sure the half a billion.

Far off given the.

Circumstances, the Brazilian steel industry is currently in dollars it looks like it's a little lighter, but could you share your assumptions here for that position because cash relevant of course this fall.

Speaker 6: Well, you're right that 2021 has been an extraordinary year. Around your service side, you know, thearium has relied the cycle of investment. There is positioning the company very well.

Well Youre right.

2021 has been an extraordinary year.

Syed.

The Tam.

<unk> has realized the cycle of investment.

It is positioning.

<unk> funding.

Very well.

Essentially.

Speaker 6: in front of let's say growth in the American.

In France.

Offer.

Let's say.

Growth.

In the American market so.

Speaker 16: The result will be not the one, I think it will not be the one in 2021, but will be a very solid result for 2022.

The results would be.

Another one.

And I think of Adobe they won in 2021.

It will be a very solid.

<unk>.

Two.

Speaker 18: Perfect, that's fine. Thank you very much.

Okay perfect.

Thank you very much.

Speaker 1: Thank you, our next question comes to the line of Luigi DiVelli from Ecuador's Thym. Your line is now open.

Thank you. Our next question comes from the line of Luigi directly from Ecuador, Tim Your line is now open.

Speaker 10: Yes, good morning. Two questions for me. The first one on the prize is considering the amounts of play in the equation US and the low level of inventories. With expectation, you have about Pyplogics playing trend for the next month. Also considering the strong drop of oil. And can you remind us how much of your worldwide comp that are linked to the Pyplogics?

Yes, good morning, two questions.

The first one on <unk>.

Hi this.

During the months of supply.

I think which in the U S and the low level of inventory.

With this decision do you added about pipe logics price trend for the next months.

Also considering the sudden drop off.

Our protocol.

And can you remind us our macho brio worldwide contracts are linked to the pipe logics.

Speaker 10: And the second question on the US market, can you update on where do you see US recount by the end of which the current level of oil prices and topics are now spent by the oil companies? Thank you.

And the second question on the U S market.

Can you update on where do you see U S rig count by year end.

What level of oil prices and Capex announcement by the oil companies. Thank you.

Sure.

Speaker 6: Thank you, Luigi. Maybe you can look, you can...

Thank you.

Great.

Maybe.

You can look at you can you kind of comment.

Speaker 6: on the perspectives for the biology that we see today and the recount where we...

On the prospective for the technology that we see today in the rig count.

Speaker 8: Yes, on the on the biologics HLC supply demands here, but up to Practice there are playing on the one hand that is on the

Yes on the.

On the pipe logics HFC supply demand yet have it up to <unk>.

Because on the one hand that the strong demand and in our opinion.

Speaker 8: And in our opinion, the ramp up that the industry will need to put together to face with the demand.

The ramp up that.

The industry will need to put together a two faced with with the demand.

Speaker 3: The inventory level is extremely low. Now in our calculation, we are likely to be role for month. And this is historically low for this market. So there is also a matter of somewhat replenishing this inventory. And this certainly will tend to support the pipelines. Now, if it is true that the HRC going down is a threat, but as Paulo was saying, in most, this much better than the X-TELTVA, we should use that.

The inventory level is extremely low now in our calculation, we are likely to be low four months and this is historically low for four of these markets. So there is also a method of somewhat replenishing. This inventory and we certainly will tend to support that biologics now it is true that uhm.

<unk> wind down.

He is a threat, but as Paolo was saying.

This is much better that makes that with what we see this.

Downward trend.

Speaker 8: downward trend stabilizing. So, but in these two parts in the long term, it is very complicated because there are many factors displayed. Now, when we get into our prices, please remember that our prices, the data,

Stabilizing so.

Policy is prophylaxis in the long term is very complicated.

No.

Now when we get into our prices.

Please remember that our prices there.

Speaker 8: link to the biological and a significant way.

Got.

The biologics in a significant way.

Speaker 3: are usually suffering over a three months leg. So when you come to our prices, you want to see our prices increasing even if the banyak logics start turning, turning, turning ... turning again down.

Usually software Inga ore.

Over a three months lag so when you come to our prices.

Our price is equal.

Zynga, even if biologics.

Finding funding.

Pending at all.

Speaker 3: And this Friday's video's market is concerned, I'm after a big jump during 2021 now.

And as far as the U S market is concerned.

After a big jump during 2021.

Speaker 3: and reading and studying water, E&P operators are using as a budget, we see.

Leading starting water E&P.

Great.

We are using is a project that we see.

Speaker 8: Increase in the activity coming through 2022. Of course, we don't expect to see the same pace, but we still see a solid. A solid increase. Now, when we get to what I was saying, you need to consider that probably you're going to have a bump, a jump, you do the fact that some of our customers are.

Increase in the activity going through 2022 of course, we don't expect to see the same pace, but we still see a solid.

It's only because now when we get well I will say is that.

You need to consider that.

Okay.

Jump up due to the fact that some of our customers.

Speaker 8: Let's say consolidating some acquisitions that are not fully within their full scope of operation. And this I'm talking about the 2022, please the first semester.

<unk>.

Consolidated in some acquisitions that are now fully with EMA.

The full scope of a very strong and this I'm talking about.

The 2022, please the first semester.

Thank you Luca.

I think this was the last question.

Yes.

Speaker 16: Program or the question.

Yes.

So.

There are no.

The other question.

Anthony.

As a pioneer of the country.

Speaker 6: Thank you very much, so thank you everybody for attending the conference call and good luck to everybody. Thank you.

Thank you very much so thank you everybody for attending the conference call.

Good luck to everybody. Thank you.

Speaker 1: Thank you. This is the close to today's conference call. Thank you for participating. You may now disconnect. connect.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

[music].

Speaker 19: I.

[music].

Speaker 19: Really.

[music].

Speaker 1: Good day and thank you for standing by. Welcome to the Q4 2021 Synodys SA Earning Conference Call. At this time, our participants are in a list in only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone.

Good day, and thank you for standing by and welcome to the Q4 2021 Senates SA earnings Conference call. At this time, all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session. Joe asked the question. During the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today Giovanni started danya.

Speaker 1: Please be advised for today's conference is being recorded. If you're requiring further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Giovanni Sardanya. Please go ahead.

Please go ahead.

Speaker 3: Thank you, Judy, and welcome to the NARAS 2021 12th quarter and annualized conference call.

Thank you Gigi.

Welcome to demolish 2021 fourth quarter and annual results.

This conference call.

Speaker 3: Before we start, I would like to remind you that we will be discussing full looking information in the call. And that's how actual clouds may vary from those expressed for implied during this.

Before we start I would like to remind you that we will be discussing forward looking information in the call and that actual results may vary from doses right implied during this call.

Speaker 3: We meet on the call today at Palo Roca, our chairman, CEO , Alito Mondelo, our chief financial officer. We join the Vogue Vice Chairman and member of the Board of Directors, Hermann Kura, the chairman and member of the Board of Directors, Gabriel Puchkuska, President of the Eastern Industry Operations and Lucas Gionetti, president of our U.S. superiors.

With me on the call today are Paolo Rocca, our chairman keel lithium envelope of Chief Financial Officer, Jennifer Poland, Vice Chairman and member of our board.

That's true.

All of our board of directors.

But perhaps a different bar for Mcf.

Operations in Nicaragua.

President of our U S operations.

Speaker 3: Before passing over the court to Paulo for his opening remarks, I would like to make you comment our Court of Labor gloves.

Before passing over the course to Paolo for his opening remarks, I would like to briefly comment. Unfortunately, that's all.

Speaker 3: In the fourth quarter of 2021, phase, which 2.1 billion, up to 2% compared with those of the corresponding quarter of the PVCF, and 17% sequentially, many degraded by the ongoing recovery in real-necidity and practice in North America, where OCTG entry levels of distributors at 4.1% were no normal levels.

During the fourth quarter of 2021 face reached $2 1 million.

82% compared with northern the corresponding pull apart of the PUC that.

And 17% sequentially, mainly driven by down going into the call today, even as activity and pricing.

Well, we'll see continued inventory levels at distributors.

No normal levels.

Speaker 3: Our area of the court was up 27% sequentially to 423 million reflecting high volumes, better pricing and a good investment.

Our EBITDA for the <unk>.

But it was up 27% sequentially to 400, and if you can meet them.

The other volumes that.

The pricing and a good industrial performance.

Speaker 3: Our ABD emerging rose about 23% as better violence and higher average selling prices argument for philosophy proposes eleven of

EBITDA margin rose about 23%, that's involvement and higher average selling prices more than a slight decrease in the cost of cheese.

Speaker 3: Other selling prices in a few developing segments increased 20% compared to the corresponding only quarter of 2020 and 11%

Average selling prices Neptunes operating segment increased 20% compared to the corresponding quarter of 2020 and 11% sequentially.

Speaker 3: During the quarter, cash for commoteration was 46 million, as net cash position at the end of the quarter declined to 700 million, following the payment of an interim dividend of 100 to 53 million in November last year, and capital expenditure of 69 million during the quarter.

During the quarter cash flow from operations was $46 million.

Net cash position at the end of the quarter declined to 700 million following the payment of an interim dividend of $153 million.

Yeah.

Capital expenditure of $69 million during the quarter.

Speaker 3: The board of directors have decided to propose the approval of the annual Janus Rodus meeting to be held at the beginning of May, the payment of an annual division of 41 cents per share or 82 cents per ABR, which includes the inter-individuals of 13 cents per share of 26 cents per ABR, that we paid at the end of November last.

The board of Directors has decided to propose for the approval of the annual general shareholders' meeting to be added at the beginning of May.

The payment.

At <unk> 41 per share or two cents per ADR.

Which includes the UK dividend of 13 cents per share or six cents per ADR.

We paid at the end of November last year.

Speaker 3: If a group, a group of 28 transfer share of 56 cents per ABR will be paid on May 20th.

If approved a dividend of 28 cents per share.

