Tenaris S.A. (NYSE, Buenos Aires and Mexico: TS and MTA Italy: TEN)
(“Tenaris”) today announced its results for the quarter ended June
30, 2019 in comparison with its results for the quarter ended June
30, 2018.
Summary of 2019 Second Quarter Results
(Comparison with first quarter 2019 and second quarter of
2018)
|
2Q 2019 |
1Q 2019 |
2Q 2018 |
Net sales ($ million) |
1,918 |
|
1,872 |
|
2 |
% |
1,788 |
|
7 |
% |
Operating income ($ million) |
234 |
|
259 |
|
(9 |
%) |
222 |
|
5 |
% |
Net income ($ million) |
240 |
|
243 |
|
(1 |
%) |
166 |
|
44 |
% |
Shareholders’ net income ($ million) |
241 |
|
243 |
|
(1 |
%) |
168 |
|
43 |
% |
Earnings per ADS ($) |
0.41 |
|
0.41 |
|
(1 |
%) |
0.29 |
|
43 |
% |
Earnings per share ($) |
0.20 |
|
0.21 |
|
(1 |
%) |
0.14 |
|
43 |
% |
EBITDA ($ million) |
370 |
|
390 |
|
(5 |
%) |
363 |
|
2 |
% |
EBITDA margin (% of net sales) |
19.3 |
% |
20.9 |
% |
|
20.3 |
% |
|
In the second quarter of 2019, sales rose 2%
quarter-on-quarter, as higher sales in Mexico and various Eastern
Hemisphere markets compensated for a seasonal decline in sales in
Canada. Operating income declined 9% quarter on quarter resulting
from the non-repetition of the $15 million tariff recovery recorded
in the previous quarter and higher maintenance costs associated
with a major overhaul of our facilities in Mexico. Net income
amounted to 12.5% of sales.
During the quarter, our free cash flow amounted
to $245 million, as we continued to reduce our working capital in
the amount of $147 million. Following a dividend payment of $331
million in May 2019, we maintained a net cash position (i.e., cash,
other current and non-current investments less total borrowings) of
$706 million at the end of the quarter.
Appointment of Chief Financial
Officer
As previously announced on June 11, 2019,
effective as of August 5, 2019, Ms. Alicia Mondolo will assume the
position of Chief Financial Officer, replacing Edgardo Carlos.
Market Background and
Outlook
In the USA, drilling activity has slowed down
and is likely to remain around the present level as oil and gas
prices have been subdued and operators maintain a disciplined
approach to capital expenditures. In Canada, drilling activity
remains well down on last year with no recovery expected before the
end of the year.
In Latin America, drilling activity is expected
to remain at current levels until the end of the year amid
uncertainty about elections in Argentina and the financial position
of Pemex.
In the eastern Hemisphere, drilling activity
continues to improve, led by gas developments in the Middle East,
and a gradual recovery in some offshore basins.
In the third quarter, our sales will be affected
by lower average selling prices, seasonal factors and the impact of
major maintenance stoppages amplified by the triennial intervention
in Mexico, before recovering in the fourth quarter. We expect
to mitigate most of the impact of lower average selling prices with
lower costs and complete the year with an overall EBITDA margin
similar to that of 2018.
