Tubacex (TUB) Q2 2024 earnings summary

Executive summary

• H1 2024 sales reached €398 million, EBITDA €50.1 million (12.6% margin), impacted by ADNOC project ramp-up and Abu Dhabi plant commissioning, both on schedule for year-end operations.

• Strategic agreement with Mubadala for a 49% stake in the OCTG business will bring $195 million (€180 million) cash inflow in Q4 2024, reducing net financial debt and supporting future growth.

• Backlog remains strong at €1.6 billion, focused on high value-added and low carbon solutions, providing visibility into 2025.

• 2024 is a consolidation year, with significant sales and margin growth expected in 2025 as ADNOC project deliveries ramp up.

• All business segments contributed positively despite macroeconomic and geopolitical challenges.

Financial highlights

• H1 2024 sales declined 8.5% year-over-year to €398 million; EBITDA down 22.2% to €50.1 million; EBITDA margin at 12.6%.

• EBIT fell 33.1% to €27.4 million; net profit dropped 67.7% to €6.5 million; net margin at 1.6%.

• Net financial debt rose to €395.3 million, mainly due to Abu Dhabi plant investment and higher working capital.

• Working capital increased to €321 million (39.4% of sales), above the 30% target, driven by stockpiling for strategic projects.

• Liquidity position at €222 million, with cash holdings of €141.4 million as of June 2024.

Outlook and guidance

• H2 2024 expected to show improved turnover, EBITDA, and margins as strategic order invoicing begins; ADNOC revenues to start contributing at year-end.

• 2025 and 2026 projected to deliver considerable growth, supported by robust backlog and new plant operations.

• Cash inflow from Mubadala deal in Q4 2024 will reduce net financial debt to €215 million (1.9x EBITDA pro forma).

• NT2 Strategic Plan targets €1.2–1.4 billion in revenue and over €200 million EBITDA by 2027.

• CRA OCTG revenues projected to reach €350 million in 2025/2026, up from €150 million in 2023.