Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) (“Tenaris”)
today announced its results for the quarter and nine months ended
September 30, 2021 with comparison to its results for the quarter
and nine months ended September 30, 2020.
Summary of 2021 Third Quarter Results
(Comparison with second quarter of 2021 and third quarter of
2020)
|
3Q 2021 |
2Q 2021 |
3Q 2020 |
Net sales ($ million) |
1,754 |
|
1,529 |
|
15 |
% |
1,013 |
|
73 |
% |
Operating income (loss) ($ million) |
231 |
|
152 |
|
52 |
% |
(70 |
) |
|
Net income (loss) ($ million) |
326 |
|
290 |
|
12 |
% |
(36 |
) |
|
Shareholders’ net income (loss) ($ million) |
330 |
|
294 |
|
12 |
% |
(33 |
) |
|
Earnings (losses) per ADS ($) |
0.56 |
|
0.50 |
|
12 |
% |
(0.06 |
) |
|
Earnings (losses) per share ($) |
0.28 |
|
0.25 |
|
12 |
% |
(0.03 |
) |
|
EBITDA ($ million) |
379 |
|
301 |
|
26 |
% |
107 |
|
254 |
% |
EBITDA margin (% of net sales) |
21.6 |
% |
19.7 |
% |
|
10.6 |
% |
|
Our sales in the third quarter rose by a further
15% sequentially, led by North and South America, even as sales in
the Middle East continue to be affected by destocking and those in
Europe by seasonal factors. Our EBITDA margin rose above 20%
following an increase in average selling prices while the increase
in cost of sales was contained, despite higher raw materials and
energy costs, by an improved industrial performance and higher
absorption of fixed costs.
With the continuing ramp up of operations at our
industrial facilities in the United States, including the reopening
of our Ambridge, PA, seamless pipe mill and our Baytown, TX, heat
treatment and finishing facilities, and higher activity levels,
working capital during the quarter increased by $276 million. Cash
provided by operating activities totaled $53 million and with
capital expenditures of $74 million during the quarter, our free
cash flow was slightly negative and our net cash position at
September 30, 2021 declined to $830 million compared to $854
million in the previous quarter.
Interim Dividend Payment
Our board of directors approved the payment of
an interim dividend of $0.13 per share ($0.26 per ADS), or
approximately $153 million. The payment date will be November 24,
2021 , with an ex-dividend date on November 22, 2021 and record
date on November 23, 2021.
Termination of NKKTubes joint venture
On November 2, 2021, Tenaris reached a
preliminary agreement with JFE Holdings Inc. (“JFE”) to terminate
the joint venture for the operation of the seamless pipe
manufacturing facility in Kawasaki, Japan.
The facility, located in the Keihin steel
complex owned by JFE, has been operated by NKKTubes, a company
owned 51% by Tenaris and 49% by JFE, since 2000. NKKTubes has been
dependent on JFE’s Keihin steel complex for the supply of raw
materials, energy and other essential services.
On March 27, 2020, JFE had informed Tenaris of
its decision to permanently cease as from JFE’s fiscal year ending
March 2024 the operations of its steel manufacturing facilities
located at the Keihin complex. In light of that development,
Tenaris and JFE engaged in discussions and ultimately determined
that the project was no longer economically sustainable and,
accordingly, amicably agreed to terminate their joint venture and
liquidate NKKTubes.
The parties have agreed to cease NKKTubes’
manufacturing operations by the end of June 2022 and to dissolve
the company by the end of December 2022.
Tenaris and JFE highly recognize the
contribution of NKKTubes’ employees. The parties are committed to
work in good faith to provide adequate communication and support
under the present circumstances.
Tenaris and JFE are also committed to ensure the
supply of tubular material, including 13 Chrome alloy products, to
NKKTubes’ international customers after its closure. In addition,
JFE will support NKKTubes’ domestic customers according to
customers’ needs.
Tenaris and JFE will also engage in an open
dialogue with suppliers, local community groups and governmental
entities affected by the NKKTubes dissolution.
Tenaris and JFE intend to continue discussing
cooperatively with respect to other aspects of the dissolution of
the joint venture, with a view towards reaching a definitive
agreement prior to June 2022.
For information on the accounting impact of the
NKKTubes termination, see note 23 Subsequent events to the
consolidated condensed interim financial statements as of September
30, 2021.