Analysis of 2019 Second Quarter Results
Tubes
The following table indicates, for our Tubes
business segment, sales volumes of seamless and welded pipes for
the periods indicated below:
Tubes Sales volume (thousand metric tons) |
2Q 2019 |
|
1Q 2019 |
2Q 2018 |
Seamless |
674 |
|
640 |
|
5 |
% |
689 |
|
(2 |
%) |
Welded |
173 |
|
184 |
|
(6 |
%) |
146 |
|
19 |
% |
Total |
846 |
|
824 |
|
3 |
% |
834 |
|
1 |
% |
The following table indicates, for our Tubes
business segment, net sales by geographic region, operating income
and operating income as a percentage of net sales for the periods
indicated below:
Tubes |
2Q 2019 |
1Q 2019 |
2Q 2018 |
(Net sales - $ million) |
|
|
|
|
|
North America |
863 |
|
893 |
|
(3 |
%) |
827 |
|
4 |
% |
South America |
337 |
|
330 |
|
2 |
% |
310 |
|
9 |
% |
Europe |
194 |
|
158 |
|
22 |
% |
179 |
|
9 |
% |
Middle East & Africa |
315 |
|
301 |
|
5 |
% |
299 |
|
5 |
% |
Asia Pacific |
105 |
|
81 |
|
29 |
% |
71 |
|
47 |
% |
Total net sales ($ million) |
1,814 |
|
1,763 |
|
3 |
% |
1,686 |
|
8 |
% |
Operating income ($ million) |
216 |
|
238 |
|
(9 |
%) |
197 |
|
10 |
% |
Operating margin (% of sales) |
11.9 |
% |
13.5 |
% |
|
11.7 |
% |
|
Net sales of tubular products and services
increased 3% sequentially and 8% year on year. Sales increased in
all regions except North America, in line with the increase in
volumes as average selling prices remained flat. In North America
sales declined 3% following the decline in Canada due to the spring
break-up season, largely offset by higher sales in Mexico. In South
America we had higher sales of conductor casing in Brazil. In
Europe we had a strong quarter in the North Sea and higher sales of
line pipe to distributors. In the Middle East and Africa sales
increased due to higher sales in Kuwait, UAE and Northern Africa.
In Asia Pacific, sales increased due to higher sales in China and
Indonesia.
Operating results from tubular products and
services decreased 9% sequentially, from a gain of $238 million in
the previous quarter to a gain of $216 million in the second
quarter of 2019. Despite the increase in revenues, our operating
margin decreased 160 basis points mainly due to flat average
selling prices despite higher costs (resulting principally from the
non-repetition of the $15 million tariff recovery recorded in the
previous quarter and higher maintenance costs associated with a
major overhaul of our facilities in Mexico).
Others
The following table indicates, for our Others business segment,
net sales, operating income and operating income as a percentage of
net sales for the periods indicated below:
Others |
2Q 2019 |
1Q 2019 |
2Q 2018 |
Net sales ($ million) |
104 |
|
109 |
|
(5 |
%) |
103 |
|
1 |
% |
Operating income ($ million) |
18 |
|
21 |
|
(12 |
%) |
25 |
|
(27 |
%) |
Operating income (% of sales) |
17.7 |
% |
19.1 |
% |
|
24.5 |
% |
|
Net sales of other products and services
decreased 5% sequentially and increased 1% compared to the second
quarter of 2018. The sequential decrease is mainly related to lower
sales of energy and scrap.
Selling, general and administrative
expenses, or SG&A, amounted to $339
million, or 17.7% of net sales, in the second quarter of 2019,
compared to $345 million, 18.5% in the previous quarter and $338
million, 18.9% in the second quarter of 2018. Sequentially SG&A
decreased 2% due to lower allowance for doubtful accounts and
logistic costs, partially offset by higher consultancy fees,
general expenses and provisions for contingencies.
Financial results amounted to a
loss of $6 million in the second quarter of 2019, compared to a
gain of $24 million in the previous quarter and a gain of $39
million in the second quarter of 2018, as during the 2Q 2019 there
was a general appreciation of our most significant currencies
versus the U.S. dollar, while in the previous quarter there was a
significant depreciation of the Argentine peso. The loss of the
quarter corresponds mainly to an FX loss of $8 million; $5 million
loss related to the Japanese Yen appreciation mainly on newly
recorded leasing liabilities (after adoption of IFRS 16), $1
million loss related to the Argentine peso appreciation on trade,
social and fiscal payables at Argentine subsidiaries which
functional currency is the U.S. dollar and $1 million loss on Euro
denominated intercompany liabilities due to the appreciation of the
Euro.
