The financial and operational information contained in this press release is
based on unaudited consolidated condensed interim financial statements presented
in U.S. dollars and prepared in accordance with International Financial
Reporting Standards as issued by the International Accounting Standard Board and
adopted by the European Union, or IFRS. Additionally, this press release
includes non-IFRS alternative performance measures i.e., EBITDA, Free Cash Flow,
Net cash / debt and Operating working capital days. See exhibit I for more
details on these alternative performance measures.
LUXEMBOURG, Nov. 01, 2023 (GLOBE NEWSWIRE) -- Tenaris S.A. (NYSE and Mexico: TS
and EXM Italy: TEN) ("Tenaris") today announced its results for the quarter
ended September 30, 2023 in comparison with its results for the quarter ended
September 30, 2022.
Summary of 2023 Third Quarter Results
--------------------------------------
3Q 2023 2Q 2023 3Q 2022
--------------------------------------
Net sales ($ million) 3,238 4,075 (21 %) 2,975 9 %
Operating income ($ million) 868 1,278 (32 %) 803 8 %
Net income* ($ million) 547 1,136 (52 %) 608 (10 %)
Shareholders' net income* ($ million) 537 1,123 (52 %) 606 (11 %)
Earnings per ADS ($) 0.91 1.90 (52 %) 1.03 (11 %)
Earnings per share ($) 0.46 0.95 (52 %) 0.51 (11 %)
EBITDA** ($ million) 1,004 1,409 (29 %) 946 6 %
EBITDA margin (% of net sales) 31.0 % 34.6 % 31.8 %
* Net income in 3Q 2023 includes a non-cash charge of $144 million relating to
the remeasurement and recycling of CTA to the income statement, of our direct
and indirect investment in Usiminas. Excluding this one-off effect, for the
quarter Net income would have been $691 million. Earnings per share and per ADS
would have been $0.58 and $1.16, respectively.
** EBITDA in 3Q 2023 includes a one-off gain of $32 million on the transfer of
court awards relating to Venezuelan nationalized assets. Excluding this one-off
gain EBITDA would have been $972 million (30.0%) in 3Q 2023.
Our third quarter sales declined 21% sequentially reflecting activity and price
declines throughout the Americas, lower quarterly shipments to offshore
projects, lower pipeline shipments in Argentina as well as lower sales in market
segments such as European mechanical products. Our EBITDA, excluding a one-off
gain of $32 million on the transfer of court awards relating to Venezuelan
nationalized assets, amounted to $972 million, with the margin adjusting to
changes in market prices in the Americas. Our net income was affected by non-
cash charges of $144 million relating to the remeasurement and recycling of
currency translation reserve to the income statement, of our direct and indirect
(through Ternium) investment in Usiminas, following the purchase of additional
Usiminas shares by both companies.
Our free cash flow for the quarter amounted to $1.1 billion, and has reached
$3.1 billion on a cumulative basis for the current fiscal year. This included a
further reduction in working capital of $415 million during the quarter. After
investing $100 million on the acquisition of additional pipe processing assets
in the Houston area of the United States and a pipe coating facility in Italy,
our net cash position rose to $3.3 billion at September 30, 2023.
Interim Dividend Payment
Our board of directors approved the payment of an interim dividend of $0.20 per
share ($0.40 per ADS), or approximately $236 million. The payment date will be
November 22, 2023 , with an ex-dividend date on November 20, 2023 and record
date on November 21, 2023.
Tenaris Approves Share Buyback Program
Tenaris's Board of Directors approved a share buyback program of up to $1.2
billion (which, at the closing price of November 1, 2023 on the Milan Stock
Exchange would represent 75.4 million shares, or 6.4% of Tenaris's outstanding
shares), to be executed within a year, with the intention to cancel the ordinary
shares acquired through the program.
The decision and opportunity of initiating the buyback program is driven by the
company's significant cash flow generation and strong balance sheet.
The buyback program will be carried out under the authority granted by the
annual general meeting of shareholders held on June 2, 2020, which may be
renewed or extended, up to a maximum of 10% of the Company´s shares.
The buyback program is expected to be launched in the near future. The program
will be divided in tranches and purchases will be executed through a primary
financial institution.
The buybacks may be ceased, paused and continued at any time, subject to
compliance with applicable laws and regulations.