Market Background and Outlook
The strength of the global economic rebound so
far this year and lower levels of investment in the energy sector
over the past years have resulted in a tighter energy market. As
OPEC+ countries continue to contain production levels and large,
publicly listed US shale producers restrain capital spending,
global oil inventories have declined below 5-year average levels
and are supportive of high prices.
Drilling activity in the U.S. and Canada
continues to increase led by private operators and further gradual
increases are likely in the coming months. In Latin America,
drilling activity has shown a recovery this year, with higher
activity in the Vaca Muerta shale in Argentina and in Colombia as
well as the offshore regions of Brazil, Mexico and Guyana. In the
Eastern Hemisphere, drilling activity is now recovering gradually
and this recovery should extend further in the coming months though
demand for OCTG will continue to be tempered by ongoing destocking
in key Middle East markets.
We anticipate that sales will show a further
increase in the fourth quarter, again led by North America, where
the market has absorbed excess OCTG inventories and prices are
increasing. Our EBITDA margin in the fourth quarter should remain
close to the current level as price increases compensate for raw
material, energy and logistic cost increases.
On October 27, 2021, in response to a petition
from U.S. Steel Tubular Products, a small number of other U.S.
domestic welded OCTG producers, and a steelworkers’ union, the U.S.
Department of Commerce (DOC) initiated anti-dumping duty
investigations on OCTG imports from Mexico, Argentina and Russia
and countervailing duty investigations on OCTG imports from Russia
and South Korea. The International Trade Commission (ITC) is
required to make a preliminary determination of injury. In case of
a negative ITC determination, the investigations will be
terminated. Otherwise, the investigations will proceed until the
DOC and the ITC make final determinations. Tenaris, which imports
OCTG from Argentina and Mexico to complement its production in the
United States, believes that the petition is unjustified and
intends to vigorously challenge any claim that its imports are
causing or threatening injury to the U.S. domestic OCTG industry.
At this time, Tenaris cannot predict the outcome of this matter or
estimate the potential impact, if any, that the resolution of this
matter may have on Tenaris’s business. Over the past 15 years,
Tenaris has realized substantial investments, more than any other
company, in acquisitions and new production to build up a
competitive OCTG production system in the United States; we believe
we are well placed to continue serving our customers even in case
of an adverse resolution of the matter.Analysis of 2021
Third 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) |
3Q 2021 |
2Q 2021 |
3Q 2020 |
Seamless |
675 |
611 |
10 |
% |
383 |
76 |
% |
Welded |
71 |
79 |
(10 |
%) |
99 |
(28 |
%) |
Total |
746 |
690 |
8 |
% |
482 |
55 |
% |
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 |
3Q 2021 |
2Q 2021 |
3Q 2020 |
(Net sales - $ million) |
|
|
|
|
|
North America |
901 |
|
706 |
|
28 |
% |
353 |
|
155 |
% |
South America |
314 |
|
230 |
|
37 |
% |
131 |
|
140 |
% |
Europe |
141 |
|
170 |
|
(17 |
%) |
126 |
|
12 |
% |
Middle East & Africa |
199 |
|
228 |
|
(13 |
%) |
262 |
|
(24 |
%) |
Asia Pacific |
52 |
|
62 |
|
(17 |
%) |
75 |
|
(31 |
%) |
Total net sales ($ million) |
1,607 |
|
1,397 |
|
15 |
% |
946 |
|
70 |
% |
Operating income (loss) ($ million) |
200 |
|
130 |
|
53 |
% |
(66 |
) |
402 |
% |
Operating margin (% of sales) |
12.4 |
% |
9.3 |
% |
|
(6.9 |
%) |
|
Net sales of tubular products and services
increased 15% sequentially and 70% year on year. The sequential
increase reflects an 8% increase in volumes and a 6% increase in
average selling prices mainly driven by higher prices on our sales
in the Americas. In North America our sales increased mainly due to
higher sales of OCTG products in the United States and Canada and
higher sales of OCTG and line pipe in Mexico. In South America,
sales increased mainly due to higher sales of OCTG products in
Argentina, Colombia and Guyana. In Europe sales declined reflecting
lower sequential sales in the North Sea, following a strong second
quarter, and seasonally lower sales of line pipe products to
distributors. In the Middle East and Africa sales declined,
reflecting ongoing destocking in the region and lower shipments of
high value products to Qatar. In Asia Pacific, our sales declined
mainly due to lower OCTG sales in China and lower sales of line
pipe products in Indonesia.