Equity in earnings of
non-consolidated companies
amounted to $26 million in the second quarter of 2019, compared to
$29 million in the previous quarter and $41 million in the second
quarter of last year. These results are mainly derived from our
equity investment in Ternium (NYSE:TX).
Income tax charge amounted to
$15 million in the second quarter of 2019, compared to $70 million
in the previous quarter and $135 million in the second quarter of
last year. During the quarter, our income tax charge was reduced
mainly by the effect of the Argentine peso revaluation on the tax
base at our Argentine subsidiaries which have U.S. dollar as their
functional currency, and the application of the fiscal inflation
adjustment in Argentine subsidiaries(~$25 million).
Cash Flow and Liquidity of 2019 Second
Quarter
Net cash provided by operating activities during
the second quarter of 2019 was $342 million, compared to $548
million in the first quarter of 2019 and $351 million in the second
quarter of last year. During the second quarter of 2019 we
generated $147 million from the reduction in working capital.
Free cash flow amounted to $245 million after
capital expenditures of $97 million. Following a dividend payment
of $331 million in May 2019, we maintained a net cash position
(i.e., cash, other current and non-current investments, derivatives
hedging borrowings and investments less total borrowings) of $706
million at the end of the quarter.
Analysis of 2019 First
Half Results
|
6M 2019 |
6M 2018 |
Increase/(Decrease) |
Net sales ($ million) |
3,790 |
|
3,655 |
|
4 |
% |
Operating income (loss) ($ million) |
494 |
|
435 |
|
14 |
% |
Net income ($ million) |
482 |
|
402 |
|
20 |
% |
Shareholders’ net income ($ million) |
484 |
|
403 |
|
20 |
% |
Earnings per ADS ($) |
0.82 |
|
0.68 |
|
20 |
% |
Earnings per share ($) |
0.41 |
|
0.34 |
|
20 |
% |
EBITDA ($ million) |
760 |
|
717 |
|
6 |
% |
EBITDA margin (% of net sales) |
20.1 |
% |
19.6 |
% |
|
Our sales in the first half of 2019 increased 4%
compared to the first half of 2018. While volumes sold declined 6%,
average selling prices increased 10% as the proportion of seamless
pipes sold increased after completion of deliveries to Zohr project
in the Middle East and Africa region. Sales increased in all
regions, except in the Middle East and Africa. EBITDA increased 6%
to $760 million in the first half of 2019 compared to $717 million
in the first half of 2018, following the increase in sales. Net
income attributable to owners of the parent during the first half
of 2019 was $484 million or $0.82 per ADS, which compares with $403
million or $0.68 per ADS in the first half of 2018. The improvement
in net income mainly reflects a better operating environment
together with a lower income tax, partially offset by lower
financial results and results from associated companies.
Cash flow provided by operating activities
amounted to $890 million during the first half of 2019, including a
reduction in working capital of $346 million. Following a dividend
payment of $331 million in May 2019, and capital expenditures of
$183 million during the first half of 2019, we maintained a
positive net cash position (i.e., cash, other current and
non-current investments, derivatives hedging borrowings and
investments less total borrowings) of $706 million at the end of
June 2019.
