Good morning, everyone, and welcome to the results of research for the first half of 2025 at Tubacex. My name is Raquel Ruiz Conde, and I'm responsible for Investor Relations. I'm with me Josu Imaz, the CEO for the group, and Guillermo Ruiz Longarte, the CFO. We'll start with a brief presentation on the main results and highlights, then we'll move on to a Q&A. I'd like to remind you that the questions will be sent in in writing, and for that, you can use the tool provided on the webcast. I'll now hand over the floor to Josu Imaz.
Good morning, everyone, and as Raquel said, welcome to the results research for the first half of 2025 of the Tubacex Group. We'll start the presentation with the headlines for the half-year.
The first thing we have to say is it's been characterized by the uncertainty in the global economic context, which has not gone unnoticed and which affects all companies that operate globally. In spite of that, we closed the first six months with sales figures over EUR 360 million and EBITDA of EUR 61 million. Therefore, the assessment we make of this half-year is positive. We've had issues that have a negative impact and others that have a positive impact. Altogether, our evaluation is reasonably positive. We maintain the backlog at around EUR 1.4 billion, with a strong focus on high-value added products, which gives us visibility for the future and also confidence in future profitability. I believe that we should also highlight that the investment in the Abu Dhabi plant that we have been providing updated information in recent events has concluded successfully.
The last payout related to this investment took place during the semester, but the production of connections is already running since last year, and we've started cold pipe rolling. We continue with the startup schedule for the plant, and we consider that it's an asset that's going to give us very good news in the short, medium, and long term. With all this, and obviously with a reasonable question mark regarding what will happen in the world and how the general situation will evolve as a result of the tariff war, we maintain a positive perspective for the rest of the year. At the same time, we also maintain our optimism with regard to our position and medium and long-term perspective and the commitment of Tubacex towards the strategic plan 2027 and its specific goals.
Moving on to a breakdown of the main economic and financial figures, as I said, sales in the first half of EUR 361 million, 9% lower than sales during the same period last year, EUR 61 million in EBITDA with a margin of almost 17% and EBIT of EUR 37 million, 10.3%. Earnings before taxes of EUR 20.3 million and net profit of EUR 15.6 million, which represents 4.3% over sales in the period and 140.9% more than in the same period last year. Regarding the balance sheet figures, we closed the semester with a working capital of EUR 384.6 million, and I'll break down this figure later on. Clearly, we've reached the peak, and in the coming months, quarters, and half years, this figure will continue to go down significantly.
As a result of this, we have a net financial debt at the closing of June of EUR 369 million, which is an increase in working capital, as well as the final payout related to the divestment in Abu Dhabi that I mentioned, as well as the payout of dividends that has already been made during the semester. We have a net financial debt-to-EBITDA ratio of 3.1. As I said, the prospects are clearly deleveraging in the coming months and quarters, and therefore, we maintain the perspective of reaching the goal of between two and two and a half times by the end of the year 2025. Moving on to some more details on sales and EBITDA. I mentioned elements that have had a negative impact and others that have had the opposite positive impact. There are two that have had a clear negative impact.
That's the price of nickel, which compared to last year has an average price 12% lower, which has a direct effect on the sales figures and the Euro-Dollar exchange rate with the depreciation of the dollar during the first half of this year, with an accumulated drop of 12.8%. As well as this, obviously, the global economic context has had an impact on the activity of our plants, as well as moving forward in the production of major orders that have not yet been built. These are elements that provide an explanation to a lower figure in sales. However, EBITDA increases compared to the first half of 2024 by 21.8%. The elements I mentioned earlier, as well as having a negative impact through a reduction in the sales figure, also has a negative impact on EBITDA.
We see the first effect of the drive from the license agreement for our agreement for connections with ADNOC, which, as you know, is a multi-annual agreement with payouts in 2025, 2026, 2027, and 2028. In 2025, we are starting to see the results, and we will see it on a recurring basis. Regarding the outlook, we can only pay attention to the development of the geopolitical and global macroeconomic situation and monitor it closely and act quickly and resiliently, as we've been doing in the past months, even though our outlook is positive for the rest of the year, both in results and margins. We also expect a considerable improvement in the balance sheet with the financial deleveraging that will be significant when we start to build and monetize the production that we've been accumulating, linked to the ADNOC contract for Abu Dhabi and the Petrobras contract in Brazil.