86 cents per ADR will be paid on May 23.

Speaker 3: Now I will add power to say a few words before we open the code.

Now I will ask Paolo to say a few words before we open the call to questions.

Speaker 6: Thank you Giovanni and good morning to all of you.

Thank you Giovanni and good morning to all of you.

In the fourth quarter, we closed.

2021, now with the sequential increase in sales and margin.

Further reinforcing the recovery in our results that.

And we have seen through the year, taking the year as a whole our sales rose, 7% theater near right, our EBITDA more than doubled with the margins that are passing as pre pandemic level.

Speaker 6: Our net income was additionally boosted by our participation in the results of our investment in turnover and use.

Our net income was additionally, boosted by our participation in the results of our investments in talent and those maintenance.

Speaker 6: which benefited from breakout steel price. As a result of these annual results that are our solid financial position, we've a positive net cash balance of 700 million. We are proposing to restore our dividend revenue payment for the 2021 fiscal year to the pre-predemic level.

Which benefited from record steel price.

As a result of these tangible results as our solid financial position with a positive net cash balance of $700 million, we're proposing to restore our dividend payment and the payment for the 2021 fiscal year two they prevent David Clair.

This achievement would not have been possible without the structural measures. We took in 2020 to improve our profitability over the longer term as well as the strategic positioning we have built up over the past two years in North America, and the rest of the world through major investments acquisition and <unk>.

Implementation of our rig direct service model.

Nor would it be possible without extraordinary resilience and determination of our employees, who bore the brunt of the impact of pandemic in their working environment and their families over the last two years, while adjusting to rapid change in the desert production supply chain and customer to.

Speaker 6: to bore the brand on the impact of pandemic in their working environment and on their families for the last two years. While adjusting to rapid change in the data production, supply chain and customer requests, financial litres, full of leotic and?a, of Frau Le tratt add calls to Latins per val Wasserdale Weather

Speaker 6: It is attributed to their professionalism that we have maintained the high standard of our safety performance over the past year. We have lost time, accident frequency rate of one per million men our worked. Even when adding 4,000 shops for representing 33% of them.

Climate.

This is attributed to their professionalism that we have maintained the high standard of our safety performance over the past year. We have lost time accidents for equity raised one per million man hour worked even when adding 4000 shop floor simple representing 33% of the total.

Speaker 6: The United States and more generally in North America has been at the center of our recovery of the past year. Not only has the U.S. been at the forefront of the recovery demand for our product, it has been the hereto-fower industrial rep.

The United States and more generally North America.

And at the center of our recovery over the past year, but only has the U S have been at the forefront of the recovery in demand for our product. It doesn't mean the heritage of our industrial reputation.

Speaker 6: from October 2020 until the end of 2021. We added 1,200 employee in the US and expect where the father 1000 during 2022.

So to tell.

Around 20 until the end of 2021, we added 1200 employees in the U S and expect to add a further 1000 during 2022.

Speaker 6: Production in our Bay City Mill has reached full capacity. And we have reopened many of the facilities we had to close by the pandemic truck, including the residents required of the COPPA's T-Shop, where we expanded the production range to supply it to Bay City as well as the average mill.

Production at our Bay City Mill has reached full capacity and we have reopened manner with the facility we had to close but the pandemic struck including the recently acquired Corpus diesel where we expanded the production range to supply into the ACD is as well as the hamburgers you mean.

Now.

Speaker 6: With hot-soul, coil prices falling from breaker variables, we are also reactivating our welded pipe facilities to complement our supply of seamless piping specific products where welded pipes are suitable.

With hot roll coil prices falling from break or Wearables.

We are also reactivating that where the welded pipe facilities to complement our supply of seamless piping specific product, we're welded pipe are suitable.

Speaker 6: U.S. has popped up market OCD crisis as represented by the five logic index. Have we should their highest level since 2008?

U S export market prices as represented by the pipe logic index have reached their highest level since two.

2008.

Speaker 6: after rising 124% since October , 2012.

After rising 124% since October 2010.

Speaker 6: as distributed inventory level as well from 10 months of consumption to 4 months.

Distributor inventory levels as well from 10 months of consumption to four months of consumption.

Speaker 6: During this video, we have tracked our RIG Direct Service model by introducing digital integration service and reducing working capital requests.

During this period, we have strengthen our rig direct service model by introducing digital integration services, reducing working capital requirements.

Speaker 6: They 80% of our U.S. rig direct customer are using our rig direct portal to integrate to other management processes. And our PID Tracer application is being used to make digital tallies. Our sales in North America now represent close to 60% of our total.

80% of U S rig direct customers that are using our rig direct portal to integrate order management processes and our creative application is venues to make digital talent.

Our sales in North America, now represent close to 60% of our total sales.

Speaker 6: There, we're making a major investment to integrate our seamless and well-dipped pipe production in source summary and expand the range of product we can produce them.

So, we're making a major investment to integrate our seamless and welded pipe production is for summary, and expand the range of products, we can produce domestically.

Speaker 6: The trade case raised by our well-defined competitors against our import from Mexico has been dismissed. After the final determination

<unk> raised by our world five competitors against our imports from Mexico has been dismissed.

After the final determination of know Julien.

Speaker 6: The offshore market is also recovering, so at a different pace. And that recovery is mainly taking place in Latin America, the feeling of Vietnam and Mexico. In Brazil, we are complementing our traditional supply of large diameter welded casing to Petrobras. We've seamless medium diameter casing, completed with Doppler's connection and the direct services, as well as seamless riders.

Yes sure market is also recovering.

The different base and that recovery is mainly taking place in Latin America. The feeling we are in FX in Brazil, we are complementing our traditional supply of large diameter welded casing to paper over the asset we have seamless medium diameter casing completed with hopeless connection and <unk> services as well as <unk>.

This arises.

Yes.

Speaker 6: We were recently awarded a 10-year contract to supply the casing requirements, including large diameter connectors, dopless connection and five male event service for the largest development in the region.

We were recently awarded a 10 year contract to supply the casing requirements, including large diameter connectors.

Cliffs connection and five management service for the largest development in the region.

Speaker 6: Onshore market in Argentina and Colombia is also recovered from the pandemic load. This week in Argentina, the government has issued the decree of the rising project to build a major new gas pipeline from Neuquen in Vácamorita to Buenos Aires.

Onshore market in Argentina, and Colombia is also recover from the pandemic globally.

This week in Argentina. The government has issued a decree authorizing a project to build a major new gas pipeline from new Ken a couple of things to bring those ideas.

Speaker 6: This should enable a further expansion of the railing activity in the Vaca Moerta share formation and reduce the need for future LNG.

This would enable the further spectrum expansion of drilling activity in the Vaca <unk> shale formation.

Use the need for future LNG import.

Speaker 6: The Middle East, the recovery is an area that fails. And our fails during the year were affected by destocking of excess imps.

The middle East.

Is that an area that has faced and our sales during the year were affected by destocking of excess inventories.

Speaker 6: We have won important long-term tenders for supply to major customers in the United Arab Emirates where we have introduced our RIG Direct Service in Qatar where we are providing a full range of OCTGN linepads and in Kuwait.

We have one important long term tenders for supply to a major customer in the United Arab Emirates, We have introduced our rig direct service and get that where we are providing a full range of OLED Gen line pipe any Kuwait.

Speaker 6: We expect a significant recovery in our region from the second quarter of 2000.

We expect a significant recovery.

From the second quarter of 2022.

Speaker 6: In other markets, our sales to industrial markets has also recovered. Of our particular note is the expansion of our sales of Cuba components for airbags, where we are currently completing an expansion of a component's availability in China.

In another market our sales to industrial market is also recover.

A particular note is the expansion of our sales of tubular components for airbags, where we are currently completing an expansion of our component availability in China.

Speaker 6: Out of even our main customer in this segment, recently awarded us with their 2021 pet supplier award.

I will tell you that our main customer in this segment recently awarded US with their 2021 Best supplier Award.

Speaker 6: Over the course of the year, we have confronted significant role material and logistic cost increases. And more recently, we have seen an unprecedented surge in energy cost, which is affecting our European...

Over the course of the year, we are confronted significant raw material and logistic cost increases and more recently, we have seen an unprecedented surge in energy cost, which is affecting our European operation.

Speaker 6: In large part of these increases are already embedded in our fourth quarter.

As part of these increases are already embedded in our fourth quarter results.

Speaker 6: We are advancing on the road map we set out to reduce the carbon emission intensity of our operation and achieved the 2030 target we set for our

We are advancing on the roadmap and we set out to reduce the carbon emission intensity of our operations and achieved 2030 target we set for ourselves.

Speaker 6: Yesterday, our board approved a 190 million investment project to build a wind farm in Argentina which will supply close to 50% of the electrical energy requirement of our Ciderca integrated seamless pipe.

Yesterday, our board approved and $190 million investment project to build a wind farm in Argentina, which will supply close to 50% of the electrical energy requirement of our Siderca integrated seamless pipe facility.

Speaker 6: This is an important initiative. In a country where there are limited incentive pro-projects.

This is an important initiative in a country, where there are limited incentive per project of this nature.

Speaker 6: We have developed and tested specific material chemistry for using hydrogen application, and it will use a new brand, Sarah.

We have developed and tested specific materials chemistry, producing hydrogen applications and introduced a new brand Sarah.

Speaker 6: Das ho. An sub novamente could start in a couple of minutes after our storage for hydrogen The fuel in station is growing. As our says for otherallow Carbone energy. Um.

Sales of data storage vessels for hydrogen refueling station at growing strongly.

Our sales for other low carbon energy applications. This product theater present, however, only a minor proportion of our overall sales.

Speaker 6: This product, the represent however, only a minor pro-project proportion of our overalls.

Speaker 6: Over the past year, the United States had recovered strongly, from the effort of the pandemic.

Over the past year dynamics has recovered strongly from the impact of the pandemic.

On the energy market, while strengthening our global leadership and supporting our customer in a challenging and fast moving environment.

