Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) (“Tenaris”)
today announced its results for the quarter ended September 30,
2022 in comparison with its results for the quarter ended September
30, 2021.
Summary of 2022 Third Quarter
Results
|
3Q 2022 |
2Q 2022 |
3Q 2021 |
Net sales ($ million) |
2,975 |
|
2,800 |
|
6 |
% |
1,754 |
|
70 |
% |
Operating income ($ million) |
803 |
|
663 |
|
21 |
% |
231 |
|
248 |
% |
Net income ($ million) |
608 |
|
634 |
|
(4 |
%) |
326 |
|
86 |
% |
Shareholders’ net income ($ million) |
606 |
|
637 |
|
(5 |
%) |
330 |
|
84 |
% |
Earnings per ADS ($) |
1.03 |
|
1.08 |
|
(5 |
%) |
0.56 |
|
84 |
% |
Earnings per share ($) |
0.51 |
|
0.54 |
|
(5 |
%) |
0.28 |
|
84 |
% |
EBITDA ($ million) |
946 |
|
806 |
|
17 |
% |
379 |
|
149 |
% |
EBITDA margin (% of net sales) |
31.8 |
% |
28.8 |
% |
|
21.6 |
% |
|
Our third quarter sales increased 6%
sequentially as further pricing gains more than compensated lower
shipments, which were affected by lower deliveries to pipeline
projects and seasonal factors. Our EBITDA increased a further 17%
sequentially with the margin rising above 30% following the
increase in average selling prices which offset the increase in
costs of raw materials and energy. Net income decreased 4%
sequentially affected by non-operating items: lower results from
our equity participation in non-consolidated companies (Ternium and
Usiminas) and higher financial expenses.
Our free cash flow for the quarter remained
positive at $113 million despite an increase in working capital of
$601 million related to a buildup of inventories in anticipation of
increased shipments and an increase in receivables. Our capital
investments for the quarter, which included $56 million for the
wind farm in Argentina, also increased. Our net cash position
increased to $700 million at September 30, 2022.
Interim Dividend Payment
Our board of directors approved the payment of an interim
dividend of $0.17 per share ($0.34 per ADS), or approximately $201
million. The payment date will be November 23, 2022 , with an
ex-dividend date on November 21, 2022 and record date on November
22, 2022.
Market Background and
Outlook
In an environment of high geopolitical and
macro-economic risk, global economic growth is slowing, and energy
prices have come off their recent highs. Conditions in the energy
industry, however, remain supportive for an increased level of
investment, with low levels of spare capacity and inventories,
uncertainty about the impact of further sanctions on Russian
exports and a renewed focus on energy security around the world.
Global energy provision is constrained and all sources of supply
will be needed to meet growing demand.
Drilling activity has increased this year and is
expected to increase further, particularly in the Middle East and
offshore. Global demand for OCTG is increasing and is expected to
surpass pre-Covid levels in 2023. Pipeline activity is also
advancing to support oil and gas developments, notably in Argentina
and the Middle East.
In the fourth quarter, we anticipate further
growth in sales boosted by higher shipments to pipeline projects
and additional pricing gains. At the same time, our EBITDA margin
should continue to benefit from higher operating leverage while our
free cash flow should continue to recover.
US Trade Case
On October 27, 2021, the U.S. Department of
Commerce (“DOC”) announced the initiation of antidumping duty
investigations of oil country tubular goods (“OCTG”) from
Argentina, Mexico, and Russia and countervailing duty
investigations of OCTG from Russia and South Korea.
On October 26, 2022, the ITC issued a final
determination that the imports under investigation caused injury to
the U.S. OCTG industry. As a result of the investigation, Tenaris
is required to pay antidumping duties (at a rate of 78.30% for
imports from Argentina and 44.93% for imports from Mexico) on its
imports of OCTG from Argentina and Mexico for five years. Tenaris
has been paying such duties since May 11, 2022, reflecting the
amount of such deposits in its production costs. The duty rates may
be reset periodically based on the results of the review
process.