Operating result from tubular products and
services, increased to a gain of $200 million in the third quarter
of 2021, compared to a gain of $130 million in the previous quarter
and a loss of $66 million in the third quarter of 2020. Operating
results for our Tubes segment included severance charges of $7
million in the quarter, $8 million in the previous quarter and $27
million in the third quarter of 2020. During the quarter operating
margin increased following a 6% increase in average selling prices
while cost of sales increased only slightly as higher raw materials
and energy costs were offset by a better industrial performance and
absorption of fixed costs. SG&A as a percentage of sales also
declined sequentially.
Others
The following table indicates, for our Others
business segment, net sales, operating income and operating income
as a percentage of net sales for the periods indicated below:
Others |
3Q 2021 |
2Q 2021 |
3Q 2020 |
Net sales ($ million) |
147 |
|
132 |
|
11 |
% |
66 |
|
121 |
% |
Operating income (loss) ($ million) |
31 |
|
21 |
|
47 |
% |
(5 |
) |
|
Operating margin (% of sales) |
21.4 |
% |
16.3 |
% |
|
(6.9 |
%) |
|
Net sales of other products and services
increased 11% sequentially and 121% year on year. The sequential
increase in sales and in operating income was mainly related to the
new oil services business in Argentina, sucker rods and industrial
equipment in Brazil.
Selling, general and administrative
expenses, or SG&A, amounted to $317 million, or 18.1%
of net sales in the third quarter of 2021, compared to $297
million, 19.4% in the previous quarter and $234 million, 23.1% in
the third quarter of 2020. SG&A expenses during the quarter
included $3 million of leaving indemnities compared to $6 million
in the previous quarter and $9 million in the third quarter of
2020. While SG&A expenses increased sequentially, mainly due to
higher selling expenses (freights and commissions), provisions for
contingencies and taxes, partially offset by lower labor costs,
they declined as a percentage of sales.
Other operating results
amounted to a gain of $8 million in the third quarter of 2021,
compared to $34 million in the previous quarter and $7 million in
the third quarter of 2020. The result of the quarter mainly
includes the gain from the sale of fixed assets in Saudi Arabia,
while in the previous quarter we had a $33 million gain from the
recognition of fiscal credits in Brazil.
Financial results were close to
zero in the third quarter of 2021, compared to a gain of $10
million in the previous quarter and a loss of $15 million in the
third quarter of 2020. The result of the quarter corresponds mainly
to a net interest expense of $1.3 million, partially offset by a
net FX gain and other financial results of $1 million.
Equity in earnings of non-consolidated
companies generated a gain of $154 million in the third
quarter of 2021, compared to $146 million in the previous quarter
and $21 million in the third quarter of 2020. These results are
mainly derived from our equity investment in Ternium (NYSE:TX) and
Usiminas, and reflect the good dynamics in the flat steel sector
derived from record high steel prices.
Income tax charge amounted to
$59 million in the third quarter of 2021, compared to $17 million
in the previous quarter and a $28 million gain in the third quarter
of 2020. Taxes increased during the quarter due to the better
results at several subsidiaries following the improvement in
activity.
Cash Flow and Liquidity of 2021 Third
Quarter
Net cash provided by operating activities during
the third quarter of 2021 was $53 million, compared to a use of $50
million in the previous quarter and a cash generation of $417
million in the third quarter of 2020. During the third quarter of
2021 cash used in working capital amounted to $276 million.
With capital expenditures of $74 million, we had
a negative free cash flow of $21 million during the quarter. Our
net cash position amounted to $830 million at September 30, 2021,
from $854 million at June 30, 2021.