Speaker 6: Why strengthening our global diviorship and supporting our customer in a challenging and fast-moving?

Speaker 6: Thank you and we are prepared to receive you.

Thank you.

We are prepared to receive it.

Dress is affected.

Yes.

Speaker 1: As a reminder to ask a question, you will need to correct star one on your telephone. So withdraw your question from the pound key. Please stand by when we compile the Q&A roster.

As a reminder to ask a question you wanted to Grad Star one on your telephone.

Withdraw your question press the pound key please standby, while we compile the Q&A roster.

Speaker 1: Our first question comes from the line of Ian McPherson from Piper Sandler. Your line is now open. Hello. Thank you for.

Our first question comes from the line of Ian Macpherson from Piper Sandler Your line is now open.

Hello, Thank you for taking my question.

Speaker 4: You mentioned in the earnings release that you expected continuing expansion of your EBITDA margin through the first half, and I know that the international, some of your international markets are expected to accelerate from Q2 forward, but I wanted to ask for a little more detail with regard to where margins can go. And I think also from the fire call we were looking for a minimum or approximate 15% revenue growth from Q4 and Q1, I wanted to get a refresh on that out. Thanks.

You mentioned in the earnings release that you expect to continuing expansion of your EBITDA margin through the first half and I know that the international some of your international markets are expected to accelerate from Q2 forward, but I wanted to ask for a little more detail with regard to where margins can go and I think also from the prior call we were.

Looking for a minimum or approximate 15% revenue growth from Q4 into Q1 I wanted to get a refresh on that out thanks.

Speaker 6: Thank you and first on the again over zugdett

Thank you.

<unk>.

First on the overall revenue.

Speaker 6: You are correct. We continue to estimate our revenue increase for the first quarter in the range of the mid-teens. And also we estimate that our margin for the first queue will be slightly higher than the margin we had in the fourth queue.

You are correct, we continue to estimate our revenue increase for the first quarter in that domain.

<unk>.

And also we estimate that.

Our margin for the first few will be slightly.

Hi, Ben.

The margin we had in days for Q.

Speaker 6: very good. And the company is continuing to grow.

Very good item into the company is continuing to grow.

Speaker 4: I was intrigued, Paula, by the comment regarding the development of wind power to support your Argentine operations. Is that a big, kick-kit cat-back item? Can you talk about the expenditure as well as the time frame? And maybe just a general comment on cat-backs for the company this year as well.

I was intrigued powered by the comment regarding the development of wind power just to support your Argentine operations is that a big ticket Capex item can you talk about the expenditure as well as the timeframe.

Maybe just a general comment on Capex for the company this year as well.

Speaker 6: Well, if I understand your question, you're referring to our investment in the wind farm in Argentina. We lounge in investment now. The overall investment will be in the range of 109 million. We expect to put to put the wind farm into a variation by August 2012.

Well if I understand your question.

You are referring to our investment in the wind farm in Argentina, We Lounged, yes investment now deal that our investment will be the range of $109 million.

Expect it to do to put the wind farm into operation by full boost.

2023, so the investment will be basically distributed along the stack.

Speaker 6: So the investment will be basically distributed along the East End. The investment will raise our expected investment for 2022, because...

These investments.

Weighted to raise that.

Our expected investment for 2022.

Speaker 6: We will end it up and we have a mind with this investment to be in the range of from $400 and $60 million for the year, including.

We ended up and we have in mind that with this investment.

To be in the range of four rather than $50 million for the year, including.

These investments.

Perfect. Thank you Paolo.

Speaker 1: Thank you. Our next question comes from the line of Vez Bajnav from Coker Palmer. Your line is now open.

Thank you. Our next question comes from the line of Ben rationale from Coker <unk> Palmer. Your line is now open.

Hey, Thank you for taking my questions.

Impressive quarter, so kudos to that.

Speaker 5: Maybe I think like people are or investors are a little bit worried about are we reaching peak margins over here And I know you got you guys talked about margins improving in one queue and probably again in two queue Maybe if you can

Maybe I think the people are.

Our investors.

Worried about are we reaching peak margins over here and I know you guys talked about margins improving in <unk> and probably again QQ.

Maybe if you can help us think about.

We would kind of be around $600 a ton of EBITDA.

Back in 2013 2014.

Closer to $150 a ton.

Speaker 5: even what the prices are doing for commodities. Is there a pathway of reaching from the 600 to the...

Given what the prices are doing for commodities is there a path to me off.

Reaching from the 600 to maybe say when anytime in any 50 ton that.

And that we saw earlier.

Speaker 6: Thank you, Vibs. Well, as you are saying, we are debating light, higher, a bit emerging.

Thank you.

Well.

As you are saying we are anticipating.

Slightly higher EBITDA margin.

In the coming quarter.

Speaker 6: And our ABDAP autonomous also increased. I won't give a precise number, but for sure it will increase. You know, in our sales, they will be some projects and some areas in which we have still some price that are not reflecting today environment and that affected by the increasing cost of energy. And on the other side, we have increasing my in price.

And our EBITDA per ton was also increase I won't give a precise number.

But for sure it will increase.

Our data say there will be some project in some area in which we have.

<unk>.

Some price that are not reflecting today and valued Amanda and that affected by the increasing cost of energy in some case.

Other side, we have increase in prices.

Speaker 6: in other regions. So overall combined we expect an increase in a bit that we've done without giving a precise figure.

In Egypt. So overall combined we expect an increase in EBITDA, but without giving a precise figure.

Got it got it.

Completely fair.

Speaker 5: So maybe if you can talk about the well-lit pipe supply demand situation in the US, you talk about

Maybe if you can talk about the value.

Welded pipe supply demand situation in the U S. You talked about you are increasing.

Yield capacity for the welded pipe and maybe if you can talk about.

Speaker 5: 5 maybe if you can talk about how this that supply demand dynamics looks today and then also going forward if the HRC scrap prices are falling how does that impact?

How does that supply demand dynamics it looks today and then also going forward.

At <unk> scrap prices are funding how does that impact your margins and what is the lag.

Speaker 8: Well, on the first question, we are ramping up our weather type production because the price of the hot roll call calls went down abruptly, pretty abruptly in the last month.

Well.

The first question.

We are ramping up.

Well the type of action because.

The price of hot rolled coils went down there.

Lastly, pretty velocity.

Demand.

Speaker 6: I personally think that some seeded the old for the pressure of course.

I personally think that.

So on <unk>, so the pressure of Costa.

Speaker 6: We are close to leveling up for the hot alcohol coins. And there are signs in the national market that are showing even some rebound in prices of left and price of hot alcohol coins outside the United States. So I mean, we are close to...

We are close to level a level enough for the health of our core is.

And there are signings in Asian markets that are showing.

And Sam rebound in prices labs and rates are closed to replace outside Tonight to see so I know we are close to two.

Speaker 6: of some leveling of these. In this environment, I think there is some scope for welder production.

So some leveling of these.

In this environment I think there is some scope for wells to production in the states.

Speaker 6: within limits because the nature of drilling today, the extensive use of seamless and he treated the demanding product in the production casing for the column is leaving a space to go and that which is probably not as extensive as it was historically in the past. so

Within limits because.

The nature of drilling today.

The extensive use of seamless in Q3, the demand in product into production.

Casing for the call alumina is.

Leaving as phase II, which.

Which is probably not as extensive.

As it was historically in the past so that is all that.

Speaker 6: We are ramping up for the specific product in which we feel that well that could complement our products offering. And we expect that also other producers may raise production of well-fed pie.

We are.

Ramping up for that.

Specific products the NIH.

We see that well that could complement.

Product offering.

And we expect that to also other producer may.

Raised production.

Well the die.

Speaker 16: Over to start the facility, hiring people and so. Probably they will, this will be a slow process. I mean, it sounds like overall if I just, you talked about mid-dense growth and maybe more to the higher barge in sequentially. So that gets you like 550 about 15%.

But.

Although it does I mean to start up the facility hiring people until.

Probably they will this will be a slow process.

I mean, it sounds like.

Overall, if I just.

<unk> talked about mid teens growth, then maybe modestly higher margin sequentially. So that gets you like 550 about 15% higher versus street and it seems like the EBITDA you talked about EBITDA per ton is still improving.

So it seems like the EBITDA from Lincoln you should continue to modestly improve.

That's my last question and I was reading about.

Anything that correctly.

The.

Speaker 6: Sorry, but I didn't catch exactly what you were pointing. Sorry, what? Sorry, what? From this question. All I'm saying is based on your guidance for the one Q, Ibedar could shake out somewhere around 550 million for the first quarter.

Sorry, but I didn't catch it.

Exactly what you would have bought anyway some.

This is Greg.

What I'm, saying is based on your guidance for the one <unk> EBITDA could shake out somewhere around 550.

For the first quarter and it seems like based on what visibility you have there.

Speaker 5: have the EBITDA, I'm not trying to get you to a number. I'm just trying to say it directionally, the EBITDA should improve from...

EBITDA Im not trying to get you to a number I'm just trying to see directionally that EBITDA should improve from Q as we go through 2022.

Speaker 6: Yes, basically, if you listen to my anticipation of the revenue line and on the margin, you may have an idea of where we're heading.

Yes basically.

And to my anticipation of the revenue line and imagine a you may have an idea of where we are heading now.

Okay. That's very helpful. Thank you for taking my questions.

Speaker 1: Thank you. Our next question comes from the line of Connor, Laney from Morgan Stanley . Your line is now open. Yes, thank you.

Thank you. Our next question comes from the line of Conor <unk> from Morgan Stanley . Your line is now open.

Yes. Thanks, I wanted to follow up on something you were saying in response to one of <unk> questions, which I thought was interesting. It seemed to be you were saying that you think there's actually a certain stickiness to the market share gains that seamless pipe. It's had in the U S. Historically the U S has been.