Analysis of 2022 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 2022 |
2Q 2022 |
3Q 2021 |
Seamless |
750 |
815 |
(8 |
%) |
675 |
11 |
% |
Welded |
106 |
75 |
41 |
% |
71 |
49 |
% |
Total |
856 |
890 |
(4 |
%) |
746 |
15 |
% |
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 2022 |
2Q 2022 |
3Q 2021 |
(Net sales - $ million) |
|
|
|
|
|
North America |
1,761 |
|
1,583 |
|
11 |
% |
901 |
|
95 |
% |
South America |
600 |
|
462 |
|
30 |
% |
314 |
|
91 |
% |
Europe |
190 |
|
259 |
|
(27 |
%) |
141 |
|
35 |
% |
Middle East & Africa |
234 |
|
260 |
|
(10 |
%) |
199 |
|
18 |
% |
Asia Pacific |
46 |
|
67 |
|
(31 |
%) |
52 |
|
(11 |
%) |
Total net sales ($ million) |
2,832 |
|
2,632 |
|
8 |
% |
1,607 |
|
76 |
% |
Operating income ($ million) |
780 |
|
636 |
|
23 |
% |
200 |
|
290 |
% |
Operating margin (% of sales) |
27.5 |
% |
24.2 |
% |
|
12.4 |
% |
|
Net sales of tubular products and services
increased 8% sequentially and 76% year on year. On a sequential
basis volumes shipped decreased 4%, affected by lower deliveries to
pipeline projects and seasonal factors, while average selling
prices increased 12% sequentially, more than offsetting the lower
volumes. In North America, sales increased thanks to higher OCTG
prices throughout the region and higher shipments of OCTG in
Canada. In South America we had higher sales of OCTG to offshore
projects in Guyana and higher sales for pipelines in Argentina. In
Europe sales declined due to lower sales for offshore line pipe
projects and lower sales of industrial products. In the Middle East
and Africa sales declined as we had lower sales in Saudi Arabia and
lower sales of high alloy products in UAE. In Asia Pacific sales
declined reflecting the discontinuation of sales from NKKTubes in
Japan and lower sales in China.
Operating results from tubular products and
services amounted to a gain of $780 million in the third quarter of
2022 compared to a gain of $636 million in the previous quarter and
$200 million in the third quarter of 2021. Our operating margin
improved as tubes price increases more than offset higher energy
and raw material costs.
Others
The following table indicates, for our Others business segment,
net sales, operating income and operating income as a percentage of
net sales for the periods indicated below:
Others |
3Q 2022 |
2Q 2022 |
3Q 2021 |
Net sales ($ million) |
143 |
|
168 |
|
(15 |
%) |
147 |
|
(2 |
%) |
Operating income ($ million) |
23 |
|
27 |
|
(12 |
%) |
31 |
|
(26 |
%) |
Operating margin (% of sales) |
16.2 |
% |
15.8 |
% |
|
21.4 |
% |
|
Net sales of other products and services
decreased 15% sequentially and 2% year on year. Sequentially, sales
declined mainly due to lower sales of excess raw materials and
lower sales of pipes for plumbing applications in Italy.
Selling, general and administrative
expenses, or SG&A, amounted to $403
million, or 13.6% of net sales, in the third quarter of 2022,
compared to $412 million, 14.7% in the previous quarter and $317
million, 18.1% in the third quarter of 2021. Sequentially, our
SG&A expenses decreased mainly due to a reduction in logistic
costs associated with lower shipments.
Financial results amounted to a
loss of $29 million in the third quarter of 2022, compared to a
loss of $11 million in the previous quarter and a loss close to
zero in the third quarter of 2021. The financial result of the
quarter includes a $30 million loss related to a dividend
distribution in kind (Argentine sovereign bonds) paid by an
Argentine subsidiary of the Company, which was impacted by the
change in value of such bonds from the local Argentine market to
the International market. This is related to foreign exchange
control measures in Argentina, please see note 18 to our
consolidated condensed interim financial statements for the
nine-month period ended September 30, 2022.
Equity in earnings of non-consolidated
companies generated a gain of $5 million in the third
quarter of 2022, compared to a gain of $103 million in the previous
quarter and a gain of $154 million in the third quarter of 2021.
The result of the quarter includes a $32 million loss from an
impairment in Usiminas ($19 million from our direct investment in
Usiminas and $13 million from our indirect investment in Usiminas
through Ternium). Excluding the impairment loss the equity in
earnings of non-consolidated companies would have amounted to $37
million.