Analysis of 2021 First Nine Months Results
|
9M 2021 |
9M 2020 |
Increase/(Decrease) |
Net sales ($ million) |
4,464 |
|
4,016 |
|
11 |
% |
Operating income (loss) ($ million) |
434 |
|
(670 |
) |
|
Net income (loss) ($ million) |
717 |
|
(752 |
) |
|
Shareholders’ net income (loss) ($ million) |
730 |
|
(741 |
) |
|
Earnings (losses) per ADS ($) |
1.24 |
|
(1.26 |
) |
|
Earnings (losses) per share ($) |
0.62 |
|
(0.63 |
) |
|
EBITDA ($ million) |
877 |
|
446 |
|
97 |
% |
EBITDA margin (% of net sales) |
19.6 |
% |
11.1 |
% |
|
The following table shows our net sales by business segment for
the periods indicated below:
Net sales ($ million) |
9M 2021 |
|
9M 2020 |
|
Increase/(Decrease) |
Tubes |
4,084 |
91 |
% |
3,794 |
94 |
% |
8 |
% |
Others |
380 |
9 |
% |
222 |
6 |
% |
71 |
% |
Total |
4,464 |
|
4,016 |
|
11 |
% |
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) |
9M 2021 |
9M 2020 |
Increase/(Decrease) |
Seamless |
1,782 |
1,495 |
19 |
% |
Welded |
221 |
377 |
(41 |
%) |
Total |
2,003 |
1,871 |
7 |
% |
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 |
9M 2021 |
9M 2020 |
Increase/(Decrease) |
(Net sales - $ million) |
|
|
|
North America |
2,122 |
|
1,717 |
|
24 |
% |
South America |
710 |
|
501 |
|
42 |
% |
Europe |
454 |
|
429 |
|
6 |
% |
Middle East & Africa |
623 |
|
900 |
|
(31 |
%) |
Asia Pacific |
174 |
|
247 |
|
(30 |
%) |
Total net sales ($ million) |
4,084 |
|
3,794 |
|
8 |
% |
Operating income (loss) ($ million) |
368 |
|
(619 |
) |
159 |
% |
Operating margin (% of sales) |
9.0 |
% |
(16.3 |
%) |
|
Net sales of tubular products and services
increased 8% to $4,084 million in the first nine months of 2021,
compared to $3,794 million in the first nine months of 2020 due to
an increase in volumes of 7% and a 1% increase in average selling
prices. Sales increased in the Americas and Europe while they
decreased in the Eastern Hemisphere. Average drilling activity in
the United States and Canada remained stable, while internationally
it declined 16% compared to the first nine months of 2020.
Operating results from tubular products and
services amounted to a gain of $368 million in the first nine
months of 2021 compared to a loss of $619 million in the first nine
months of 2020. Tubes operating results in the first nine months of
2020 were affected by $102 million of severance charges and by an
impairment charge of $582 million, while severance charges amounted
to $20 million in the first nine months of 2021. Additionally,
during 2021 we benefited from a $34 million gain from the
recognition of fiscal credits in Brazil, partially offset by $23
million higher costs associated to the winter storm Uri. In the
year to date 2021 our operating income improved thanks to the
increase in sales and a better industrial performance due to the
increased levels of activity and utilization of production
capacity.
Others
The following table indicates, for our Others
business segment, net sales, operating income and operating income
as a percentage of net sales for the periods indicated below:
Others |
9M 2021 |
9M 2020 |
Increase/(Decrease) |
Net sales ($ million) |
380 |
|
222 |
|
71 |
% |
Operating income (loss) ($ million) |
66 |
|
(51 |
) |
229 |
% |
Operating margin (% of sales) |
17.4 |
% |
(23.1 |
%) |
|
Net sales of other products and services
increased 71% to $380 million in the first nine months of 2021,
compared to $222 million in the first nine months of 2020. The
increase in sales and profitability, are mainly due to higher sales
from our new oil services business in Argentina which offers
hydraulic fracturing and coiled tubing services, higher sales of
excess raw materials and energy, sucker rods, industrial equipment
in Brazil and pipes for plumbing applications in Italy.
SG&A amounted to $869
million in the first nine months of 2021, representing 19.5% of
sales, and $877 million in the first nine months of 2020,
representing 21.8% of sales. During the first nine months of 2020
SG&A includes $45 million of leaving indemnities, while in the
first nine months of 2021 it includes $12 million. In the first
nine months of 2021 selling expenses (freights and commissions),
increased following the increase in sales, partially offset by
lower labor costs and amortization of intangible assets.
Other operating results
amounted to a gain of $50 million in the first nine months of 2021,
compared to a gain of $5 million in the first nine months of 2020.
The gain in 2021 is mainly due to a $34 million recognition of
fiscal credits in Brazil and the profit from the sale of fixed
assets in Saudi Arabia.
Financial results amounted to a
gain of $21 million in the first nine months of 2021 compared to a
loss of $51 million in the same period of 2020. The $15 million net
finance income in the first nine months of 2021 includes a $17
million gain attributable to interests from fiscal credits in
Brazil. Additionally, in the first nine months of 2021 we had a $6
million foreign exchange gain net of foreign exchange-derivative
results, which is mainly related to the Euro depreciation on Euro
denominated intercompany liabilities in subsidiaries with
functional currency U.S. dollar and the Argentine peso devaluation
against the U.S. dollar on our Argentine peso-denominated
borrowings and liabilities.