Speaker 7: questions which I thought was interesting. But it seemed to be you were saying that you think there's actually sort of a stickiness to the market share name that Seamless Pipe has had in the US. Historically, the US has been sort of mixed between welded and seamless. I'm curious, you know, is that specific customer comments that are leading you to believe that? Or is that just sort of a high level view of where production is going to be? What's driving that?

Sort of mixed between welded and seamless I'm curious.

Is that is that specific customer comments that that are leading you to believe that or is that just sort of a high level view of where production is going to be.

What's driving that thought.

Speaker 8: Well, I think I can turn to Luca for commenting on the relative position of Siemens and well the double time and what we see looking ahead.

Well.

I think I can turn to Luca for.

The cementing.

The relative position of seamless and welded overtime.

What we see.

Looking ahead, okay. Thank you. Thank you.

Speaker 20: Power of harmonic honor. Look, here what we have seen over time is that as the latter outside grow and the productivity of the rigs increase. Customers at least our customer base is more.

Morning Connor.

Yes.

Yes, we have seen over time is that.

Laughter.

Joe and the productivity of the rigs in Giddings.

Cash flow matter at least our customer base that is.

More.

Speaker 6: to take keen in using seamless for some application. I'm referring particularly at the production casing. Now, if you consider the production casing within the lower 48...

Keen in using <unk>.

Seamless.

Some obligation obligation.

Referring particularly.

The production casing now if you consider the production casing within that.

The lower <unk>.

48.

Speaker 6: is a large portion of the market. We would say that in this production casing, we would say that 80 to 85% of the market is seamless, we'll show you next time. And so this represent a major advancement which in our understanding is linked to the application.

Scope is a large portion of the market that we would say that in these production casing.

We will say that that 80% to 85% of the market is seamless which doesn't make sense and so these represent.

A major advancement that which in our understanding is linked to the application.

Speaker 6: And this is basically where we found our statement that the seamless has gained a position that is more sustainable in the long term. A composite screen

And this is basically where we found our statement that as seamless as gain a position that is more sustainable in the long term.

That's interesting.

So I guess.

Speaker 7: The question is sort of related, but basically, if you look at supply today, certainly there's been a lot of news that pipe is very tight within the US, and certainly seamless pipe is mostly what this is referring to. Do you see potential for significant increases in imports to alleviate the pressure there, or do you think that domestic wealth of mills are going to have to fill the gap?

The question is.

Related.

But basically if you look at supply today, certainly theres been a lot of news that the pipe is very tight within the U S and certainly seamless pipe is mostly what this is referring to do do you see potential for significant increases in imports to alleviate the pressure there or do you think that domestic welded mills.

Going to have to fill the gap.

Speaker 16: Well, you are right that the market is being tight. If you consider that the type logic increased by around 100% and 20% in money. So this is also a reflection of this. On top of this, the level of inventory went down substantially. Today we have around four months of inventory on the ground. So the condition.

Okay.

Yeah.

You are right that the market has been tight if you consider that the pipe logic increase by around 120% in linear so.

This is also a reflection of these.

This is the level of inventory went down substantially and today, we have <unk>.

Four months of inventory on dig it out so the condition.

Speaker 9: that where basically putting pressure on the market one year ago, now are kind of disappearing.

We're.

Basically putting pressure on the market one year ago now are kind of disappearing.

Hey, Bob.

Speaker 16: Inventory and also the very high price of the ultra-coil during 2021 that was discouraging weather now

Inventory and also the very high price over the outflow.

During 2021 discouraging with it.

Now.

Speaker 8: I think it's important that I...

I think on import.

<unk>.

Speaker 16: to create a measure of containment and the negotiation of a grimace.

And our manager of containment and.

The negotiation of agreement.

Speaker 16: The view of Japan, the limitation that I've been established over time, like the Tutritu, I read some extent, slowing down or in my view.

With fewer Japan limitation.

I have been established over time and to try to to some extent.

Slowing down or you may view.

Speaker 16: preventing an increase of import at the very fast pace. But look maybe you can either on your view on import.

Preventing an increase of imported into very fast pace that Luca maybe you can add there on your view on input.

Speaker 21: Yes, thank you very much. No, I believe that you fairly summarized the situation. When you look at the imports, even if you see...

Thank you very much.

I believe that you will fairly summarize.

Situation when you look at the imports even if you see at <unk>.

Speaker 6: at the recent developments over the last year, so we don't see import jumping up very, very fast. And when you do some math, you see, you realize that, actually, there are not many places that can increase when you take into consideration all the different trade restrictions that we have in place.

Recent developments over the last DSO, we don't see.

Important jumping up.

Very very fast and when you do some math.

You'll realize that.

There are not many places that can increase when you take into consideration all the different legislation.

Yes.

We have in place.

Speaker 6: At least this is a spared we can see in the minimum terms. Then long-distance drama is always very difficult to anticipate.

At least this is that as far as.

We can see in the medium term longer term is always very difficult to.

To anticipate.

Speaker 16: Alright, appreciate something. I think the current is a response of this. You know, they are increasing our ramp up in our facility is contributing to satisfying no increase in demand. And they will be some increase from the weather type also over time.

Alright, I appreciate it I think.

It is also a data set.

And then data increasing our.

The ramp up in our facility is contributing to satisfying the increasing demand and there would be some increase it from the way the cycle so over time so.

Yes understood. Thank you.

Speaker 1: Thank you. Our next question comes from the line of Nick Constantin. Tank is from D&T Parabas. Your line is now open.

Thank you. Our next question comes from the line of Nick Jenkins from BNP Paribas. Your line is now open.

Speaker 11: Hi guys and thank you for taking my questions. Three from me.

Hi, guys and thank you for taking my questions. Two if I may. Please I just wanted to ask a clarification around the antidumping case, you say it was dismissed or was it just that for Mexico, what about the other regions and when are we any any more color around that would be helpful. Secondly, even with.

Speaker 11: I wanted to ask a clarification around the anti-dumpic case. You say it was this, Mr. was interested for Mexico, what about the other regions and where are we? Any more color around that would be helpful.

Speaker 11: Secondly, even with some working capital absorption to be expected, 2020 just have pretty solid cash regeneration and posted free cash.

Working capital absorption due we expect 222 hubs pretty shortly contribute generation posted free cash.

Speaker 11: Can you just remind us your priorities around capital location and in particular how do you feel about M&A at this point in the cycle and this cycle in particular?

Just remind us your priorities around capital allocation and in particular, how do you feel about M&A at this point in the cycle and recycled in particular, thank you.

Speaker 16: Thank you. Firstly, Clarifique, I mean the point on the decision by the Canadian Authority to dismiss the case against import from Mexico to Canada based on finding of knowing.

Thank you firstly a clarification.

Right on on the <unk>.

The decision by the Canadian authorities to these meet the keys gave input.

Mexico to Canada based on that.

The timing of knowing Judy.

Speaker 16: This is a good result, it's showing that this moment has been no injury caused by Mexican important into Canada.

This is a good result, showing that.

These moment there has been no injury caused by Mexican.

Input into Canada.

This is the final determination I think it's important to be store so.

Speaker 16: I think it's important to be so.

To some extent, creating a precedent for the decision on that day in jewelry in the antidumping case in the United States.

Speaker 16: Some extent creating a precedent for the decision on the injury in the Altynampin case in the United States. It is difficult to prove injury today in a moment in which the pipe industry in the states.

But if you go to prove injury today in a moment in which the tight industry in the states.

Speaker 16: is having record results. Did you know what argument in Canada, and I think it will be a good argument in the case of U.S.?

Is having a record result.

What the argument in Canada, and I think he is also will be a good argument.

In the case of U S.

Speaker 16: As far as the location of capital working capital, you know, the growth in the market is stronger, the growth in our sales is stronger, and we are support.

It's Friday.

Traditional capital working capital.

Yeah.

Yeah.

The growth in the market.

Stronger.

The growth in our state is stronger and we are supporting.

Speaker 16: This increase, we have an increase in our working capital. The day that we have overall in our working capital I've been in the range of 1665 days looking back now. This is, being due also to our model, we are our rigged direct arriving straight to the client. When the demand increase, we are increasing our working capital and increasing our working capital.

Do you think there is at least.

Crazy in our working capital days.

We have over at all in our working capital in the range of what embedded in.

60, 65 days looking back now.

This is <unk>.

So to our moral Delta, we are or big data are driving straight to the client when the demand increase that we are increasing our working capital as a good evening.

Great.

Speaker 16: But on the long run, we expect to be able to reduce these days overall to a range of what other than 30 or something in this range. So we think that over time...

But on.

On the long run we expect to be able to reduce these days so at all.

Adding in the age of 30 or something in this range. So we think that over time.

Speaker 16: The allocation of capital to working capital when the market is established, and we will limit growth.

The allocation of capital to working capital.

Yes.

Okay.

The market.

Stabilize and we will lean into growth.

Or so.

Speaker 16: We have a mission target in the digitalization of our supply chain to reduce the lead time in the mail and to reduce the lead time in our chain.

We have.

Mitchell Scott.

Digitalization of our supply chain to reduce the lead time and the mainland reviews. Indeed.

Speaker 16: You have also taken to consideration in capital location to work in Carthal. Looking at the disruption in the supply chain, in freight, in production of our input, we have been conservative in having some level of high inventory in areas in which we were more exposed to delay by our supply or to disruption in the supply chain. The development in which we prefer to be...

You have also to take into consideration and capital allocation, where he got it done.

Looking at the disruption in the supply chain in freight in production.

Tom.

Sure.

We have been conservative in that having some level of high inventory in areas in which we were more exposed that can be laid by our supplier for these.

Disruption in the supply chain is evolving thing, which we prefer to be on.

Speaker 16: on the safe side in our facing market. That is good. On the last point,

On the safety side in our cities and facing a market that has growth.

On the last point.

On M&A.

Speaker 16: As always, we are looking at our strategic position of worldwide, the position in every region and in every segment that could contribute to the strengthening of our long-term positioning in face of all the difficult circumstances that we may face in the different parts of the world.