As we repeat and reiterate our commitment with the group's goals up to 2027. Here we see the main financial figures that I already mentioned: the increase in net financial debt, as I said, with an effect of an increase in working capital and EUR 41.6 million in CapEx during the year, as well as the dividend impact. On the working capital side, what we've been saying during recent quarters and semesters, we're accumulating working capital, and we started to build in the month of July. Therefore, we have reached the peak as of June 30, and we're starting the drop and therefore starting to recover the figures both in working capital and net financial debt and net financial debt-to-EBITDA ratio. We have EUR 134 million in cash, a liquidity of EUR 216 million, and a 33% solvency rate.
Regarding sales in these two charts, we can see the distribution by market segments and sectors we serve, as well as by the geographies we serve. These are a continuation of what we've been showing previously. We continue to have a third of our sales assigned to the gas industry, another third approximately to the industrial sector, and the rest is divided up between the other markets that we serve with our catalog of products and services. In any case, a significant relative weight of premium products with a high added value and strategic customers that also respond to long-term agreements.
On the right, we have the geographic distribution where we also maintain the usual distribution in the latest quarters and semesters, and we're starting to see the effect of our important presence in Abu Dhabi with an increase in the relative weight of Asia and the Middle East up to 48%. The rest has equal shares approximately between Europe and America. We don't expect major deviations in this sales distribution, but I think it is worth mentioning again that we've had a slowdown in order intake in recent months as a consequence of the uncertainty. Therefore, if we exclude the contract linked to ADNOC, it's been a good quarter with respect to order intake in the rest of the industries and segments. Specifically, the most commoditized range of products is the one that's suffering the most, as well as the segment of products where we put less of a focus.
We have confidence that our catalog of products and services is appropriate, and we have the adequate tools to navigate in the best possible way during these times of uncertainty and take off as long as the uncertainty disappears. As I said, with a poor book-to-build of 0.7x , in spite of this, we maintain EUR 1.4 billion in backlog with good expected margins and a clear preponderance of premium products and strategic customers. Here you can see a list of the main contracts signed during the first half. Again, the relevance of the relationship and strategic position we have in Abu Dhabi and specifically with ADNOC, which serves as a platform to continue to grow in this sector in the rest of the world.
A sector that is also being affected by a slowdown and a delay in investment decisions, our sector where our position, and even more with the Prime proprietary connection, places us, as I said, in an excellent platform to be able to expect good news in the medium and long term. In generation, we continue to obtain contracts for important projects. In subsequence, we still have a clear leadership position. We still have pipeline opportunities in the short and medium term that are very significant. Obviously, this is also being affected by a delay in decision-making. It is very important to highlight under this point that our lower order intake isn't due to a less success rate in the tenders. The tenders are being delayed. In subsequence, we still have a very high success rate and a clear leadership market share.
In power generation, the fact is that there are a number of very interesting projects in Asia that, although it's not a transition to new energies, it will provide conventional energy, but much more efficient with lower emissions. Our position there is positive, and we also expect good news in the medium term, as well as in nuclear. The pipeline of opportunities in nuclear, both in the maintenance of traditional power stations and in the start building and commissioning of nuclear plants with the new modular technology, have a very good outlook. Our position is also excellent, and we think it's a matter of time to start taking timely decisions to start to feed our backlog in this segment. In low carbon, we continue to move forward in hydrogen, which hasn't yet acquired a significant dimension in the market.
We're also making progress in carbon capture, and we have already delivered the first capture project in Brazil, where we also have a very good position. In the rest of the markets, they are younger markets, let's say, and they're going through a development curve. As in the rest of the markets, progress is slow, but we still have significant activity and clearly a strong position. If we look at the breakdown of the backlog, clearly influenced by the enormous relative weight of the 10-year contract with ADNOC, if we excluded it from the distribution by industries, we would have a distribution that would be fairly similar by segments to that of current sales. I'm not going to go into details on the evolution of the business in the various segments in OCTG.