Income tax charge amounted to
$171 million in the third quarter of 2022, compared to $120 million
in the previous quarter and $59 million in the third quarter of
2021. The increase in income tax mainly reflects better results at
several subsidiaries following the improvement in activity.
Cash Flow and Liquidity of 2022
Third Quarter
Net cash generated by operating activities
during the third quarter of 2022 was $242 million, compared to $428
million in the previous quarter and $53 million in the third
quarter of 2021. During the third quarter of 2022 cash generated by
operating activities is net of an increase in working capital of
$601 million mainly related to a buildup of inventories in
anticipation of increased shipments and higher receivables
reflecting the increase in sales.
With capital expenditures of $129 million, which
include $56 million invested in the wind farm in Argentina, our
free cash flow amounted to $113 million during the quarter and our
net cash position amounted to $700 million at September 30,
2022.
Analysis of 2022 First Nine Months
Results
|
9M 2022 |
9M 2021 |
Increase/(Decrease) |
Net sales ($ million) |
8,142 |
|
4,464 |
|
82 |
% |
Operating income ($ million) |
1,950 |
|
434 |
|
349 |
% |
Net income ($ million) |
1,746 |
|
717 |
|
143 |
% |
Shareholders’ net income ($ million) |
1,746 |
|
730 |
|
139 |
% |
Earnings per ADS ($) |
2.96 |
|
1.24 |
|
139 |
% |
Earnings per share ($) |
1.48 |
|
0.62 |
|
139 |
% |
EBITDA ($ million) |
2,379 |
|
877 |
|
171 |
% |
EBITDA margin (% of net sales) |
29.2 |
% |
19.6 |
% |
|
The following table shows our net sales by business segment for
the periods indicated below:
Net sales ($ million) |
9M 2022 |
9M 2021 |
Increase/(Decrease) |
Tubes |
7,667 |
94 |
% |
4,084 |
91 |
% |
88 |
% |
Others |
475 |
6 |
% |
380 |
9 |
% |
25 |
% |
Total |
8,142 |
|
4,464 |
|
82 |
% |
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 2022 |
9M 2021 |
Increase/(Decrease) |
Seamless |
2,337 |
1,782 |
31 |
% |
Welded |
231 |
221 |
5 |
% |
Total |
2,568 |
2,003 |
28 |
% |
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 2022 |
9M 2021 |
Increase/(Decrease) |
(Net sales - $ million) |
|
|
|
North America |
4,691 |
|
2,122 |
|
121 |
% |
South America |
1,411 |
|
710 |
|
99 |
% |
Europe |
681 |
|
454 |
|
50 |
% |
Middle East & Africa |
676 |
|
623 |
|
9 |
% |
Asia Pacific |
207 |
|
174 |
|
19 |
% |
Total net sales ($ million) |
7,667 |
|
4,084 |
|
88 |
% |
Operating income ($ million) |
1,887 |
|
368 |
|
413 |
% |
Operating margin (% of sales) |
24.6 |
% |
9.0 |
% |
|
Net sales of tubular products and services
increased 88% to $7,667 million in the first nine months of 2022,
compared to $4,084 million in the first nine months of 2021 due to
an increase of 28% in volumes and a 46% increase in average selling
prices. Sales increased in all regions, mainly in North America
where there was a recovery in volumes and prices throughout the
region, led by the U.S. onshore market. Average drilling activity
in the first nine months of 2022 increased 54% in the United States
& Canada and 13% internationally compared to the first nine
months of 2021.
Operating results from tubular products and
services amounted to a gain of $1,887 million in the first nine
months of 2022 compared to $368 million in the first nine months of
2021. The improvement in operating results was driven by the
recovery in sales and margins, as higher tubes prices and an
improvement in industrial performance due to the increased levels
of activity and utilization of production capacity more than offset
the increase in raw material and energy costs.