As always that we add.

Looking at our strategic position worldwide position in every region.

Every segment.

Could contribute to the strengthening of our long term.

Positioning in face of all.

The difficult circumstance.

We may facing into different parts of the world. So we would keep.

Speaker 16: open this as an option to strengthen our strategic position in the different braking.

<unk>.

As an option.

To strengthen our strategic position in the different regions.

Thank you.

Speaker 1: Thank you, our next question comes from the line of Allen Spence from Jeffries. Your line is now open. Thank you. I had a question about the wind farm, but slightly different in terms of its huge.

Thank you. Our next question comes from the line of Alan Spence from Jefferies. Your line is now open.

Thank you.

About the wind farms are slightly different in terms of its production.

If I'm thinking about this the right way the reduction works out to about 0.05.

To put a ton of steel on your global operations basis, which would mean that by the end of 'twenty four you've achieved roughly two thirds of your 2030 target to reduce the intensity by 30%.

Speaker 12: You mean that by the end of 24, you've achieved roughly two-thirds of your 2030 target to reduce the intensity by 30?

Is that the right way to think about it and then if you could just talk a little bit about what else you'll be doing to achieve the target and I've got another question I'll ask after that.

Speaker 12: a little bit about what else you'll be doing to achieve the target. And I've got another question all out.

Speaker 13: And when I think this is the direction in which we are doing today, we are, we had in 2021 intensive species, a specific intensity of CO2 in scope one, two and three of around one point two tons of CO2 per ton.

Right.

I think this is the direction in which we are doing today we are.

We had in 2021.

It's pretty specific intensity.

While still too in scope, one two and three of around one two tons of steel to put it on hold.

Steve.

Speaker 16: Our target for 2030 is to arrive to 0.90 glass 98. Now, the WIGFARM will support, let's say, some close to 3% reduction of our global intent.

Our target for 2013 to arrive to zero point to 90 plus 98.

Now, Dave the Windfarm Matt.

Will.

Support.

Let's say some close to 3%.

A reduction of file letter.

Global intensity.

Speaker 16: because it will contribute to substantial reduction of CO2 emission in our Argentinean operation, but will impact on the overall teneties will be in the range of 2.5 to 3% of our CO2 intensity.

Cause.

It will contribute.

To a substantial reduction of steel to admission in Argentina in operation, but will impact on the overall dynamics will be in the range of.

Two 5% to 3%.

Okay.

Of our steel too.

MCP desktops.

Speaker 16: We are complementing this with many other steps, but this is pretty relevant one. The other steps has been implemented as being.

We added complemented this with many other steps, but this is pretty relevant.

The other steps being implemented as being that.

Speaker 16: the shift of production of large emitter pipe to a single rolling operation in Symptobir ?

The shift of production for large diameter pipe to a single or already operation and dialing it in.

Speaker 16: another important saving for gas energy and CO2. And likely when we complete, they face out of our Japanese operations that are mainly based on the platforms, we will probably also, we will for sure, do another step. So step by step.

Another important savings for gas energy and tier two.

And.

Likely the when we complete the phase.

Fees out of.

Our Japanese operation that are mainly based on that.

We will grow revenue so we will for sure.

Another state so to get by step.

Speaker 16: with Death Closer to the Star.

Yes.

Get close to that.

Todd.

Speaker 12: That's very helpful. My second question is about working capital. I know it's early in the year, but just with the view of a good demand outlook, any rough estimates of what you think your working capital requirements will be this.

Thank you that's very helpful.

My second question is about working capital and I know, it's early in the year, but just with a view of a good demand outlook.

Any rough estimates of what you think your working capital requirements will be this year.

Speaker 16: As I mentioned, Alan, in the previous question, I mean, our aim is to arrive to a level of 100 and 30 days, and at the end of this year, looking back.

As I mentioned.

The previous question I mean, our aim is to arrive to a level of 130.

Days of at the end of this year looking backwards.

Speaker 16: Today we are in the range of 165. This means

Today, we are in the range of 165.

Thanks.

These means.

Yes.

Speaker 16: In the end or in the first road, the first reactor even after having paid dividend, will affect the positive cash flow for the company. It's a significant positive cash flow for the company, also due to a reduction of capital to working capital over the-

That is the end or in the first.

Broadly the first one even after having paid dividend we expect a positive cash flow for the company significant positive cash flow for the company also due to.

A reduction of capital allocation.

Working capital.

Overtime.

Alright, thank you.

Speaker 1: Thank you. Our next question comes from the line of Frank McGann from Bank of America. Your line is now open.

Thank you. Our next question comes from the line of Frank Mcgann from Bank of America. Your line is now open.

Speaker 4: Okay, great, thank you very much. So you have two questions if I could. Just to follow up on the ESG question or the wind farm question, you're doing it for 50% of the electricity needs at Cedaric and Argentine, I was wondering, is that just the first step? Could you go to 100% double the size of it? I realize there might be other issues in terms of...

Okay, great. Thank you very much.

Two questions if I could just to follow up on the ESG question or the wind farm question.

Youre doing it for 50% of the electricity needs.

Derek in Argentina, I was wondering.

Is that just a first step could you go to a 100% double the size of it.

There might be other issues in terms of.

Speaker 4: transmission capacity or other things that could affect that. But I just wondered what your thoughts are a longer term. Could you do that in other facilities as well, in other locations to improve the carbon footprint that you have? And then...

Transmission capacity or other things that could affect that but I'm. Just wondering what your thoughts are longer term could you do that in other facilities as well in other in other locations two to improve the carbon footprint that you have.

And then.

Speaker 4: Well, I have two other questions. One, just similarly on the hydrogen strategy. I'm just a little, if you could provide a little bit more detailed update on what you're doing there. And then lastly, the Geneva sale, which obviously seems like it was very small, but it's one, it seems at least periodically you're selling off some of these smaller, less core.

Well I have two other questions. One just similarly on the hydrogen strategy I'm just a little if you could provide a little bit more detailed update on what youre doing there and then lastly, the Geneva sale, which obviously it seems like it was very small, but it's wanted it seems at least periodically youre selling off some of these smaller less core.

Speaker 4: I'm wondering what the strategy is there is just to get rid of smaller operations that are not that core or is ESG part of why you're

Product. So I'm wondering what the strategy is there is it just to get rid of smaller operations that are not core or is ESG.

Part of part of why Youre, reducing.

Some of some of those operations.

Speaker 16: Thank you Frank. Now, in the first bullet point on the farm, Argentina has a special condition. When farming in Argentina we have like in B.K. it's a very high efficient.

Thank you Frank is the first point on the farm in Argentina has.

Especially on foundation, a wind farm in Argentina may have.

In this case.

Very high efficiency.

Speaker 16: above 55 percent. So is a special is it extremely

Above 55% or so.

The special eliminated it may vary.

Speaker 16: special situation. Argentina, the wind farmer will be in the southern part of the Buenos Aires province. In the area we have sustained wind over time. It is a particular condition in which we think of.

<unk> situation, Argentina, the wind farm that will be in the southern part of them is one of those items proteins.

It is an area we've sustained wins over time.

Is it.

Particular condition in which we think.

Speaker 16: It makes sense to do first that. I don't think our aim in this moment would be after this to continue in Argentina to invest on the project of this size.

It makes sense.

To the first that I don't think our aim in this moment would be.

After this to continue in Argentina to invest on a.

Projects of this size.

Speaker 16: And in the other region we are analyzing other projects.

And in the other region, we are analyzing.

The other project.

Speaker 16: There may contribute to the reduction of our footprint, but...

That may contribute to the reduction.

Of our footprint.

But.

It is.

Speaker 16: Modified... We need full

More difficult to identify broad as it is.

<unk>.

In Mexico, the lab side.

Yes.

Speaker 16: We are progressing and analyzing different technology from the carbon capture in usage or storage.

We are progressing in analyzing.

Different technology from Caterpillar carbon capture.

And usage or storage yet.

Yeah.

Speaker 16: Energy savings in our operation, we're working on the scope three, reducing our purchase of high carbon input. Everything is compounding our roadmap for reducing this.

<unk> savings.

In our operation.

We're working on this call three reducing our per trees.

Hi, Carter.

Everything is compounding our rural demand.

What are you seeing things.

The.

Speaker 8: These are the first questions. The second question, we are trying to streamline and concentrate on, let's say, the core of our operation. The decadence in Eva, in Eva is very small meal.

Details on the first question on the second question.

We are trying to streamline and concentrate on that.

Let's say the core of our operation and it gives you an Eva and Eva.

There is more.

Speaker 8: focused on a segment that is very different from our driver.

It focused on a segment that is very different.

What are the driver.

Speaker 8: And so we are trying to focus as much as we can.

So we are trying to focus as much as we can.

Speaker 8: in the core business of...

In.

In the core.

And as of Tonight.

Speaker 8: considering also the opportunity they may come from in the end due transition. This would be a different story. We may get into an area of product, they may enhance or use our competitive advantage for advancing in the area of hydrogen or other energy transition related project. Our project for hydrogen, we are completing the one furnace in

Considering also the opportunity that may come from in the energy transition. These would be a different story we may.

And getting through.

The area of product they may enhance or use our competitive advantages for advancing.

In the era of either general.

Other energy transition related.

Roger.

Our projects are either agenda, and we are completing therefore, the one furnace in.

Yeah.

Speaker 8: In Italy, we will be here for all being heated by hydrogen. We have two pilot projects for testing technology off carbon on-carchion. If we can identify technology that could be used in separating CO2.

In Italy.

We are capable of being.

Heated that a hydrogen and we have two pilot project for.

Sure.

Testing the technology of carbon capture.

To see if we can identify technology that could be used.

In.

Separating next year or two.

Speaker 8: And then to understand if we can see U. All

From our foreign assets.

And to understand if we can scale up.

<unk>.