We've already mentioned the progress in the contracts for ADNOC in Abu Dhabi and Petrobras in Brazil that will start to invoice and monetize this quarter. As I said, the Abu Dhabi plant is making progress according to the schedule in a very positive way. We can highlight in this segment the signing of the license agreement with ADNOC for the use of our Sentinel Prime connection in their non-CRA pipe. Here, the evolution has been positive within the difficulties of the moment, and the outlook continues to be positive. In drilling, the fact is that it's a market segment that's suffering globally, and especially in the United States, when it seemed that with the new administration, it was going to be given a thrust.
Quite the opposite, the number of wells in operation has been going down over the last few months, and we expect this to come back to normal and come back to a growing curve. The situation in the North Sea and the Middle East, I would say, is stable. In the subsea segment, as I said, normal production and contracts in the backlog and very good perspectives in all cases, and waiting for the decisions to start to be taken so that we can start to feed our backlog. In industrial, I think we have to mention that the distribution and downstream markets in general have slowed down in particular and have shown special weakness in Europe, characterized by weakness in the raw material prices. Therefore, this is a segment where the slowdown has been seen even more clearly. I've mentioned the most relevant aspects related to the generation segment.
Here, as I said, mainly in the nuclear sector, we still have very good outlooks for the medium and long term. In low carbon, the contract already mentioned for carbon capture and carbon storage, and the fact that the one big beautiful bill has been passed with major implications for CCUS technologies, which we expect to give an important drive to this industry in North America in the coming months and semesters. You can look at the details in the document. We're moving forward with a firm step. These are industries that are only just taking off, and we are not seeing the cruising speed that we see in other industries. In the new markets, I think it is worthwhile pointing out that the aerospace and defense markets are growing globally. In this segment, our position is strong.
We have a growth potential that we believe is significant, and we're moving forward in that position, mainly in America, with plans to extend our position to other geographies. In the hydraulic and instrumentation segment, similar to the industrial sector, it's a time of weakness with a significant slowdown, and we're waiting for the uncertainties to be resolved. Here, we can see the ESG indicators for the environment, the sustainable value chain, and people. You can see that in practically all cases, we're on the right path to meet the 2030 goals. Specifically, in relation to the goals we had for 2025, in all cases, we are also in compliance with the goals set for this year. We're evolving in a favorable way, and this is a clear sign of Tubacex's commitment to sustainability in the broader sense.
Regarding the stock evolution at the closing of the half-year, price was EUR 4.195, which has meant a reevaluation of 20.9% in the half-year with a resulting capitalization of EUR 530.9 million. With a target price that is still high compared to the current price, EUR 5.27, which would represent a potential upside of 42%. Therefore, the consensus clearly recommends our share as a share that's going to generate value in the future. We have a number of points related to the strategic project with ADNOC, the ADNOC contractor that I've already mentioned. I'm not going to repeat too many of the details, but last year, we started to manufacture pipes in the Spanish plant. We also started to thread the connections at our Abu Dhabi plant. This month, we've started cold production at the Abu Dhabi plant. We're moving forward in a very positive way.
What we are seeing is a speeding up in order intake. This potentially means that we will exceed the minimum volumes that were foreseen within the framework of this contract. Good news. As I said earlier, regarding billings, we started billings in July, and therefore, we're starting to monetize this contract. Regarding the license agreement with ADNOC signed during this first half, it's a $ 50 million operation, which obviously has a number of costs associated to developing the connection and the application to ADNOC. It's a contract that will monetize between 2025, 2026, 2027, and 2028, as I mentioned earlier, and will put us in a very interesting platform to potentially use our connection on a similar level to other customers in other geographies and CER, which is our main target, to be able to go to the big customers without depending on third-party connection licenses from the competition.