Others
The following table indicates, for our Others business segment,
net sales, operating income and operating income as a percentage of
net sales for the periods indicated below:
Others |
9M 2022 |
9M 2021 |
Increase/(Decrease) |
Net sales ($ million) |
475 |
|
380 |
|
25 |
% |
Operating income ($ million) |
63 |
|
66 |
|
(5 |
%) |
Operating margin (% of sales) |
13.2 |
% |
17.4 |
% |
|
Net sales of other products and services
increased 25% to $475 million in the first nine months of 2022,
compared to $380 million in the first nine months of 2021, mainly
due to higher sales of our oilfield services business in Argentina
which offers hydraulic fracturing and coiled tubing services,
higher sales of sucker rods and excess raw materials, partially
offset by lower sales from the discontinued industrial equipment
business in Brazil.
Selling, general and administrative
expenses, or SG&A, amounted to $1,180 million in the
first nine months of 2022, representing 14.5% of sales, and $869
million in the first nine months of 2021, representing 19.5% of
sales. SG&A expenses increased mainly due to higher selling
expenses (in particular commissions and freights) associated with
higher sales and higher labor costs. However, they decreased as a
percentage of sales due to the better absorption of fixed and
semi-fixed components of SG&A expenses on higher sales.
Other operating results
amounted to a net gain of $12 million in the first nine months of
2022, compared to a net gain of $50 million in the first nine
months of 2021. In the first nine months of 2022 other operating
results include a non-cash gain of $71 million from the
reclassification to the income statement of NKKTubes’s cumulative
foreign exchange adjustments belonging to the shareholders, an $18
million gain from the sale of land in Canada after the relocation
of the Prudential facility, partially offset by a $78 million loss
from the settlement with the U.S. SEC. The gain in 2021 was 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
loss of $42 million in the first nine months of 2022, compared to a
gain of $21 million in the first nine months of 2021. The financial
result in the first nine months of 2022 includes a $30 million loss
related to a dividend distribution in kind (Argentine sovereign
bonds) performed by an Argentine subsidiary of the Company, which
was mainly impacted by the change in valuation of the bonds from
the local Argentine market to the International market, as well as
the decline in the fair value of certain financial instruments
obtained in an operation of settlement of trade receivables in the
second quarter of 2022.
Equity in earnings of non-consolidated
companies generated a gain of $196 million in the first
nine months of 2022, compared to a gain of $379 million in the
first nine months of 2021. The result of the first nine months of
2022 includes a $32 million loss from an impairment in Usiminas
($19 million from our direct investment in Usiminas and $13 million
from our indirect investment in Usiminas through Ternium) and an
impairment on the value of our joint venture in Russia, amounting
to $15 million. The remaining results are mainly derived from our
participation in Ternium (NYSE:TX).
Income tax amounted to a charge
of $359 million in the first nine months of 2022, compared to $117
million in the first nine months of 2021. The increase in income
tax reflects better results at several subsidiaries following the
improvement in activity in 2022.
Cash Flow and Liquidity of 2022
First Nine Months
Net cash provided by operating activities during
the first nine months of 2022 amounted to $643 million (net of an
increase in working capital of $1,408 million), compared to cash
provided by operations of $73 million (net of an increase in
working capital of $673 million) in the first nine months of 2021.
Working capital, mainly inventories and trade receivables, has been
increasing since 2021 following the recovery in activity from very
low levels in 2020.
Capital expenditures amounted to $271 million in
the first nine months of 2022, compared to $171 million in the
first nine months of 2021. Free cash flow amounted to $372 million
in the first nine months of 2022, compared to a negative free cash
flow of $98 million in the first nine months of 2021.
Our net cash position amounted to $700 million
at September 30, 2022, same level as at December 31, 2021.
Conference
call
Tenaris will hold a conference call to discuss
the above reported results, on November 4, 2022, at 09:00 a.m.