The following table shows our net sales by business segment for
the periods indicated below:
Net sales ($ million) |
6M 2019 |
6M 2018 |
Increase/(Decrease) |
Tubes |
3,578 |
|
94 |
% |
3,452 |
|
94 |
% |
4 |
% |
Others |
212 |
|
6 |
% |
203 |
|
6 |
% |
5 |
% |
Total |
3,790 |
|
100 |
% |
3,655 |
|
100 |
% |
4 |
% |
Tubes
The following table indicates, for our Tubes business segment,
sales volumes of seamless and welded pipes for the periods
indicated below:
Tubes Sales volume (thousand metric tons) |
6M 2019 |
|
6M 2018 |
|
Increase/(Decrease) |
Seamless |
1,314 |
|
1,340 |
|
(2 |
%) |
Welded |
357 |
|
431 |
|
(17 |
%) |
Total |
1,671 |
|
1,771 |
|
(6 |
%) |
The following table indicates, for our Tubes business segment,
net sales by geographic region, operating income and operating
income as a percentage of net sales for the periods indicated
below:
Tubes |
6M 2019 |
6M 2018 |
Increase/(Decrease) |
(Net sales - $ million) |
|
|
|
North America |
1,757 |
|
1,634 |
|
8 |
% |
South America |
667 |
|
595 |
|
12 |
% |
Europe |
352 |
|
331 |
|
6 |
% |
Middle East & Africa |
616 |
|
755 |
|
(18 |
%) |
Asia Pacific |
186 |
|
137 |
|
36 |
% |
Total net sales ($ million) |
3,578 |
|
3,452 |
|
4 |
% |
Operating income ($ million) |
455 |
|
391 |
|
16 |
% |
Operating income (% of sales) |
12.7 |
% |
11.3 |
% |
|
Net sales of tubular products and services
increased 4% to $3,578 million in the first half of 2019, compared
to $3,452 million in the first half of 2018, as a reduction of 6%
in volumes was offset by an increase in average selling prices as
the proportion of seamless pipes increased following the completion
of deliveries of welded pipes to Zohr project offshore Egypt. The
increase in sales came from all regions, except the Middle East and
Africa. In the first half of 2019, the average number of active
drilling rigs, or rig count grew 3% worldwide compared to the first
half of 2018. Rig count in the United States and Canada declined
3%, while in the rest of the world the rig count grew 10% year on
year.
Operating results from tubular products and
services increased 16%, from $391 million in the first half of
2018, to $455 million in the first half of 2019. Results improved
following an increase in sales and in margins due a richer mix of
products sold.
Others
The following table indicates, for our Others business segment,
net sales, operating income and operating income as a percentage of
net sales for the periods indicated below:
Others |
6M 2019 |
6M 2018 |
Increase/(Decrease) |
Net sales ($ million) |
212 |
|
203 |
|
5 |
% |
Operating income ($ million) |
39 |
|
44 |
|
(11 |
%) |
Operating margin (% of sales) |
18.4 |
% |
21.6 |
% |
|
Net sales of other products and services
increased 5% to $212 million in the first half of 2019, compared to
$203 million in the first half of 2018, mainly due to higher sales
of sucker rods.
Operating income from other products and
services decreased from $44 million in the first half of 2018 to
$39 million in the first half of 2019 due to a decrease in
operating margin from 22% to 18%.
Selling, general and administrative
expenses, or SG&A, amounted to $684 million in the
first half of 2019, representing 18% of sales, and $687 million in
the first half of 2018, representing 19% of sales.
Financial results amounted to a
gain of $18 million in the first half of 2019, compared to a gain
of $31 million in the first half of 2018. The gain in the first
half of 2019 corresponds mainly to an FX gain of $18 million; $19
million related to the Argentine peso devaluation on Peso
denominated financial, trade, social and fiscal payables at
Argentine subsidiaries which functional currency is the U.S.
dollar. The gain in the first half of 2018 corresponds mainly to a
gain of $19 million related to the Argentine peso devaluation and
$14 million related to the Euro depreciation on Euro denominated
intercompany liabilities (of which $13 million were offset in the
currency translation reserve in equity).
Equity in earnings of non-consolidated
companies generated a gain of $55 million in the first
half of 2019, compared to a gain of $87 million in the first half
of 2018. These results are mainly derived from our equity
investment in Ternium (NYSE:TX).