Finally, we can say that 2025 we consider to be a positive year in a challenging environment, clearly characterized by macroeconomic uncertainty. As I've repeated more than once during this presentation, Abu Dhabi represents a key point in the development and the performance of this year with the startup of the plant. The approval of our connection at the end of last year and the license agreement with ADNOC for the Sentinel Prime connection is something that changes the Tubacex outlook for the future. Although it hasn't been part of our business model in the past, it's already a reality and therefore becomes a recurrent element in our business model. We maintain a robust order backlog, a healthy backlog. We have healthy outlooks with regard to profitability. I'll close with this. We maintain our commitment to the strategic plans for 2027. Thank you very much, Josu.
We've been very clear because there are a few questions, but I'll try to group them by subjects. First of all, as a disruptive effect during the first half, as you mentioned, regarding the ADNOC license contract, we're asked whether we can quantify what the impact of the ADNOC license is this year. If it's on any specific line in the P&L, or can you give us any more details? We can break it down a little bit, although I think that from the beginning, we've been enormously clear about this matter, which, as you can understand, we're talking about a technology solution that is absolutely disruptive in the market. It completely changes the dynamics of not the CRA or high alloy pipes, but the whole upstream dynamics in oil and gas, in carbon, steel, or other alloys.
As you know, the impact of the license agreement was published, put at $50 million. This contract is a deferred payment contract over four years, approximately $20 million this year, and the remaining $30 million over the next three years. The company outlook, having broken down this revenue, and while understanding that it's logical for this development requiring a number of costs, and therefore, we're using a prudent recognition of the effects on the company, or said in other words, it doesn't mean that we adjust the accrual to payment of this contract with ADNOC, but the aim is that the revenue will be less than half of those $50 million. This may sound a little bit strange, but the least important thing about this contract is its value of $50 million. Why do I say this?
The important thing is ADNOC is one of the main oil companies and public operators in the world, and it has adopted the solution for its entire product portfolio, not only in stainless steel, but also in alloys and carbon steel. This means a chain effect that will have to evaluate over time because it's an implicit engagement in a solution that we sometimes think it can take years to be approved or achieve a technological prescription. This is a very important factor, and it indicates that the perception of the company is that this is not an extraordinary or non-recurrent revenue.
What we expect over the necessary maturing time is to develop ad hoc business lines to promote this technological solution and develop it not only at ADNOC, but with all the public and private relevant operators in the oil and gas upstream world, not because we say so, but because technologically, the characteristics of the solution are way above other solutions on the market. Having said this, the clear information is that it's a signed contract, a firm contract deferred in a payment, prudent in the recognition of the revenue.
When we look at the development of this business line in two or three years' time, what the company expects and all the technical and commercial teams expect is for this to become one of the main business lines for the group in the medium and long term, as in the past happened with other significant events such as joining the world OCTG, joining the umbilical world, or becoming right now one of the key players in support or development for the nuclear industry, both in the conventional version and the disruptive versions with the SMRs. We think that it's not something for the future. It's already consolidated. It's been validated as one of the most important operators in the world. From now on, there will be a technological, strategic, and commercial development that will tell us how much this solution can contribute in the future.
This partly answers the question, but there are more coming in asking us to explain the negotiation of possible future license, the commercialization of Sentinel both in CRA and non-CRA businesses. What can we expect in the short, medium, or long term? Obviously, the negotiations that are underway are negotiations we can't discuss in public because, first of all, we have to respect the confidentiality of our customers. We've opened up various lines of action in the main markets, in our objective market, OCTG, with our CRA pipes. The first aim is to expand our CRI presence beyond ADNOC and Petrobras, which is where we have a more significant presence. Therefore, our commercial strategy is to offer our catalog of products now with our own connection to the big customers, mainly of gas and oil and gas all over the world. They are sufficiently well known by our audience.
This is the first line of action, and therefore, we depend on the tendering pace, and first of all, the approval of the solution and the participation in tenders and pluriannual purchasing. These big companies don't put out big contracts every year. We've signed an extraordinary 10-year contract with ADNOC, and these companies sometimes have ad hoc contracts for specific projects, but very often, they have framework contracts for two, four, five, seven years. A new tender has to wait for the previous framework contract to expire. That's the first point. The target companies are clear, and so are the target geographies because they are the main gas-producing geographies in the world. You don't need much imagination to guess in what parts of the world we're trying to position ourselves in a different way to where we are today.