Speaker 8: Hey, Ted, but these are more R&D, so the Tantres limited scale.

Okay.

But these are more R&D.

Limited scale.

Speaker 8: but we only have translet it on over time.

But.

It happens later.

Okay.

Okay, great very interesting thank you.

Speaker 1: Thank you. Our next question comes from the line of Alice Sandra Potsy from media bank. Your line is now open. Thank you for.

Thank you. Our next question comes from the line of Alessandro Pozzi from many of Banca. Your line is now open.

Thank you for taking my questions.

Speaker 2: And the first one is on the EBITDA progression. I am so that margins are expected to marginally grow quarter after quarter. But at the same time, I think we have a pending decision in terms of duties of imports in from from Mexican Argentinian to the US. And once their preliminary duties are imposed, I guess, I'm not sure whether you will be able to continue to import from Argentina, Mexico. Is that going to have an impact on margins or is that reflected already in the guidance you've provided us?

The first one is on the EBITDA progression.

I understood that margins are expected to marginally grow quarter after quarter.

Same time I think we have.

The decision in terms of duties the Vin.

Ports in Oman.

<unk> to the U S and once the preliminary duties imposed I guess I'm not sure whether you will be able to continue to imports from Argentina, and Mexico is that going to have an impact on margins or is that reflected.

Randy in the guidance yields that provided.

Speaker 8: As I tell you, and I did a lot of the points that we touched also in the last conference call, we really think there is a difficulty to enjoy in this and to go against the import from Mexico and Argentina in the present future.

And I would tell you.

One other point that we touch also in the last conference call.

Anything that is.

The difficult too.

In jewelry in days.

And to go against the input from Mexico, and Argentina independently circumstances.

Speaker 8: So we are confident that it's the case in the end will be dismissed. Now, results, the final term issue will come between September or October . It depends from the timing of the final litigation, but I mean, will be coming in the second part of 2022.

So we are confident that is the key.

Casey in the end it would be this means now.

The result.

<unk> will be.

Between September or October .

It depends on the timing of the refinery litigation, but will be coming in the second part of 2022.

Yeah.

Speaker 8: For the time being, we are first of all planning on the scale up of our facility in the United States. The ramp up, as I mentioned, my prepared remark is very substantial. We are in hiring people in all of the eight facilities in the United States. So we are positioning ourselves for, anyway, an increase of production in the United States.

For the time being and we are at.

First of all planning on the scale up of our facility in the United States. The ramp up as I mentioned in my prepared remarks is very substantial we are in the hiring the people that in all of the <unk> facility in the United States. So we are positioning our.

Sales for us.

Any way and increase our production in the United States.

Speaker 13: And it is how we are projecting the, let's say, our position. We are keeping in mind our projection.

Okay.

It is how we add.

Projecting.

Let's say a regulation, we are keeping in mind in our projection.

Speaker 8: The fact that these new facilities are extending to some extent our supply chain and requiring some additional working capital, this is something that you see today in our working capital. Some of this line of production requiring moving pipes from one place from the other moving semi-finished product and this is at the beginning.

The fact that these new facility extending to some extend our supply chain at acquiring some additional working capital. This is something that you see today in our working capital.

Some of these lineup of production required in moving types from one place or the other moving semi finished product and this is it.

At the beginning.

Speaker 8: Let's take front loading our working capital and these are the results of our of this rampart over time

Yes.

Let's say Frontloading, our working capital and these also a result of our of this ramp up all that time.

This as I was saying before we thought about that.

Yes.

Speaker 2: And with regards to the duties, is that already a date set for the preliminary duties on when there will be applied?

And with regards to the duties.

<unk> date set for the preliminary duties on when that will be applied.

Speaker 16: Sorry, I didn't get you would have this. I was wondering if there is a date for the preliminary duties on the imports.

Sorry, I didn't get to a decent.

I was wondering if there is a date for the preliminary duties on the inputs.

Speaker 13: Medium

Already set.

The preliminary.

Speaker 8: this competition will finally be able to make its debut in a May event in 2020 about the bloody 6 years and downsides as theouteva p Training on a

Do this should be around me.

Yes.

The DSA.

Decide their preliminary duty on Mexico and Argentina.

Okay.

Speaker 2: Thank you. My second question is on costs. I believe that you mentioned that quite a lot of costs have already been embedded in the Q4. I was wondering what, I mean, to what extent we will see an increasing cost in Q1.

Okay.

Thank you.

My second question is on cost I believe that you mentioned that quite a lot of cost has already been embedded in the Q4 I was wondering.

What I mean to what extent, we will see an increase in cost in Q1.

Speaker 2: And probably there are some costs that are sticker, like logistical costs, but maybe some other costs linked to energy prices, maybe it could be less so if we see a normalization of gas prices. So maybe it's going to quantify the impact of the higher energy prices on EBITDA, and whether at the moment you are buying gas in Europe or on sports, or you're using long-term control.

It probably does some costs are sticky.

Sure.

<unk> cost, but maybe some other costs linked to LNG prices that maybe could be less so if we see a normalization of <unk>. So maybe if you can quantify the impact of the high energy prices.

On EBITDA and whether at the moment you are buying gas in Europe on spot or using them long term contracts.

Speaker 8: And I mentioned in the opening remarks, last part of the increting cost it embedded in our cost of sales of the fourth quarter. But, I mean, because of the IFAres, there is a part of this additional cost that we are paying today, that we're also getting to our cost of sales of the first and the second queue. So – let's get started. Ok.

As I mentioned in the opening of America last.

A large part of the increasing cost is embedded in our cost of sales of the fourth quarter.

But.

I mean because of the asset.

There is a path of these additional costs that you are paying today that will also get into our cost of sales.

The first and the second Q.

The.

Speaker 8: We are buying energy in Europe , no doubt. As you know, we have power generation unit and we buy gas. In it and we buy power in Romania. We are reacting.

We are buying energy.

Europe No doubt as you know we have a power generation unit, then we buy gas and ethane as we buy power.

Romania.

We are.

Reacting.

Speaker 8: organizing our operation in the way that tries to minimize the impact, but the cost is there, no doubt it.

Organizing our operation in a way that try to minimize the impact about the cost is there no doubt.

And.

Speaker 8: We will have probably to face higher energy costs in Europe for a period of time. It's difficult.

We will have probably to face higher energy costs in Europe for <unk>.

A period of time is difficult to estimate.

Speaker 13: when there could be a normalization of energy equilibrium in a new route, but for the time being.

When that there could be.

This normalization.

And <unk> really below any newer data, but for the time being it.

Speaker 8: Part of this is in our course already.

Part of this is in our costs.

Speaker 2: Okay, you buying spot prices or you have long long term contracts with your suppliers. We have a combination of long term short term, I mean, is a mix of contract and also spot.

You're buying spot prices or you have them.

Term contracts with the suppliers, we have a combination of.

Long term.

Sure.

Is it mix.

Of contracts and also spot.

Alright.

Thank you very much I'll turn it back.

Speaker 1: Thank you. Our next question comes from the line of Kevin Roger from Kepper, Shoezhrou. Your line is now open.

Thank you. Our next question comes from the line of Kevin Roger from Kepler.

Your line is now open.

Speaker 14: Yes, good afternoon. Thanks for taking my question. I have two actually. The first one is rated to the US because you mentioned the type supply on the seamless side. If we just focus on the seamless, I understand that the utilization rate of BACIT is already at 100%. Can you give us a bit of color on how much you can add in terms of supply from Mexico and Argentina currently on the seamless, but your capacity.

Yes. Good afternoon. Thanks for taking my question I have two actually the first one is related to the U S. Because you mentioned the tight supply from the <unk>.

Seamless side, if we just focus on the stimulus.

The.

Utilization rates of BCP is already up 1%.

Can you give us a bit of color on how much you cannot just in terms of supply from Mexico announcing documents.

On the seamless.

In terms of.

Volumes.

Speaker 14: to add to the country. And the second one is related to Middle East and Africa. I was wondering if you can update us on the bidding activity current, how do we stand compared to the pre-pandemic level in terms of volumes? And what do you see currently on the pricing side?

The country and the second one is really to keep the two middle Eastern Africa was running.

On the bidding.

Activity.

How do we spend compared to the pre pandemic level in terms of volumes and what do you see currently.

Pricing side because.

Speaker 14: On the paper the pricing in the middle is shooting away for all the bi-protection decks, but it has not reached the case

On the paper pricing in the Middle East shooting the <unk> index.

In the case of the past.

Speaker 14: months easier if I will understand so what's the situation on the pricing side now?

<unk> went on system, so what's the situation on the pricing side.

Please.

Speaker 16: Thank you, Kevin. Well, the first question about the overall mix of our sales, the share that is coming from Mexico, share that is coming from U.S., we find it 10-way, we want to do, understand that. I think we have a balanced source, but maybe Luca could tell us with the ramp up of operation.

Thank you, okay, well the first question.

The let's say the overall mix of our sales.

Sure that is coming from Mexico share that is coming from U S.

If I understand where they want to understand.

We have a balance.

Sure.

Maybe luca could tell us.

<unk> pop up operation.

Speaker 15: How will this make change? Good morning, Kevin. Now, for competitive liaison, we don't disclose the details. However, I can tell you that once we have fully ramped up our seamless facility, which, as I said before, actually,

How will these may change.

Good morning, Kevin.

Now for competitive reasons, we don't disclose all the details however, I can tell you that once.

We have fully ramp up.

Sure.

Seamless facility.

Which as I said before actually Paolo said before.

Speaker 6: Bay City is almost a full capacity and we are strongly ramping up. Now, Amrige, we're going to be in the position of the sending our position in seamless from the United States.

<unk> is almost at full capacity and we are strongly ramping up on our Amitiza, we are going to be in the position of defending our position and seamless for them.

The United States.

Speaker 6: I don't know if this is helpful or you have other questions on.

I don't know if this is therefore or.

You have other questions on.