Income tax amounted to a charge
of $85 million in the first half of 2019, compared to $151 million
in the first half of 2018. The income tax charge in the first half
of 2018 was affected by the Mexican and Argentine peso devaluation
on the tax base at our Mexican and Argentine subsidiaries which
have the U.S. dollar as their functional currency. During the first
half of 2019, our income tax charge was reduced mainly by the
application of the fiscal inflation adjustment in Argentine
subsidiaries(~$32 million).
Cash Flow and Liquidity of
2019 First Half
Net cash provided by operating activities during
the first half of 2019 amounted to $890 million (including a
reduction in working capital of $346 million), compared to cash
provided by operations of $322 million (net of an increase in
working capital of $358 million) in the first half of 2018.
Capital expenditures amounted to $183 million in
the first half of 2019, compared to $196 million in the first half
of 2018. Free cash flow amounted to $707 million in the first half
of 2019.
Following a dividend payment of $331 million in
May 2019, our financial position at June 30, 2019, amounted to a
net cash position (i.e., cash, other current and non-current
investments, derivatives hedging borrowings and investments less
total borrowings) of $706 million.
Tenaris Files Half-Year Report
Tenaris S.A. announces that it has filed its
half-year report for the six-month period ended June 30, 2019 with
the Luxembourg Stock Exchange. The half-year report can be
downloaded from the Luxembourg Stock Exchange’s website at
www.bourse.lu and from Tenaris’s website at
www.tenaris.com/investors.
Holders of Tenaris’s shares and ADSs, and any
other interested parties, may request a hard copy of the half-year
report, free of charge, at 1-888-300-5432 (toll free from the
United States) or 52-229-989-1159 (from outside the United
States).
Conference call
Tenaris will hold a conference call to discuss
the above reported results, on August 1, 2019, at 9:00 a.m.
(Eastern Time). Following a brief summary, the conference call will
be opened to questions. To access the conference call dial in +1
866 789 1656 within North America or +1 630 489 1502
Internationally. The access number is “2147716”. Please dial in 10
minutes before the scheduled start time. The conference call will
be also available by webcast at www.tenaris.com/investors
A replay of the conference call will be
available on our webpage http://ir.tenaris.com/ or by phone from
12.00 pm ET on August 1 through 12.00 pm on August 9, 2019. To
access the replay by phone, please dial 855 859 2056 or 404 537
3406 and enter passcode “2147718” when prompted.
Some of the statements contained in this press
release are “forward-looking statements”. Forward-looking
statements are based on management’s current views and assumptions
and involve known and unknown risks that could cause actual
results, performance or events to differ materially from those
expressed or implied by those statements. These risks include but
are not limited to risks arising from uncertainties as to future
oil and gas prices and their impact on investment programs by oil
and gas companies.
Consolidated Condensed Interim Income
Statement
(all amounts in thousands of U.S. dollars) |
Three-month period endedJune 30, |
Six-month period endedJune 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Continuing operations |
Unaudited |
Unaudited |
Net sales |
1,917,965 |
|
1,788,484 |
|
3,789,724 |