Tenaris will provide updates on the buyback program via press releases and on
the Investors section of its corporate website. The buybacks will be carried out
subject to market conditions and in compliance with applicable laws and
regulations, including the Market Abuse Regulation 596/2014 and the Commission
Delegated Regulation (EU) 2016/1052.
Market Background and Outlook
In the past few months, oil prices have remained above $80 per barrel, despite
concerns about the impact of high interest rates on the global economy. US
natural gas prices are rising along with LNG and European natural gas prices,
which are showing high volatility in the face of potential supply interruptions
and a positive demand outlook.
In the United States, the decline in oil and gas drilling activity seen during
the year so far is bottoming out and is expected to recover as we go into the
next year. Oil inventories have declined to a low level as have the stock of
drilled but uncompleted wells (DUCs). At the same time, OCTG inventories are
coming down towards more normal levels. In Canada, drilling activity has fallen
below the level of the previous year but is expected to recover in 2024 with
additional takeaway and LNG capacity coming on stream. Around the world,
offshore drilling has been increasing with a focus on highly productive reserves
such as those in Brazil and Guyana. In the Middle East, activity has increased
this year and is expected to increase further.
In the fourth quarter, our sales in the Americas will be affected by the ongoing
adjustment in price levels (which continue to be affected by imports), while our
sales in the Middle East and for offshore projects should increase and support
our total sales. Our EBITDA margin will decline reflecting lower prices in the
Americas and our free cash flow will adjust to a lower EBITDA and a more stable
working capital position.
Wind Farm Investment
In October, we put into full operation, with its 24 turbines, our Buena Ventura
Wind Farm in Argentina. The wind farm is supplying 103.2 MW of power, through
the interconnected grid, to our industrial facilities in Campana, close to 50%
of its total electric power requirements and will reduce our CO2 emissions at
the facility by 152,000 tons per year.
On November 1, 2023, following a successful bid for priority connection rights
to the interconnected grid, the Company's Board of Directors approved an
investment plan to build a second wind farm in Argentina at a cost of
approximately $214 million, which would supply a further 30% of the current
energy requirements of our facilities in Campana, and reduce our CO2 emissions
by a further 102,500 tons per year. This investment is expected to be completed
during 2025.
Analysis of 2023 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 2023 2Q 2023 3Q 2022
-------------------------------
Seamless 744 844 (12 %) 750 (1 %)
Welded 169 255 (34 %) 106 60 %
Total 913 1,099 (17 %) 856 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 3Q 2023 2Q 2023 3Q 2022
-------------------------------------
(Net sales - $ million)
North America 1,700 2,142 (21 %) 1,761 (3 %)
South America 608 893 (32 %) 600 1 %
Europe 231 270 (14 %) 190 22 %
Asia Pacific, Middle East and Africa 556 612 (9 %) 280 98 %
Total net sales ($ million) 3,095 3,918 (21 %) 2,832 9 %
Operating income ($ million) 841 1,251 (33 %) 780 8 %
Operating margin (% of sales) 27.2 % 31.9 % 27.5 %
Net sales of tubular products and services decreased 21% sequentially and
increased 9% year on year. On a sequential basis volumes shipped decreased 17%
and average selling prices decreased 5%. In North America, activity and
shipments declined in the US onshore market and in the Gulf of Mexico, with
price declines across the region, while sales in Canada were held back by lower
activity from key customers. In South America we had a further decline in sales
for pipelines in Argentina, and lower sales of offshore OCTG and line pipe in
Brazil following exceptionally high sales in the previous quarter. In Europe we
had lower sales of mechanical pipe products to distributors amidst a declining
market environment. In the AMEA region we had lower sales in Iraq, Egypt and
Indonesia.
Operating results from tubular products and services amounted to a gain of $841
million in the third quarter of 2023 compared to a gain of $1,251 million in the
previous quarter and $780 million in the third quarter of 2022. During the
quarter, operating income includes a non-recurring gain of $32 million
corresponding to the sale of the awards related to the Company's Venezuelan
nationalized assets. The decline in operating income during the quarter is
related to the decrease in sales due to both volume and price declines together
with an increase in unit costs due to higher raw material costs and a negative
industrial performance and absorption of fixed and semi-fixed costs associated
with lower volumes.