Speaker 14: Hi, it's a puberty to adjust. You try to estimate in terms of volumes how much, let's say you can answer on the same left side.

Alright.

But just to try to estimate in terms of.

How much let's say you can answer on the seamless sites in terms of.

Speaker 14: additional demands from the US but also from Mexico and Argentina. What's the maximum demand that you can...

Demand from the U S, but also from Mexico.

What's the maximum that you can.

Ken.

So on those sites.

Speaker 6: Well, what is the same before Kevin? We don't release this number for competitive reason, but what I can tell you is that once

Well as I said before Kevin we'd already Lisa this number for competitive reasons, but what I can tell you is that once the <unk>.

Speaker 6: execution of our ramp up, which is well underway in Bay City and is coming up in Embrager. We want to be able to defend our position on seamless in the United States. And it is something that frankly, we already envisioned before and we are ramping up. We studied our ramp up already back in October 2020.

Execution.

Our ramp up which is well underway in <unk> and it is coming up and Enbridge.

We're going to be able to defend our position on that answer Melissa.

The United States and it is something that frankly, we already envisioned before and we are ramping up.

We started our ramp up of already back in October 2020. So this is part of the process that we already initiated another undertook.

Speaker 6: So this is part of a process that we already initiated and undertook well before the anti-dumping case. Yeah, well, this is something that we started before and this part of our strategy for the...

Well before the Antidumping case, yes.

It is something that we started before and as part of our strategy for the United States.

Speaker 16: In the case of Canada for instance, after the case was launched and the dumping duty was established, we continue to export materials from TAMSA and with the dismissal of the final, this money, the money paid for the duty will be reimbursed.

In the case of Canada for instance, after.

The case was lounge and.

Dumping duty was 70, we continue to export our materials on time and.

And we've the dismissal of the sign.

This money the money paid for their Iot will be reimbursed to us there may be something else of garnering similar occurring in the United States.

Speaker 8: There may be something also occurring, similar occurring in the United States. I mean, depending on the duty...

Depending on the duty.

Speaker 8: We may decide what to do and how to organize our metrics. Of.

<unk>.

We may decide what to do and how to organize our metrics.

Of supply.

Speaker 8: And so I have the second point, this concern. I mentioned in the remarks of the relevance of the offshore in Latin America, but I would like to Gabriel to...

As far as the second client is concerned I mentioned the America the relevance of the offshore in Latin America, but I would like to grab it here too.

Speaker 8: add some salt understanding it's it looks like if people wanted it probably use found today

To comment.

On your point.

On the.

Speaker 8: In the investment in Africa. Yeah. Yeah, yeah, thank you, Paulo. Good morning, King. I think you were asking about...

Investment in R&D.

In Africa.

Yes.

Thank you Paolo.

Good morning, Gary I think you were asking about the.

Speaker 22: activity and some color in the Middle East and some price in the United States as well. In terms of activity, I would tell you that the Drilling in Middle East is showing a consistent recovery.

Activity on some color in the middle East and some pricing dynamics as well so.

In terms of activity I would tell you that.

Middle East is showing a consistent recovery.

Speaker 22: I consider that the core of peccantris are already producing at the similar levels to the end of 2019 but still the recon remains.

Consider that the core OPEC countries already producing.

Similar levels.

Through the end of 2019, but still the rig count remains bill.

Speaker 22: below about 30% below those pre-pandemic levels. So there is a clear room for activity to continue to accelerate during the year now, and really this is gonna...

Below about 30% below those but.

Pandemic levels. So there is a clear room productivity to continue to accelerate during the year and really this is going to.

Speaker 22: Gonna cure as we see our major customers contracting R.

<unk> as we see our major customers contracting rigs.

Speaker 22: So our say is that in the Middle East, we remain subdued in the first quarter, but we expect as Paul anticipated, the relevant jump starting in the second quarter as our large backlog of contracts of the UAE, Kuwait and Qatar kick in.

So I will say in the middle.

We remain subdued in the first quarter.

But we expect as Paolo anticipated relevant jump starting the second quarter.

So our large backlog of contracts.

Kuwait and Qatar kicking.

Speaker 22: How is also active? We have recently secured several contracts across different business segments, confirming that the stronger activity is coming ahead in the kingdom as well. It has been quite active as well. We received a call of their in OCDG and we have awarded the Pipelines as well. So we expect that from second quarter onwards, our revenues in the segment of Middle East and Africa will be running back to pre-pandemic levels.

Zalviso selective we have recently secured several contract growth.

Different business segments.

Improvement stronger activity is coming ahead in the kingdom as well.

That has been quite active as well we received golar very nosy digi.

We have awarded the pipelines as well so we expect that from second quarter onwards, our revenues in the segment of Middle East and Africa will be running back to pre pandemic levels.

Speaker 22: talking to our customers here in the region and reviewing their plants. There is a pretty strong...

Talking to our customers here in the region and reviewing their plants.

It's a pretty strong perception.

Speaker 22: that the outlook is quite positive that we are entering a multi-year growth cycle. So this is to give you some color and perspective on the following quarters on the region. Regarding the price in dynamics, and that comparison that you were making with the US, I think I need to clarify that the price in dynamics in this area is...

The outlook is quite positive that we are entering a multi year.

Growth cycle.

To give you some color and perspective on the on the following quarters on the region regarding the pricing dynamics.

Comparison that you were making with with the U S.

I think I need to clarify that the pricing dynamics in the second week series.

Speaker 22: Especially different from North America. We're facing a different competitive environment, a different business cycle. So there's no very limited link to the pieblogics index.

Essentially different from North America.

Are you seeing a different competitive environment different business cycles.

So there is no or very limited linked to the biologics index.

Speaker 22: Our main business here in the Eastern Enfield is associated with local content positions, high end products.

Our mainly main business here in the second period associated with local content positions high end products.

Speaker 22: and rigged direct services, which allow us to earn differential prices and margin. The dynamic here on our long-term contracts are following formulas. All the contracts with IOCs, the formulas have already been negotiated and already in place, and we're going to start to see that.

And Rick that it services, which allow us to earn the financial prices and margin dynamic here on our long term contracts are following formulas all the formula on the contract with IOC. The formula have already been negotiated and are already in place and we're going to start to see that.

Speaker 22: starting in early 2022. For the NOC, we have formulas as well, but this process will take a bit longer, we will be later in the year, typically there's an inertia, and a longer cycle with the NOC. And within our backlog also, it's important to mention the large pipelines that we have, Turkey and Qatar, because in this case, the prices are fixed, and this average price.

Starting in early 2022, four vlccs, we have four minutes as well.

But this process will take a bit longer to be would be later in the year typically there's an inertia.

Longer cycle with the analysis.

Within our backlog also is important to mention the large pipelines that we have Turkey and Qatar because in this case the prices are fixed.

This average prices are below.

Speaker 22: the average of all CitiG as well. Regarding new offers, either for spot or long-term agreements, our new pricing has been repositioned according to the new input levels. And the market is reacting positively to this reset. We see a positive dynamic and we start to begin with new contracts, new business towards the year end or even into next year.

The average of all CPG as well.

Regarding your first either for support our long term agreements, our new pricing has been very precision.

According to the new input levels.

These are reacting positively to this reset we see a positive dynamic Andy when we start to begin with new new contracts new business.

Towards the year end or even into two next year.

Speaker 17: Thanks for that for all those unfair. Thank you, Gabri.

Okay perfect. Thanks for those photos and.

Thank you Kevin.

Speaker 1: Thank you. Our next question goes in the line of Carson Reak from Credit Suisse. Your line is now open.

Thank you. Our next question comes from the line of question Rick from Credit Suisse. Your line is now open.

Speaker 18: Thank you very much. A few questions left from my side. The first one is on Outlook. In your guidance, you mentioned the significant improvement in volumes from Middle East and Africa. Could you narrow the guidance, especially from Middle East, as we have seen in the past, or rather wide range here of volumes and sales achieved? That's the first.

Thank you very much a few questions left from my side.

The first one is on outlook in your guidance you mentioned a significant improvement in volumes from Middle Eastern Africa could you narrowed the guidance, especially for middle East as we have seen in the past, but rather wide range here of volumes and sales achieved that's the first one.

Speaker 16: Okay, thank you, Gazzan Tegen, Gabriel, I believe you focus a little more in the comments that we made on the outlook. Yeah, very, very follow.

Okay. Thank you guys again Gabriele.

To focus even more in the comment that we made on the outlook.

Yes.

Paolo.

Okay.

Speaker 22: Yes, Paolo. So, Karsten, as I was just commenting a few moments ago, the guidance is for pretty much in range first quarter in the segment of Middle East and Africa compared to the fourth quarter. And a step jump in the second quarter, going back to average is of a pre-pandemic from there. And we believe that it would be a new step for the region going forward. Hopefully that clarify some color. N My tath miss.

Yes.

Paolo So carsten as I was just commenting.

<unk> ago.

The guidance is for.

Much in range first quarter in the segment of Middle East and Africa compared to the fourth quarter on a step jump in the second quarter going back to average over our pre pandemic.

There and we believe that it would be a new.

A new step for the region going forward.

Hopefully that clarifies and I'll give you some some quarter or where you might have missed.

Speaker 18: Perfect, I might have missed that, sorry for that. The second one is more technical question. I still see that the depreciation and the CAPEX levels are wide apart. Do you expect that gap to close? That means higher CAPEX going forward, up with apart from the aforementioned CAPEX spending in ESG.

Perfect I might have missed that sorry for that.

The second one is more technical question I still see that the depreciation on the Capex levels are wide apart do you expect that gap to close that.

That means higher capex going forward.

From the aforementioned.

Capex spending in ESG.

Speaker 16: Thank you for this. I don't think that CapEx's noracondition should go.

Thank you for the SEC.

I don't think that Capex.

Our recommendation should go.

Speaker 8: Let's say much higher because this 190 million for the wind farm is a pretty large investment. In general, we are in the range of 250 million in Periere to support also the ramp up of our operation in the U.S.