|
3,654,719 |
|
Cost of sales |
(1,342,819 |
) |
(1,226,557 |
) |
(2,614,618 |
) |
(2,532,063 |
) |
Gross profit |
575,146 |
|
561,927 |
|
1,175,106 |
|
1,122,656 |
|
Selling, general and administrative expenses |
(338,608 |
) |
(337,574 |
) |
(683,974 |
) |
(687,208 |
) |
Other operating income
(expense), net |
(2,050 |
) |
(1,917 |
) |
2,372 |
|
(815 |
) |
Operating income |
234,488 |
|
222,436 |
|
493,504 |
|
434,633 |
|
Finance Income |
12,736 |
|
9,609 |
|
23,197 |
|
18,982 |
|
Finance Cost |
(11,287 |
) |
(10,422 |
) |
(18,269 |
) |
(20,596 |
) |
Other financial results |
(7,585 |
) |
39,383 |
|
13,330 |
|
32,317 |
|
Income before equity in earnings of non-consolidated
companies and income tax |
228,352 |
|
261,006 |
|
511,762 |
|
465,336 |
|
Equity in earnings of non-consolidated companies |
26,289 |
|
40,920 |
|
55,424 |
|
86,946 |
|
Income before income tax |
254,641 |
|
301,926 |
|
567,186 |
|
552,282 |
|
Income tax |
(14,942 |
) |
(135,454 |
) |
(84,898 |
) |
(150,576 |
) |
Income for the period |
239,699 |
|
166,472 |
|
482,288 |
|
401,706 |
|
|
|
|
|
|
Attributable to: |
|
|
|
|
Owners of the parent |
241,486 |
|
168,328 |
|
484,365 |
|
403,311 |
|
Non-controlling interests |
(1,787 |
) |
(1,856 |
) |
(2,077 |
) |
(1,605 |
) |
|
239,699 |
|
166,472 |
|
482,288 |
|
401,706 |
|
|
|
|
|
|
|
|
|
|
Consolidated Condensed Interim Statement of Financial
Position
(all amounts in thousands of
U.S. dollars) |
At June 30, 2019 |
|
At December 31, 2018 |
|
Unaudited |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
6,173,577 |
|
|
|
|
6,063,908 |
|
|
|
Intangible assets, net |
1,575,561 |
|
|
|
|
1,465,965 |
|
|
|
Right-of-use assets, net |
230,084 |
|
|
|
|
- |
|
|
|
Investments in non-consolidated companies |
862,905 |
|
|
|
|
805,568 |
|
|
|
Other investments |
26,941 |
|
|
|
|
118,155 |
|
|
|
Deferred tax assets |
205,806 |
|
|
|
|
181,606 |
|
|
|
Receivables, net |
156,173 |
|
9,231,047 |
|
|
151,905 |
|
8,787,107 |
|
Current assets |
|
|
|
|
|
|
|
|
|
Inventories, net |
2,432,657 |
|
|
|
|
2,524,341 |
|
|
|
Receivables and prepayments, net |
133,878 |
|
|
|
|
155,885 |
|
|
|
Current tax assets |
125,412 |
|
|
|
|
121,332 |
|
|
|
Trade receivables, net |
1,481,076 |
|
|
|
|
1,737,366 |
|
|
|
Derivative financial instruments |
16,696 |
|
|
|
|
9,173 |
|
|
|
Other investments |
360,694 |
|
|
|
|
487,734 |
|
|
|
Cash and cash equivalents |
1,201,987 |
|
5,752,400 |
|
|
428,361 |
|
5,464,192 |
|
Total assets |
|
|
14,983,447 |
|
|
|
|
14,251,299 |
|
EQUITY |
|
|
|
|
|
|
|
|
|
Capital and reserves attributable to owners of the parent |
|
|
11,941,498 |
|
|
|
|
11,782,882 |
|
Non-controlling interests |
|
|
208,698 |
|
|
|
|
92,610 |
|
Total equity |
|
|
12,150,196 |
|
|
|
|
11,875,492 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
|
|
Borrowings |
49,375 |
|
|
|
|
29,187 |
|
|
|
Lease liabilities |
193,057 |
|
|
|
|
- |
|
|
|
Deferred tax liabilities |
355,302 |
|
|
|
|
379,039 |
|
|
|
Other liabilities |
240,749 |
|
|
|
|
213,129 |
|
|
|
Provisions |
37,828 |
|
876,311 |
|
|
36,089 |
|
657,444 |
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Borrowings |
844,926 |
|
|
|
|
509,820 |
|
|
|
Lease liabilities |
34,431 |
|
|
|
|
- |
|
|
|
Derivative financial instruments |
1,960 |
|
|
|
|
11,978 |
|
|
|
Current tax liabilities |
121,101 |
|
|
|
|
250,233 |
|
|
|
Other liabilities |
241,704 |
|
|
|
|
165,693 |
|
|
|
Provisions |
32,023 |
|
|
|
|
24,283 |
|
|
|
Customer advances |
44,075 |
|
|
|
|
62,683 |
|
|
|