Others
The following table indicates, for our Others business segment, net sales,
operating income and operating income as a percentage of net sales for the
periods indicated below:
---------------------------------
Others 3Q 2023 2Q 2023 3Q 2022
---------------------------------
Net sales ($ million) 143 157 (9 %) 143 0 %
Operating income ($ million) 27 27 0 % 23 17 %
Operating margin (% of sales) 19.0 % 17.3 % 16.2 %
Net sales of other products and services decreased 9% sequentially and remained
flat year on year. Sequentially, sales declined mainly due to lower sales of
oilfield services in Argentina and lower sales of pipes for plumbing
applications in Italy.
Selling, general and administrative expenses, or SG&A, amounted to $433 million,
or 13.4% of net sales, in the third quarter of 2023, compared to $529 million,
13.0% in the previous quarter and $403 million, 13.6% in the third quarter of
2022. Sequentially, our SG&A expenses decreased mainly due to lower shipment
costs due to a reduction in volumes shipped and lower provisions for
contingencies.
Other operating results amounted to a net gain of $36 million in the third
quarter of 2023, compared to a net loss of $1 million in the previous quarter
and $2 million net loss in the third quarter of 2022. During the quarter other
operating income includes a non-recurring gain of $32 million corresponding to
the transfer of court awards related to the Company's Venezuelan nationalized
assets.
Financial results amounted to a gain of $67 million in the third quarter of
2023, compared to a gain of $40 million in the previous quarter and a loss of
$29 million in the third quarter of 2022. Net finance income increased $28
million sequentially due to the increase in the net cash position.
Equity in earnings of non-consolidated companies generated a loss of $110
million in the third quarter of 2023, compared to a gain of $96 million in the
previous quarter and a gain of $5 million in the third quarter of 2022. The
result of the quarter includes a non-cash loss of $144 million from our
investment in Usiminas ($26 million from our direct investment in Usiminas and
$118 million from our indirect investment in Usiminas through Ternium), related
to the fair value measurement of the shares and the result of recycling
Ternium´s negative accumulated currency translation reserve to the income
statement.
Income tax charge amounted to $278 million in the third quarter of 2023, the
same as in the previous quarter and compared to $171 million in the third
quarter of 2022. Income tax of the quarter includes a net $62 million charge
from foreign exchange effects net of inflation adjustments, mainly in Argentina
and Mexico.
Cash Flow and Liquidity of 2023 Third Quarter
Net cash generated by operating activities during the third quarter of 2023 was
$1.3 billion, compared to $1.3 billion in the previous quarter and $242 million
in the third quarter of 2022. During the third quarter of 2023 cash generated by
operating activities includes a reduction in working capital of $415 million
mainly related to a reduction in trade receivables of $422 million.
With capital expenditures of $170 million, our free cash flow amounted to $1.1
billion during the quarter and our net cash position amounted to $3.3 billion at
September 30, 2023.
Analysis of 2023 First Nine Months Results
-------------------------------------
9M 2023 9M 2022 Increase/(Decrease)
-------------------------------------
Net sales ($ million) 11,454 8,142 41 %
Operating income ($ million) 3,497 1,950 79 %
Net income* ($ million) 2,812 1,746 61 %
Shareholders' net income ($ million) 2,789 1,746 60 %
Earnings per ADS ($) 4.72 2.96 59 %
Earnings per share ($) 2.36 1.48 59 %
EBITDA** ($ million) 3,890 2,379 64 %
EBITDA margin (% of net sales) 34.0 % 29.2 %
* Net income in 9M 2023 includes a non-cash charge of $144 million relating to
the remeasurement and recycling of CTA to the income statement, of our direct
and indirect investment in Usiminas. Excluding this one-off effect, for the
period Net income would have been $2,956 million. Earnings per share and per ADS
would have been $2.48 and $4.97, respectively.
** EBITDA in 9M 2023 includes a one-off gain of $32 million on the transfer of
court awards relating to Venezuelan nationalized assets. Excluding this one-off
gain EBITDA would have been $3,922 million (34.2%) in the period.