(Eastern Time). Following a brief summary, the conference call will
be opened to questions. To listen to the conference please join
through one of the following options:
ir.tenaris.com/events-and-presentations or
https://edge.media-server.com/mmc/p/9rkcyax4If you wish to
participate in the Q&A session please register at the following
link:
https://register.vevent.com/register/BI722f17c9bfb94b2ea67ce3682137cb5dPlease
connect 10 minutes before the scheduled start time.A replay of the
conference call will also be available on our webpage
at:ir.tenaris.com/events-and-presentations
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 ended September 30, |
Nine-month period ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
Unaudited |
Unaudited |
Net sales |
2,974,801 |
|
1,753,743 |
|
8,142,316 |
|
4,464,043 |
|
Cost of sales |
(1,766,486 |
) |
(1,214,451 |
) |
(5,023,770 |
) |
(3,211,232 |
) |
Gross profit |
1,208,315 |
|
539,292 |
|
3,118,546 |
|
1,252,811 |
|
Selling, general and administrative expenses |
(403,435 |
) |
(316,708 |
) |
(1,180,097 |
) |
(868,519 |
) |
Other operating income (expense), net |
(1,755 |
) |
8,325 |
|
11,775 |
|
49,902 |
|
Operating income |
803,125 |
|
230,909 |
|
1,950,224 |
|
434,194 |
|
Finance Income |
26,998 |
|
4,988 |
|
42,264 |
|
32,203 |
|
Finance Cost |
(17,741 |
) |
(6,320 |
) |
(25,703 |
) |
(16,826 |
) |
Other financial results |
(38,368 |
) |
1,024 |
|
(58,247 |
) |
5,704 |
|
Income before equity in earnings of non-consolidated
companies and income tax |
774,014 |
|
230,601 |
|
1,908,538 |
|
455,275 |
|
Equity in earnings of non-consolidated companies |
5,295 |
|
154,139 |
|
196,001 |
|
379,109 |
|
Income before income tax |
779,309 |
|
384,740 |
|
2,104,539 |
|
834,384 |
|
Income tax |
(171,239 |
) |
(58,505 |
) |
(359,010 |
) |
(117,202 |
) |
Income for continuing operations |
608,070 |
|
326,235 |
|
1,745,529 |
|
717,182 |
|
|
|
|
|
|
Attributable to: |
|
|
|
|
Shareholders' equity |
606,470 |
|
329,871 |
|
1,745,962 |
|
730,157 |
|
Non-controlling interests |
1,600 |
|
(3,636 |
) |
(433 |
) |
(12,975 |
) |
|
608,070 |
|
326,235 |
|
1,745,529 |
|
717,182 |
|
Consolidated Condensed Interim Statement of Financial
Position
(all amounts in thousands of
U.S. dollars) |
At September 30, 2022 |
|
At December 31, 2021 |
|
Unaudited |
|
|
ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment, net |
5,640,329 |
|
|
5,824,801 |
|
Intangible assets, net |
1,347,892 |
|
|
1,372,176 |
|
Right-of-use assets, net |
112,342 |
|
|
108,738 |
|
Investments in non-consolidated companies |
1,536,439 |
|
|
1,383,774 |
|
Other investments |
150,489 |
|
|
320,254 |
|
Derivative financial instruments |
- |
|
|
7,080 |
|
Deferred tax assets |
264,843 |
|
|
245,547 |
|
Receivables, net |
220,312 |
9,272,646 |
|
205,888 |
9,468,258 |
Current assets |
|
|
|
|
|
Inventories, net |
3,679,135 |
|
|
2,672,593 |
|
Receivables and prepayments, net |
208,287 |
|
|
96,276 |
|
Current tax assets |
212,093 |
|
|
193,021 |
|
Trade receivables, net |
2,013,660 |
|
|
1,299,072 |
|
Derivative financial instruments |
46,178 |
|
|
4,235 |
|
Other investments |
434,566 |
|
|
397,849 |
|
Cash and cash equivalents |
994,854 |
7,588,773 |
|
318,127 |
4,981,173 |
Total assets |
|
16,861,419 |
|
|
14,449,431 |
EQUITY |
|
|
|
|
|
Shareholders' equity |
|
13,204,886 |
|
|
11,960,578 |
Non-controlling interests |
|
129,895 |
|
|
145,124 |
Total equity |
|
13,334,781 |
|
|
12,105,702 |
LIABILITIES |
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Borrowings |
47,164 |
|
|
111,432 |
|
Lease liabilities |
84,922 |
|
|
82,694 |
|
Deferred tax liabilities |
284,549 |
|
|
274,721 |
|
Other liabilities |
235,309 |
|
|
231,681 |
|
Provisions |
91,318 |
743,262 |
|
83,556 |
784,084 |
Current liabilities |
|
|
|
|
|
Borrowings |
827,962 |
|
|
219,501 |
|
Lease liabilities |
31,127 |