Secondly, how we use the connection for those pipes that aren't manufactured by Tubacex, that aren't CRA pipes. There we have the carbon segment where we've signed this license agreement with ADNOC, which let's say is the lowest segment. There's the intermediate segment with chrome alloys. These are pipes that we don't manufacture either. From a more to less, let's say that it's the second category. In both cases, the point is to get the end customer to pay you for the use of your connection or doing what our connection competitors used to do in the past with us. I'll apply my connection with a third party that manufactures pipe that I don't manufacture. Together with Tubacex, we can make a proposal, a competitive proposal to our customers. These are the three lines of action we're working on. The fact is that we're optimistic in all three.
Obviously, we start with the CRA segment, then the intermediate segment, and end up in the most commodity segment of a carbon steel pipe. Continuing with what we're discussing, the margins in the quarter have been surprising again, close to 17%. The question is, are these margin levels sustainable because they're above the strategic goal we established of 15%? I think that there are several things at play here. In the same way we answered the question before, we're also tremendously clear here. In such a complex global business environment, the margins in the first half are clearly driven by the effect of the license. Not just that, because obviously we've dropped in volume. For example, European distribution or commodity products, we can see in our sales volume that it's not high. It's low and let's say consistent with what we're seeing in our business.
What we can also say is that in the product mix that's being sold and billed during the first half of the year, there's high added value product, a product with high margins. We expect the second half of the year, both because of the ADNOC project and the development of important projects such as the case of Petrobras. I'd like to remind you that at the end of 2024, there were very important contracts awarded over EUR 100 million, and this is going to be billed over the half year. That will maintain or improve the situation. The strategic commitment of the company is to maintain profitability between 14%- 15% over sales.
We feel that even in an adverse environment, we can achieve that margin level based, as I said before, not on volumes, which in this situation, the market isn't providing the volume to us or to the competition, but the group is positioned in those segments and products where it should be positioned. In summary, it's a position of products and framework agreements that date back a long time. This is related to the revenue and the results of the ADNOC contract. When and how much impact will the Abu Dhabi operation have on the Tubacex accounts? When we talk about Abu Dhabi, we're talking about the ADNOC contract, to be specific. The positive effect, and I'm going to take this to the accounts, is already there, and I'll explain. The construction plans for the plant have been strictly met.
We're talking about an investment of $90 million in the Emirates to manufacture a complex product, a difficult, very demanding product, and provide a final solution, not only in the manufacturing and delivery of the product, but in all the logistics services and installation at the well, which is absolutely new. Not because we haven't done it in other cases, such as in Petrobras, but because of the volume and the significance and the long duration of the contract. When I explained the debt of the company, the debt in June reflects EUR 120 million in a manufactured product for this project in various stages of manufacturing. Of that product, almost $50 million is a completed product, finished product with the connection ready. Once again, we're talking about Sentinel Prime, which is our proprietary connection to be delivered to the customer.
Obviously, the whole first half of the year records the effect of all the production, which obviously has an effect on the company's cost absorption. It reflects the conclusion pending some final payments and the use of all the CapEx and the investment in Abu Dhabi. From now on is when we trigger, let's say, the billing and monetization process. Let's say that we've reached the necessary investment level in CapEx. We've reached the working capital peak, which is excellent news, even though the debt picture is EUR 3.1 million in June, having EUR 120 million in material ready to be sold and linked to a take-or-pay contract with ADNOC, which is a AAA company in market valuation. We always say that Tubacex has no debt, and people may be puzzled. How can a CFO say that?
It's because the debt is less than working capital, and the working capital has been sold. If you've sold your working capital, it's a matter of timing getting to the end, as long as you don't have problems in collecting, which isn't the case with the kind of customer we're working with. Having said this, the ADNOC project with regard to the production structure and the absorption of the cost of the company has had a very relevant effect in the first half. It's been a very important counterweight for the drop in the market after the March tariff storm. What we expect is that from now on, it will provide profitability and monetization and a constant growth project for the sales from that plant and the operating margins up to the limit or even more.