Let's see much higher because this is 119 mainly on four.

The wind farm is a pretty large investment.

In general we are in the range of $150 million in <unk>.

To support also the ramp up.

And of our operation in the U S.

Speaker 8: This at November , I think, is a small investment, ...

This.

Let's say.

Specific large investment.

Speaker 10: But I do not see a part on eventually special product or special project that may come from changes in the market. I do not see that we should change this level. This level should be sustained.

But I do not see a path eventually.

Special product, especially the.

Projects that may come from changes in the market.

I do not see that we should change this.

Let's say this level these levels would be sustainable.

Speaker 15: Perfect wonanders and heily V, we come a fending of your two or two

Perfect.

Dan.

We can depending of tier two per kilometer.

Speaker 18: Okay, perfect, perfect. Thank you very much. The other question I have in your statement, you mentioned...

Okay.

Perfect. Thank you very much.

<unk>.

Other question I have.

In your statement you mentioned.

Speaker 18: that the investments in oil and gas are unlikely to return to pre-pandemic levels and hints that would gas the volumes would be even less so given the inflation which we have.

That the investments in oil and gas are unlikely to return to pre pandemic levels and hence I would guess the volumes.

We'd be even less so given the inflation which behalf.

Speaker 18: how do we see the competitive environment going forward because at the other side we see actually new supply or idle supply coming back to the market could we see a more competitive environment and if so would you believe that the tubular players behaving more rational than in last cycles?

How do we see the competitive environment going forward because thats the other side, we see actually new supply.

Idled supply coming back to the market could we see a more competitive environment.

And if so what.

Do you believe that.

On the tubular players behaving more rational than last cycle.

Hey.

Speaker 8: In my view, it is difficult to make a forecast because of the level of uncertainty.

In my view.

It is difficult to make.

Forecast because of.

The level of uncertainty.

Speaker 8: that it may challenge some of the of the existing assumption.

<unk> worldwide that it may challenge some.

All of the.

The existing ascension.

Decline.

Energy in Europe .

Speaker 15: This is a disruption in the energy that could come from the Russian Ukrainian conflict. You know, Russia is supplying 17% of the world gas and 10% of water. There are geopolitical tension and the energy transition also is facing challenges.

Disruption in the energy that could come from the Russian.

Great and conflict.

Russia is supplying 17% of the world's gas and 10% of world oil.

There are geopolitical tension and the energy transition also is facing challenges.

Speaker 16: because of the difference between expectation and what is actually happening and feasible. So I think this may change the way investor looking and company looking at FedM.

Because of that.

The difference between.

Expectation and what is.

<unk> actually happening in physical so so I think this may change.

The way investors looking at the company are looking especially in the oil and gas.

Speaker 13: We don't know yet, but I think the due to 2022.

We don't know yet, but I think that during 2022.

Speaker 8: We may have a sign of some different attitude. Also.

We may have.

A sign of some difficult.

Dividend attitude also.

Speaker 15: We have seen a lot of discipline by the operator in different parts of the world.

We have seen a lot of discipline by the operator and deepen in parts of the world.

Speaker 15: When the pride was 80 dollars, if the pride stabilizes the foil in the range of...

The price was $80.

<unk> are already in the range of.

Speaker 15: 95 one hundred dollar everybody will have to get back and think again and the God issue is also relevant so I think that

95, $101, everybody will have to get back and think again and the gas issue is also relevant.

So I think thats.

And digital to make.

Speaker 16: Solid statement of which would be the level of investment must be the role of inflation in the year to come.

Solid.

Eight months of which would be the level of investment most needed and also inflation.

In that.

And we have to kind of what we see as the short term.

Speaker 16: The long term is difficult to avoid.

But the long term it's difficult to already.

Today.

Speaker 18: Perfect, but that has already. The last question is rather on the associate income, because in 2021 you have seen quite a substantial step up here in associate income from your participation in tandem and using menas in particular.

Perfect, but that has already.

The last question is from.

Rather on the associate income growth in 2021.

You have seen quite a substantial step up here in associate income from your participations in tandem.

In particular.

Speaker 18: What are your assumptions for 2022? Because I'm pretty sure the half a billion is a bit far off given the circumstances that the Brazilian steel industry is currently in. It looks like it's a little lighter. But could you share your assumptions here for that position because it is?

What are your assumptions for 'twenty to 'twenty two.

I'm pretty sure the half a billion.

Far off given the.

Circumstances, the Brazilian steel industry is currently in it looks like it's a little lighter, but could you share your assumptions here for that position because cash relevant of course as well.

Speaker 16: Well, you are right that 2021 has been an extraordinary year. But on the other side, you know, thearium has relied the cycle of investment. That is positioning the company very well.

Well Youre right.

2021 has been an extraordinary year.

Syed.

The piano.

Pam has realized the cycle of investment.

He is positioning.

Company.

Very well.

Especially.

Speaker 16: in front of the Latvia-Große in the American.

In France.

Alpha.

Let's say.

Growth.

In the American market so.

Speaker 13: The result will be not the one, I think it will not be the one in 2021, but it will be a very solid result for 2022.

The results would be.

Another one.

Take care of Adobe, the one and 2021, but it will be a very solid.

<unk> 4000.

Two.

Speaker 18: Okay, perfect. That's fine. Thank you very much.

Okay perfect.

That's fine thank you very much.

Speaker 1: Thank you. Our next question comes to the line of Luigi DiVelli from Ecuador's Thym. Your line is now open.

Thank you. Our next question comes from the line of Luigi directly from equities. Your line is now open.

Speaker 10: Yes, good morning. Two questions for me. The first one on the prize is considering that the amounts of supply in the equation US and the low level of inventories. With expectation, you have about pipelines trying to trend for the next month, also considering the drop of oil. And can you remind us how much of your worldwide contrast are linked to the pipelines?

Yes. Good morning, two questions from me the first one on the sizes.

Neither in the amount of supply in.

The equation in the U S and the low level of inventory.

You added about pipe logics rising trend for the next month or so.

So considering the golf balls.

Our protocol.

And the <unk>.

Thus, our macho brio worldwide contracts are linked to the pipe projects.

Speaker 10: And the second question on the US market, can you update on where do you see US recount by the end of which the current level of oil prices and topics are now spent by the oil companies? Thank you.

The second question on the U S market.

Can you update on where do you see U S rig count by year end with the current level of oil prices and Capex announcement by the oil companies. Thank you.

Sure.

Speaker 16: Thank you, Luigi. Maybe you can look at you can now.

Thank you.

Yes.

Maybe.

Yes.

You can look at.

You kind of comment.

Speaker 15: on the perspectives for the biology that we did today and the recount of where we...

On the perspective for the technology that we see today in the rig count so when we.

Speaker 20: Yes, on the on the pipelines HLC supply demand here, but up to Practice there are playing on the one hand that the strong demand

Yes on the on the pipe logics HFC supply demand yeah. There are two factors there.

On the one hand that the strong demand.

Speaker 20: And in our opinion, the ramp up that the industry will need to put together to face with the demand.

And in our opinion.

The ramp up.

The industry will need to put together a two faced with with.

The demand.

Speaker 21: The inventory level is extremely low. Now in our calculation, we are likely to be role for month. And this is historically low for this market. So there is also a matter of somewhat replenishing this inventory. And this certainly will tend to support the pipelines. Now, if you do that, the HRC going down is a threat, but as Paulo was saying, in most of these much better the next out?, we should be still a…

The inventory level is extremely low now in our calculation, we are likely to be low four months and this is historically low for four of these markets. So there is also a method of somewhat replenishing this inventory and we certainly would tend to support that biologics now it is still a bit uhm.

Wind down is et cetera, but as Paolo was saying.

Sure.

This is much better that makes sales, but we see this.

Speaker 20: downward trend stabilizing. So, but I think this is too far from the long trauma, it is very complicated because there are many factors as players. Now, when we get into our policies, please remember that our policies, the data,

The downward trend.

Stabilizing so.

I think these two facts in the long term is very complicated because there are many factors.

Now when we get into our prices.

Please remember that our prices.

Speaker 21: linked to the biological and the significant way are usually suffering over a three months lead. So when you come to our prices, you want to see our prices increasing even if the biological start trending and trending.

<unk>.

Links to the biologics.

Significant way.

Usually suffering all over a three months lag so when you come to our pricing.

Our prices.

Zynga, even if biologics.

Stock lending.

And the funding of the Dol.

Speaker 6: And this is what is the US market with concern. I'm after a big jump during 2021 now.

And as far as the U S market is concerned.

The big jump during 2021.

Speaker 6: and reading and studying water, EMP operators are using as a budget, we see.

Leading and starting water E&P operators are using as a budget that we see.

Speaker 21: Increase in the activity coming through 2022. Of course, we don't expect to see the same pace, but we still see a solid increase. Now, when we get to what I was saying, you need to consider that probably we're going to have a bumper, a jumper. You do the fact that some of our customers are...

Increase in the activity going through 2022 of course, we don't expect to see the same pace, but we still see a solid.

It's already now when we get to I will say is that.

We need to consider that.

Or are you going to have it.

Jump due to the fact that some of our customers.

Speaker 20: They say consolidating some acquisitions that are not fully within their full scope of operation. And this I'm talking about, the 2022, please the first semester.

<unk>.

Consolidated in some acquisitions that are now fully within that.

The full scope of our very strong and this I'm talking about.

The 2022, please the first semester.

Thank you Luca.

I think this was the last question.

Yes. Thanks.

Speaker 22: Do you want another question?

Yes.

So.

Is there another question.

Anthony.

Are there any other countries.

Speaker 15: Thank you very much, so thank you everybody for attending the conference call and good luck to everybody. Thank you.

Thank you very much so thank you everybody for attending the conference call.

And good luck to everybody. Thank you.

Speaker 1: Thank you. Thank you. Thank you. Thank you. Thank you for participating. You may now disconnect.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.