|
|
34,591 |
|
Derivative financial instruments |
11,778 |
|
|
11,328 |
|
Current tax liabilities |
288,208 |
|
|
143,486 |
|
Other liabilities |
277,812 |
|
|
203,725 |
|
Provisions |
10,829 |
|
|
9,322 |
|
Customer advances |
324,623 |
|
|
92,436 |
|
Trade payables |
1,011,037 |
2,783,376 |
|
845,256 |
1,559,645 |
Total liabilities |
|
3,526,638 |
|
|
2,343,729 |
Total equity and liabilities |
|
16,861,419 |
|
|
14,449,431 |
Consolidated Condensed Interim Statement of Cash
Flows
(all amounts in thousands of
U.S. dollars) |
|
Three-month period ended September 30, |
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
Unaudited |
Unaudited |
Cash flows from operating activities |
|
|
|
|
|
Income for the period |
|
608,070 |
|
326,235 |
|
1,745,529 |
|
717,182 |
|
Adjustments for: |
|
|
|
|
|
Depreciation and amortization |
|
142,488 |
|
148,465 |
|
428,588 |
|
442,561 |
|
Income tax accruals less payments |
|
72,639 |
|
12,197 |
|
118,590 |
|
11,630 |
|
Equity in earnings of non-consolidated companies |
|
(5,295 |
) |
(154,139 |
) |
(196,001 |
) |
(379,109 |
) |
Interest accruals less payments, net |
|
6,763 |
|
(490 |
) |
5,152 |
|
(12,537 |
) |
Changes in provisions |
|
(1,210 |
) |
4,618 |
|
9,269 |
|
14,216 |
|
Reclassification of currency translation adjustment reserve |
|
- |
|
- |
|
(71,252 |
) |
- |
|
Changes in working capital |
|
(601,242 |
) |
(275,622 |
) |
(1,408,341 |
) |
(672,712 |
) |
Currency translation adjustment and others |
|
19,914 |
|
(8,360 |
) |
11,741 |
|
(48,186 |
) |
Net cash provided by operating activities |
|
242,127 |
|
52,904 |
|
643,275 |
|
73,045 |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Capital expenditures |
|
(129,457 |
) |
(74,306 |
) |
(270,800 |
) |
(170,871 |
) |
Changes in advance to suppliers of property, plant and
equipment |
|
14,062 |
|
1,308 |
|
(5,793 |
) |
(4,420 |
) |
Acquisition of subsidiaries, net of cash acquired |
|
- |
|
- |
|
(4,082 |
) |
- |
|
Proceeds from disposal of property, plant and equipment and
intangible assets |
|
772 |
|
9,016 |
|
46,768 |
|
14,355 |
|
Investment in companies under cost method |
|
- |
|
(692 |
) |
- |
|
(692 |
) |
Dividends received from non-consolidated companies |
|
- |
|
- |
|
45,488 |
|
49,131 |
|
Changes in investments in securities |
|
128,746 |
|
35,500 |
|
85,175 |
|
278,423 |
|
Net cash provided by (used in) investing
activities |
|
14,123 |
|
(29,174 |
) |
(103,244 |
) |
165,926 |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Dividends paid |
|
- |
|
- |
|
(330,584 |
) |
(165,275 |
) |
Dividends paid to
non-controlling interest in subsidiaries |
|
(10,432 |
) |
(148 |
) |
(10,432 |
) |
(3,355 |
) |
Changes in non-controlling
interests |
|
(5,128 |
) |
- |
|
(3,506 |
) |
- |
|
Payments of lease
liabilities |
|
(10,431 |
) |
(11,917 |
) |
(38,836 |
) |
(38,221 |
) |
Proceeds from borrowings |
|
497,982 |
|
289,579 |
|
1,349,718 |
|
575,698 |
|
Repayments of borrowings |
|
(352,411 |
) |
(370,438 |
) |
(793,587 |
) |
(674,325 |
) |
Net cash provided by (used in) financing
activities |
|
119,580 |
|
(92,924 |
) |
172,773 |
|
(305,478 |
) |
|
|
|
|
|
|
Increase (decrease) in cash and cash
equivalents |
|
375,830 |
|
(69,194 |
) |
712,804 |
|
(66,507 |
) |
|
|
|
|
|
|
Movement in cash and cash equivalents |
|
|
|
|
|
At the beginning of the
period |
|
635,928 |
|
585,239 |
|
318,067 |
|
584,583 |
|
Effect of exchange rate
changes |
|
(20,955 |
) |
(2,380 |
) |
(40,068 |
) |
(4,411 |
) |
Increase (decrease) in cash
and cash equivalents |
|
375,830 |
|
(69,194 |
) |
712,804 |
|
(66,507 |
) |
|
|
990,803 |
|
513,665 |
|
990,803 |
|
513,665 |
|
Exhibit I – Alternative performance
measures
Alternative performance measures should be
considered in addition to, not as substitute for or superior to,
other measures of financial performance prepared in accordance with
IFRS.