If in this country or other countries, mainly the Emirates, we decide to carry out other investments that can strengthen the connection, the finishing, or the local content in the Emirates. An important part of it has already been done, and there's an effect on the accounts that is important. I would say that the best is yet to come in the second half of the year, and especially when we see the plant and all its operations at cruising speed in 2026. Josu, when you say that you expect positive outlooks in results and margins, can we consider that the third and fourth quarters could be similar to the second quarter, or do we have to be more cautious? Our outlook, obviously, depending on how market conditions evolve, our outlook is positive in the sense that we'll be capable of maintaining the results we've given in the first half.
Obviously, part of it has to do with the execution of the backlog we already have, and part of it that has to do with us being capable of filling in the gaps in the backlog to complete the year. With a positive assessment of the first half, the positive outlook for the second half would be pretty much in line with the first half. We've justified a reduction in sales among other reasons for the depreciation of the dollar. We're asked about the exposure in sales and costs in that currency. Let's see. Tubacex, traditionally, has given a message of neutrality versus the dollar in the sense that a substantial part of our sales were in dollars, but also a part of the purchasing of ferro alloys was also in dollars. That provided a natural hedging of the currency.
At the same time, as we've said very often, we also do integral coverage of both sales and purchases. Obviously, this was a production that in the current business framework we're heading for is changing radically for two reasons. One of the reasons is that we have two production plants in the U.S. that manufacture pipe and are dedicated to the world of drilling. On the other hand, the mega contract with ADNOC is a contract in dollars, $1 billion over a maximum term of 10 years. The fact is that we're exposed in the Emirates and in the United States decorrelates that relationship, let's say.
If we do it very simply, in a company that has the intention of billing EUR 1 billion over a number of years, it's easy to see billing in the Emirates over $150 million and a minimum of $100 million in the United States. We would be saying that practically 25% of our sales are and will be dollarized. This obviously increases exposure, increases the currency risk. Currently, our hedging mechanisms and margin assurance have to be consistent with a new Tubacex position. Beyond the circumstantial depreciation that has happened with the dollar during this period, we also have to say that we've looked for that exposure because many of the end markets for our products, like the United States or Brazil or the Emirates, the contracts are always dollarized. We aspire to have a higher and higher percentage of our contracts in dollars.
Specific questions regarding the figures for the semester. What debt can be accepted in the joint venture with Nella for OCTG? Going back again a little bit again. A very concrete idea. We've spoken a lot about the ADNOC project as a multi-annual project. In the development of this project, and more extensively, last year, we closed an agreement with the Mubadala Group. The Mubadala Group, buying 49% of the carve-out of our OCTG operations, plus 49% of our plant in Abu Dhabi, paid us $200 million. This means an implicit global valuation of around $400 million for that operation. This was the incoming side, let's say. On the other hand, as we've said, we've built a $90 million plant, and we are currently dealing with EUR 120 million in working capital in the group. In this situation, looking at the two consecutive years, there's a neutrality factor.
In other words, firstly, the first part has served to pay for the second part. The structural debt itself in the joint venture in the Emirates is zero. The only thing we'll be able to see in the Emirates will be facilities, revolving facilities, or short-term facilities related to the financing of the working capital itself. In the end, the joint venture will be a reflection of what Tubacex is globally, trying not to have a structural debt or a negative debt. If there is a debt, it should be a mere reflection of the peak in working capital at each point in time. They also refer to the specific items of other operating costs, where there's been a major reduction in the second quarter, and they ask whether there's any specific reason for that reduction in operating costs.
As far as you know, looking at the structure of the P&L in detail, a company like Tubacex, which has a very strong steel component, and therefore rigidities, part of the costs are not purely variable or are semi-fixed. Let's say that since the pandemic, we are a company or group of companies that try to provide symmetry between the cost base and the business generation base. It's easy to see that when sales go down or the added value or the raw materials are adjusted more or less automatically with the differences that the stock variation can represent. The operating and personnel costs, as far as possible, we try to maintain ratios that are consistent with the business volume. That's never easy, as I said, in an environment that sometimes has the rigidity that comes from the steel part of the business. We also asked about the market.