Trade payables |
636,720 |
|
1,956,940 |
|
|
693,673 |
|
1,718,363 |
|
Total liabilities |
|
|
2,833,251 |
|
|
|
|
2,375,807 |
|
Total equity and liabilities |
|
|
14,983,447 |
|
|
|
|
14,251,299 |
|
|
|
|
|
|
|
|
|
|
|
Consolidated Condensed Interim Statement of Cash
Flows
|
|
Three-month period endedJune 30, |
Six-month period endedJune 30, |
(all amounts in thousands of U.S. dollars) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Cash flows from operating activities |
|
Unaudited |
Unaudited |
|
|
|
|
|
|
Income for the period |
|
239,699 |
|
166,472 |
|
482,288 |
|
401,706 |
|
Adjustments for: |
|
|
|
|
|
Depreciation and amortization |
|
135,220 |
|
140,401 |
|
266,555 |
|
282,203 |
|
Income tax accruals less payments |
|
(164,370 |
) |
92,667 |
|
(154,419 |
) |
67,851 |
|
Equity in earnings of non-consolidated companies |
|
(26,289 |
) |
(40,920 |
) |
(55,424 |
) |
(86,946 |
) |
Interest accruals less payments, net |
|
(855 |
) |
6,155 |
|
(295 |
) |
6,775 |
|
Changes in provisions |
|
2,844 |
|
(7,148 |
) |
974 |
|
(5,621 |
) |
Changes in working capital |
|
146,556 |
|
(28,220 |
) |
346,045 |
|
(357,655 |
) |
Currency translation adjustment and others |
|
9,496 |
|
21,835 |
|
4,193 |
|
13,362 |
|
Net cash provided by operating activities |
|
342,301 |
|
351,242 |
|
889,917 |
|
321,675 |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Capital expenditures |
|
(97,378 |
) |
(103,793 |
) |
(183,064 |
) |
(195,731 |
) |
Changes in advance to suppliers of property, plant and
equipment |
|
1,535 |
|
4,632 |
|
2,036 |
|
4,218 |
|
Acquisition of subsidiaries, net of cash acquired |
|
- |
|
- |
|
(132,845 |
) |
- |
|
Loan to non-consolidated companies |
|
- |
|
(1,320 |
) |
- |
|
(3,520 |
) |
Repayment of loan by non-consolidated companies |
|
- |
|
3,520 |
|
40,470 |
|
5,470 |
|
Proceeds from disposal of property, plant and equipment and
intangible assets |
|
474 |
|
1,224 |
|
736 |
|
2,708 |
|
Dividends received from
non-consolidated companies |
|
28,974 |
|
25,722 |
|
28,974 |
|
25,722 |
|
Changes in investments in securities |
|
163,129 |
|
311,462 |
|
229,906 |
|
396,078 |
|
Net cash (used in) provided by investing
activities |
|
96,734 |
|
241,447 |
|
(13,787 |
) |
234,945 |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Dividends paid |
|
(330,550 |
) |
(330,550 |
) |
(330,550 |
) |
(330,550 |
) |
Dividends paid to
non-controlling interest in subsidiaries |
|
(672 |
) |
(1,108 |
) |
(672 |
) |
(1,108 |
) |
Changes in non-controlling
interests |
|
- |
|
(1 |
) |
1 |
|
(1 |
) |
Payments of lease
liabilities |
|
(9,276 |
) |
- |
|
(19,447 |
) |
- |
|
Proceeds from borrowings |
|
460,320 |
|
298,296 |
|
644,716 |
|
576,007 |
|
Repayments of borrowings |
|
(274,042 |
) |
(448,811 |
) |
(413,094 |
) |
(696,852 |
) |
Net cash (used in) financing activities |
|
(154,220 |
) |
(482,174 |
) |
(119,046 |
) |
(452,504 |
) |
|
|
|
|
|
|
Increase in cash and cash equivalents |
|
284,815 |
|
110,515 |
|
757,084 |
|
104,116 |
|
Movement in cash and cash equivalents |
|
|
|
|
|
At the beginning of the
period |
|
897,502 |
|
324,741 |
|
426,717 |
|
330,090 |
|
Effect of exchange rate
changes |
|
700 |
|
(8,000 |
) |
(784 |
) |
(6,950 |
) |
Increase in cash and cash
equivalents |
|
284,815 |
|
110,515 |
|
757,084 |
|
104,116 |
|
At June 30, |
|
1,183,017 |
|
427,256 |
|
1,183,017 |
|
427,256 |
|
|
|
|
|
|
|
|
|
|
|
Exhibit I – Alternative performance
measures
EBITDA, Earnings before interest, tax, depreciation and
amortization.