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 recurring 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 = Net income for the period + Income tax
charges +/- Equity in Earnings (losses) of non-consolidated
companies +/- Financial results + Depreciation and amortization +/-
Impairment charges/(reversals)
EBITDA is a non-IFRS alternative performance measure.
(all amounts in thousands of U.S. dollars) |
Three-month period ended September 30, |
Nine-month period ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Income for continuing
operations |
608,070 |
|
326,235 |
|
1,745,529 |
|
717,182 |
|
Income tax |
171,239 |
|
58,505 |
|
359,010 |
|
117,202 |
|
Equity in earnings of
non-consolidated companies |
(5,295 |
) |
(154,139 |
) |
(196,001 |
) |
(379,109 |
) |
Financial Results |
29,111 |
|
308 |
|
41,686 |
|
(21,081 |
) |
Depreciation and
amortization |
142,488 |
|
148,465 |
|
428,588 |
|
442,561 |
|
EBITDA |
945,613 |
|
379,374 |
|
2,378,812 |
|
876,755 |
|
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.
Free cash flow is a non-IFRS alternative performance
measure.
(all amounts in thousands of U.S. dollars) |
Three-month period ended September 30, |
Nine-month period ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Net cash provided by operating
activities |
242,127 |
|
52,904 |
|
643,275 |
|
73,045 |
|
Capital expenditures |
(129,457 |
) |
(74,306 |
) |
(270,800 |
) |
(170,871 |
) |
Free cash
flow |
112,670 |
|
(21,402 |
) |
372,475 |
|
(97,826 |
) |
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).
Net cash/debt is a non-IFRS alternative performance measure.
(all amounts in thousands of U.S. dollars) |
At September 30, |
|
2022 |
|
2021 |
|
Cash and cash equivalents |
994,854 |
|
513,781 |
|
Other current investments |
434,566 |
|
457,861 |
|
Non-current investments |
144,222 |
|
369,079 |
|
Derivatives hedging borrowings
and investments |
1,284 |
|
3,381 |
|
Current borrowings |
(827,962 |
) |
(402,237 |
) |
Non-current borrowings |
(47,164 |
) |
(111,442 |
) |
Net cash |
699,800 |
|
830,423 |
|
Operating working capital days
Operating working capital is the difference
between the main operating components of current assets and current
liabilities. Operating working capital is a measure of a company’s
operational efficiency, and short-term financial health.
Operating working capital days is calculated in
the following manner:
Operating working capital days = [(Inventories +
Trade receivables – Trade payables – Customer advances) /
Annualized quarterly sales ] x 365
Operating working capital days is a non-IFRS alternative
performance measure.
(all amounts in thousands of
U.S. dollars) |
At September 30, |
|
2022 |
|
2021 |
|
Inventories |
3,679,135 |
|
2,477,445 |
|
Trade receivables |
2,013,660 |
|
1,111,174 |
|
Customer advances |
(324,623 |
) |
(56,738 |
) |
Trade payables |
(1,011,037 |
) |
(791,424 |
) |
Operating working
capital |
4,357,135 |
|
2,740,457 |
|
Annualized quarterly
sales |
11,899,204 |
|
7,014,972 |
|
Operating working capital
days |
134 |
|
143 |
|
Giovanni
Sardagna Tenaris
1-888-300-5432www.tenaris.com
Tenaris (BIT:TEN)
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