UPDATE 1-Vallourec sees slight margin drop in H2

* Vallourec Q2 EBITDA 264.4 mln euros

* Q2 sales up 28 pct to 1.12 bln euros

* Says sees H1 EBITDA margin for H2 slighly below H1

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PARIS, July 28 (Reuters) - Vallourec (VLLP.PA) sees underlying margins slightly lower in the second half than in the first, in part due to more modest sales growth and higher raw material prices, it said on Wednesday.

The French seamless tube maker, supplier to the oil, gas, electricity sectors, also said Brazil would incur additional operating expenses as its new mill VSB would start up production in the fourth quarter.

"After the rebound in Q2, the positive sales trend is expected to continue at a more modest pace during H2 2010," Vallourec said in a statement.

"The recent increase in the raw material prices will impact production costs in the coming quarters, while selling prices are being increased. However, the negative price/mix effect in the power generation business will impact margins."

The outlook came after Vallourec, a competitor of Italy's Tenaris (TENR.MI), posted a 78 percent rise in earnings before interest, tax, depreciation and amortisation (EBITDA) to 264.4 million euros for the quarter to June 30.

Revenues during the period reached 1.12 billion euros, up 28 percent against the same period last year.

The results beat an Thomson Reuters I/B/E/S forecast of 225 million euros for EBITDA and a sales forecast of 1.09 billion euros.

(Reporting by Astrid Wendlandt and Benjamin Mallet; editing by Elaine Hardcastle)