Equity in earnings of non-consolidated
companies generated a gain of $379 million in the first
nine months of 2021, compared to a gain of $27 million in the first
nine months of 2020. These results are mainly derived from our
participation in Ternium (NYSE:TX) and Usiminas, and currently
reflects the good dynamics in the flat steel sector derived from
record high steel prices.
Income tax amounted to a charge
of $117 million in the first nine months of 2021, compared to $58
million in the first nine months of 2020, reflecting better results
in several subsidiaries following the increase in activity.
Cash Flow and Liquidity of 2021 First Nine
Months
Net cash provided by operations during the first
nine months of 2021 was $73 million (net of $673 million used in
working capital), compared to $1,381 million (including $1,097
million working capital reduction) in the same period of 2020.
With capital expenditures of $171 million, we
had a negative free cash flow of $98 million during the first nine
months of 2021, compared to a positive free cash flow of $1,226
million in the first nine months of 2020.
Our net cash position amounted to $830 million
at September 30, 2021, from $1.1 billion at December 31, 2020.
Conference call
Tenaris will hold a conference call to discuss
the above reported results, on November 4, 2021, at 11:00 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 “6094263”. Please dial in 10
minutes before the scheduled start time. The conference call will
be also available by webcast at
ir.tenaris.com/events-and-presentations.
A replay of the conference call will be
available on our webpage http://ir.tenaris.com/ or by phone from
2.00 pm ET on November 4 through 1:00 pm ET on November 12, 2021.
To access the replay by phone, please dial +1 855 859 2056 or +1
404 537 3406 and enter passcode “6094263” 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.
Press releases and financial statements can be
downloaded from Tenaris’s website at http://ir.tenaris.com/
Consolidated Condensed Interim Income
Statement
(all amounts in thousands of U.S. dollars) |
Three-month period endedSeptember 30, |
Nine-month period endedSeptember 30, |
|
2021 |
2020 |
2021 |
2020 |
Continuing operations |
Unaudited |
Unaudited |
Net sales |
1,753,743 |
|
1,012,750 |
|
4,464,043 |
|
4,016,106 |
|
Cost of sales |
(1,214,451 |
) |
(855,873 |
) |
(3,211,232 |
) |
(3,191,860 |
) |
Gross profit |
539,292 |
|
156,877 |
|
1,252,811 |
|
824,246 |
|
Selling, general and administrative expenses |
(316,708 |
) |
(234,081 |
) |
(868,519 |
) |
(877,090 |
) |
Impairment Charge |
- |
|
- |
|
- |
|
(622,402 |
) |
Other operating income (expense), net |
8,325 |
|
6,888 |
|
49,902 |
|
4,790 |
|
Operating income (loss) |
230,909 |
|
(70,316 |
) |
434,194 |
|
(670,456 |
) |
Finance Income |
4,988 |
|
4,904 |
|
32,203 |
|
10,573 |
|
Finance Cost |
(6,320 |
) |
(6,567 |
) |
(16,826 |
) |
(22,427 |
) |
Other financial results |
1,024 |
|
(13,377 |
) |
5,704 |
|
(39,013 |
) |
Income (loss) before equity in earnings of non-consolidated
companies and income tax |
230,601 |
|
(85,356 |
) |
455,275 |
|
(721,323 |
) |
Equity in earnings of non-consolidated companies |
154,139 |
|
21,144 |
|
379,109 |
|
27,439 |
|
Income (loss) before income tax |
384,740 |
|
(64,212 |
) |
834,384 |
|
(693,884 |
) |
Income tax |
(58,505 |
) |
28,328 |
|
(117,202 |
) |
(58,039 |
) |
Income (loss) for the period |
326,235 |
|
(35,884 |
) |
717,182 |
|
(751,923 |
) |
|
|
|
|
|
Attributable to: |
|
|
|
|