Apart from the ADNOC contract, we see that the backlog has gone down. They ask about three specific sectors, whether we're seeing a slowdown in Petrobras in order intake or expect some delays as we saw last year. They also ask about the aerospace and defense sectors, what are our outlooks there geographically. Finally, some more details on the power generation and ultra-supercritical boilers. What's the market potential and what are we seeing there in the project pipeline? In what has to do with the OCTG segment and the Petrobras question, the general rule is affecting practically all segments and all customers. At Petrobras and other main oil and gas operators in the world, we're seeing a slowdown in decision-making. This is evident, and we can't look the other way. That's the way the market is behaving.
It's logical in view of the tariff uncertainty that's being suffered by everyone in aerospace and defense. In general terms, we might think that it's different, and we corroborate this. The slowing down isn't as big as it is in other industries. In certain geographies, there isn't a slowdown. In fact, there's a drive in the sector. Here we have to see that there's a difference between commercial aerospace, defense, and aerospace. Not all three segments are behaving in the same way. Our presence in this segment is concentrated around the United States and North America. We have a robust position. We have an order backlog for more than 12 months, and therefore, the outlook for this market in North America is very positive. We also hope in the medium and long term for it to be a source of growth for the company.
Regarding the rest of the geographies, we're also anticipating interesting growths and developments in Asia and also in some potential specific geographies in Europe. To position ourselves on the globe, North America is performing very strongly in the sector. Asia and India are starting to push the sector, but they're still far away from North America. In Europe, we're starting to see a possible pipeline construction for the coming years. Finally, the last question had to do with the ultra-critical boilers in Asia. The fact is that when we talk about energy transition, I think that we all know that not all geographies and all economies start from the same point. In Asia, we have to be very aware that the most contaminating industries have a higher weight than in more developed economies. There's a potential for improvement and investment, starting from fossil fuels in these geographies.
With significant but reasonable investment levels, we'll make it possible to reduce the emission levels quite massively without having to make a transition to new technologies. That's happening in Asia in general. In particular, in India, we're working with the large national engineering firms that have the mandate of developing these technologies. We expect that during 2026, the machinery will be started to launch the first pilot plants with these new technologies. We hope that they will be successful and therefore the beginning of an investment cycle in ultra-critical boiler technology in Asia in general and India in particular. The two final questions, the first one is almost a letter to Father Christmas. What's the size of the potential market for Sentinel in non-CRA applications? I think that we've discussed it recurrently at meetings. This is something that's difficult to quantify by us or by any independent study services.
It's a figure that isn't on the market. It's a figure that doesn't exist as a parameter, as an indicator. We have to bear in mind that the steel pipe market is an enormous market. They can be taken to a market subsegment that Tubacex operates in, which is the subsegment of the seamless steel pipes, which is an extremely small part of the global market. In other subsegments, the biggest market in volume is the carbon steel sector, obviously, which is more commoditized. With the price of Euros per kilo, that's very far away from the prices for high added value pipes, which is the playing field in which Tubacex operates. The figures are enormous in volume. Pipe is an absolutely different scale. It's difficult to segment how much is pipe, how much is connection, how much is logistics, and related services. The figure doesn't exist.
The parameter doesn't exist. We can't make it up. Unfortunately, we can't answer the question with a number. A more general question, finally, what's the biggest weakness or risk we see at Tubacex and the sector? I personally would add, what is the biggest potential? The greatest weakness right now, I would say, is the vulnerability of the industry, ours, and I would say almost any industry in such an uncertain macroeconomic context and potentially so volatile. The rules of the game can change so much in such a short period of time for so many companies that the key and the virtue lies in being able to adapt quickly to the resulting scenario. I think that that is where our greatest strength and virtue is.
I think that we have the necessary speed and resilience, and we have the necessary conditions to be able to adapt to the resulting scenario because we're positioned in higher added value markets, because geographically we have an interesting diversification, and diversification is important and increasing. We also have to recognize it. We have a team of people that will have a very positive performance in whatever the scenario is. Those are the questions we had. If there are any additional questions, you know that you can get in touch with us. We'll be available to answer any additional questions. Thank you very much for your collaboration, for your interest in the company, and we hope to see you again soon. Thank you very much.