EBITDA provides an analysis of the operating
results excluding depreciation and amortization and impairments, as
they are non-cash variables which can vary substantially from
company to company depending on accounting policies and the
accounting value of the assets. EBITDA is an approximation to
pre-tax operating cash flow and reflects cash generation before
working capital variation. EBITDA is widely used by investors when
evaluating businesses (multiples valuation), as well as by rating
agencies and creditors to evaluate the level of debt, comparing
EBITDA with net debt.
EBITDA is calculated in the following manner:
EBITDA= Operating results + Depreciation and amortization +
Impairment charges/(reversals).
|
Three-month period endedJune 30, |
Six-month period endedJune 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Operating income |
234,488 |
|
222,436 |
|
493,504 |
|
434,633 |
|
Depreciation and
amortization |
135,220 |
|
140,401 |
|
266,555 |
|
282,203 |
|
EBITDA |
369,708 |
|
362,837 |
|
760,059 |
|
716,836 |
|
Free Cash Flow
Free cash flow is a measure of financial
performance, calculated as operating cash flow less capital
expenditures. FCF represents the cash that a company is able to
generate after spending the money required to maintain or expand
its asset base.
Free cash flow is calculated in the following
manner:
Free cash flow = Net cash (used in) provided by
operating activities - Capital expenditures.
(all
amounts in thousands of U.S. dollars) |
Three-month period endedJune 30, |
Six-month period endedJune 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Net cash provided by (used in)
operating activities |
342,301 |
|
351,242 |
|
889,917 |
|
321,675 |
|
Capital expenditures |
(97,378 |
) |
(103,793 |
) |
(183,064 |
) |
(195,731 |
) |
Free cash flow |
244,923 |
|
247,449 |
|
706,853 |
|
125,944 |
|
Net Cash / (Debt)
This is the net balance of cash and cash
equivalents, other current investments and fixed income investments
held to maturity less total borrowings. It provides a summary of
the financial solvency and liquidity of the company. Net cash /
(debt) is widely used by investors and rating agencies and
creditors to assess the company’s leverage, financial strength,
flexibility and risks.
Net cash/ debt is calculated in the following manner:
Net cash= Cash and cash equivalents + Other investments (Current
and Non-Current)+/- Derivatives hedging borrowings and investments–
Borrowings (Current and Non-Current).
(all
amounts in thousands of U.S. dollars) |
At June 30, |
|
2019 |
|
2018 |
|
Cash and cash equivalents |
1,201,987 |
|
427,960 |
|
Other current investments |
360,694 |
|
730,240 |
|
Non-current Investments |
22,800 |
|
192,613 |
|
Derivatives hedging borrowings and investments |
15,051 |
|
(87,806 |
) |
Borrowings – current and non-current |
(894,301 |
) |
(840,495 |
) |
Net cash / (debt) |
706,231 |
|
422,512 |
|
|
|
|
|
|
Giovanni Sardagna
Tenaris1-888-300-5432www.tenaris.com
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