Owners of the parent |
329,871 |
|
(32,946 |
) |
730,157 |
|
(740,975 |
) |
Non-controlling interests |
(3,636 |
) |
(2,938 |
) |
(12,975 |
) |
(10,948 |
) |
|
326,235 |
|
(35,884 |
) |
717,182 |
|
(751,923 |
) |
Consolidated Condensed Interim Statement of Financial
Position
(all amounts in thousands of
U.S. dollars) |
At September 30, 2021 |
|
At December 31, 2020 |
|
Unaudited |
|
|
ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment, net |
5,937,710 |
|
|
6,193,181 |
|
Intangible assets, net |
1,384,798 |
|
|
1,429,056 |
|
Right-of-use assets, net |
215,177 |
|
|
241,953 |
|
Investments in non-consolidated companies |
1,277,059 |
|
|
957,352 |
|
Other investments |
377,001 |
|
|
247,082 |
|
Deferred tax assets |
253,178 |
|
|
205,590 |
|
Receivables, net |
207,782 |
9,652,705 |
|
154,303 |
9,428,517 |
Current assets |
|
|
|
|
|
Inventories, net |
2,477,445 |
|
|
1,636,673 |
|
Receivables and prepayments, net |
119,222 |
|
|
77,849 |
|
Current tax assets |
180,556 |
|
|
136,384 |
|
Trade receivables, net |
1,111,174 |
|
|
968,148 |
|
Derivative financial instruments |
7,612 |
|
|
11,449 |
|
Other investments |
457,861 |
|
|
872,488 |
|
Cash and cash equivalents |
513,781 |
|
|
584,681 |
|
Assets held for sale |
19,858 |
4,887,509 |
|
- |
4,287,672 |
Total assets |
|
14,540,214 |
|
|
13,716,189 |
EQUITY |
|
|
|
|
|
Capital and reserves attributable to owners of the parent |
|
11,763,480 |
|
|
11,262,888 |
Non-controlling interests |
|
178,729 |
|
|
183,585 |
Total equity |
|
11,942,209 |
|
|
11,446,473 |
LIABILITIES |
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Borrowings |
111,442 |
|
|
315,739 |
|
Lease liabilities |
180,702 |
|
|
213,848 |
|
Deferred tax liabilities |
291,067 |
|
|
254,801 |
|
Other liabilities |
241,098 |
|
|
245,635 |
|
Provisions |
85,865 |
910,174 |
|
73,218 |
1,103,241 |
Current liabilities |
|
|
|
|
|
Borrowings |
402,237 |
|
|
303,268 |
|
Lease liabilities |
39,417 |
|
|
43,495 |
|
Derivative financial instruments |
5,613 |
|
|
3,217 |
|
Current tax liabilities |
106,502 |
|
|
90,593 |
|
Other liabilities |
266,742 |
|
|
202,826 |
|
Provisions |
13,848 |
|
|
12,279 |
|
Customer advances |
56,738 |
|
|
48,692 |
|
Trade payables |
791,424 |
|
|
462,105 |
|
Liabilities held for sale |
5,310 |
1,687,831 |
|
- |
1,166,475 |
Total liabilities |
|
2,598,005 |
|
|
2,269,716 |
Total equity and liabilities |
|
14,540,214 |
|
|
13,716,189 |
Consolidated Condensed Interim Statement of Cash
Flow
|
|
Three-month period endedSeptember 30, |
Nine-month period endedSeptember 30, |
(all amounts in thousands of
U.S. dollars) |
|
2021 |
2020 |
2021 |
2020 |
Cash flows from operating activities |
|
Unaudited |
Unaudited |
|
|
|
|
|
|
Income (loss) for the period |
|
326,235 |
|
(35,884 |
) |
717,182 |
|
(751,923 |
) |
Adjustments for: |
|
|
|
|
|
Depreciation and amortization |
|
148,465 |
|
177,602 |
|
442,561 |
|
493,782 |
|
Impairment charge |
|
- |
|
- |
|
- |
|
622,402 |
|
Income tax accruals less payments |
|
12,197 |
|
(55,288 |
) |
11,630 |
|
(57,583 |
) |
Equity in earnings of non-consolidated companies |
|
(154,139 |
) |
(21,144 |
) |
(379,109 |
) |
(27,439 |
) |
Interest accruals less payments, net |
|
(490 |
) |
171 |
|
(12,537 |
) |
1,542 |
|
Changes in provisions |
|
4,618 |
|
1,798 |
|
14,216 |
|
(9,983 |
) |
Changes in working capital |
|
(275,622 |
) |
334,169 |
|
(672,712 |
) |
1,097,209 |
|
Currency translation adjustment and others |
|
(8,360 |
) |
15,848 |
|
(48,186 |
) |
12,922 |
|
Net cash provided by operating activities |
|
52,904 |
|
417,272 |
|
73,045 |
|
1,380,929 |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Capital expenditures |
|
(74,306 |
) |
(41,571 |
) |
(170,871 |
) |
(155,156 |
) |
Changes in advance to suppliers of property, plant and
equipment |
|
1,308 |
|
709 |
|
(4,420 |
) |
826 |
|
Acquisition of subsidiaries, net of cash acquired |
|
- |
|
38,481 |
|
- |
|
(1,025,367 |
) |
Proceeds from disposal of property, plant and equipment and
intangible assets |
|
9,016 |
|
10,519 |
|
14,355 |
|
11,684 |
|
Investment in companies under cost method |
|
(692 |
) |
- |
|
(692 |
) |
- |
|
Dividends received from non-consolidated companies |
|
- |
|
- |
|
49,131 |
|
278 |
|
Changes in investments in securities |
|
35,500 |
|
(307,789 |
) |
278,423 |
|
(563,228 |
) |
Net cash (used in) provided by investing
activities |
|
(29,174 |
) |
(299,651 |
) |
165,926 |
|
(1,730,963 |
) |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Dividends paid |
|
- |
|
- |
|
(165,275 |
) |
- |
|
Dividends paid to
non-controlling interest in subsidiaries |
|
(148 |
) |
- |
|
(3,355 |
) |
- |
|
Changes in non-controlling
interests |
|
- |
|
- |
|
- |
|
2 |
|
Payments of lease
liabilities |
|
(11,917 |
) |
(10,870 |
) |
(38,221 |
) |
(35,813 |
) |
Proceeds from borrowings |
|
289,579 |
|
116,104 |
|
575,698 |
|
558,352 |
|
Repayments of borrowings |
|
(370,438 |
) |
(127,031 |
) |
(674,325 |
) |
(698,153 |
) |
Net cash (used in) financing activities |
|
(92,924 |
) |
(21,797 |
) |
(305,478 |
) |
(175,612 |
) |
|
|
|
|
|
|
(Decrease) Increase in cash and cash
equivalents |
|
(69,194 |
) |
95,824 |
|
(66,507 |
) |
(525,646 |
) |
Movement in cash and cash equivalents |
|
|
|
|
|
At the beginning of the
period |
|
585,239 |
|
910,898 |
|
584,583 |
|
1,554,275 |
|
Effect of exchange rate
changes |
|
(2,380 |
) |
(2,324 |
) |
(4,411 |
) |
(24,231 |
) |
(Decrease) Increase in cash
and cash equivalents |
|
(69,194 |
) |
95,824 |
|
(66,507 |
) |
(525,646 |
) |
|
|
513,665 |
|
1,004,398 |
|
513,665 |
|
1,004,398 |
|
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).
(all amounts in thousands of U.S. dollars) |
Three-month period endedSeptember 30, |
Nine-month period endedSeptember 30, |
|
2021 |
2020 |
2021 |
2020 |
Operating income (Loss) |
230,909 |
(70,316 |
) |
434,194 |
(670,456 |
) |
Depreciation and
amortization |
148,465 |
177,602 |
|
442,561 |
493,782 |
|
Impairment |
- |
- |
|
- |
622,402 |
|
EBITDA |
379,374 |
107,286 |
|
876,755 |
445,728 |
|
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 endedSeptember 30, |
Nine-month period endedSeptember 30, |
|
2021 |
2020 |
2021 |
2020 |
Net cash provided by operating activities |
52,904 |
|
417,272 |
|
73,045 |
|
1,380,929 |
|
Capital expenditures |
(74,306 |
) |
(41,571 |
) |
(170,871 |
) |
(155,156 |
) |
Free cash
flow |
(21,402 |
) |
375,701 |
|
(97,826 |
) |
1,225,773 |
|
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, 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 September 30, |
|
2021 |
2020 |
Cash and cash equivalents |
513,781 |
|
1,005,152 |
|
Other current investments |
457,861 |
|
620,510 |
|
Non-current investments |
369,079 |
|
167,409 |
|
Derivatives hedging borrowings
and investments |
3,381 |
|
(7,673 |
) |
Current borrowings |
(402,237 |
) |
(401,374 |
) |
Non-current borrowings |
(111,442 |
) |
(304,260 |
) |
Net cash /
(debt) |
830,423 |
|
1,079,764 |
|
Giovanni SardagnaTenaris 1-888-300-5432www.tenaris.com
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