The following table shows our net sales by business segment for the periods
indicated below:
-------------------------------------------
Net sales ($ million) 9M 2023 9M 2022 Increase/(Decrease)
-------------------------------------------
Tubes 10,987 96 % 7,667 94 % 43 %
Others 467 4 % 475 6 % (2 %)
Total 11,454 8,142 41 %
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 2023 9M 2022 Increase/(Decrease)
------------------------------------
Seamless 2,428 2,337 4 %
Welded 707 231 206 %
Total 3,136 2,568 22 %
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 2023 9M 2022 Increase/(Decrease)
-------------------------------------
(Net sales - $ million)
North America 6,071 4,691 29 %
South America 2,476 1,411 76 %
Europe 754 681 11 %
Asia Pacific, Middle East and Africa 1,687 884 91 %
Total net sales ($ million) 10,987 7,667 43 %
Operating income ($ million) 3,403 1,887 80 %
Operating margin (% of sales) 31.0 % 24.6 %
Net sales of tubular products and services increased 43% to $10,987 million in
the first nine months of 2023, compared to $7,667 million in the first nine
months of 2022 due to an increase of 22% in volumes (amost entirely welded
products) and a 17% increase in average selling prices. Sales increased in all
regions, mainly in the Americas and AMEA, with the recovey being in both volumes
and prices. Average drilling activity in the first nine months of 2023 increased
only 1% in the United States & Canada and 13% internationally compared to the
first nine months of 2022.
Operating results from tubular products and services amounted to a gain of
$3,403 million in the first nine months of 2023 compared to $1,887 million in
the first nine months of 2022. The improvement in operating results was driven
by the recovery in sales and margins, as higher tubes prices and an improvement
in industrial performance due to the increased levels of activity and
utilization of production capacity more than offset the increase in raw material
and energy costs.
Others
The following table indicates, for our Others business segment, net sales,
operating income and operating income as a percentage of net sales for the
periods indicated below:
--------------------------------------------
Others 9M 2023 9M 2022 Increase/(Decrease)
--------------------------------------------
Net sales ($ million) 467 475 (2 %)
Operating income ($ million) 94 63 49 %
Operating margin (% of sales) 20.1 % 13.2 %
Net sales of other products and services decreased 2% to $467 million in the
first nine months of 2023, compared to $475 million in the first nine months of
2022, mainly due to lower sales of excess raw materials and pipes for plumbing
applications in Italy, partially offset by an increase in sales of sucker rods,
oilfield services in Argentina and coiled tubing.
Selling, general and administrative expenses, or SG&A, amounted to $1,449
million in the first nine months of 2023, representing 12.6% of sales, and
$1,180 million in the first nine months of 2022, representing 14.5% 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 $41 million in the first nine
months of 2023, compared to a net gain of $12 million in the first nine months
of 2022. In the first nine months of 2023 other operating income includes a non-
recurring gain of $33 million corresponding to the transfer of the awards
related to the Company's Venezuelan nationalized assets. 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.
Financial results amounted to a gain of $128 million in the first nine months of
2023, compared to a loss of $42 million in the first nine months of 2022. The
better financial results are due to higher net finance income related to higher
interest rates on a stronger financial position and positive foreign exchange
results.
Equity in earnings of non-consolidated companies generated a gain of $39 million
in the first nine months of 2023, compared to a gain of $196 million in the
first nine months of 2022. The result of the first nine months of 2023 includes
a non-cash loss of $144 million from our investment in Usiminas ($26 million
from our direct investment in Usiminas and $118 million from our indirect
investment in Usiminas through Ternium), related to the fair value measurement
of the shares and the result of recycling Ternium´s negative accumulated
currency translation reserve to the income statement. 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 $852 million in the first nine months of
2023, compared to $359 million in the first nine months of 2022. The increase in
income tax reflects better results at several subsidiaries.
Cash Flow and Liquidity of 2023 First Nine Months
Net cash provided by operating activities during the first nine months of 2023
amounted to $3.6 billion (including a decrease in working capital of $248
million), compared to $643 million (net of an increase in working capital of
$1.4 billion) in the first nine months of 2022.
Capital expenditures amounted to $453 million in the first nine months of 2023,
compared to $271 million in the first nine months of 2022. Free cash flow
amounted to $3.1 billion in the first nine months of 2023, compared to $372
million in the first nine months of 2022.
Our net cash position amounted to $3.3 billion at September 30, 2023, compared
to $0.9 billion at December 31, 2022.
Conference call
Tenaris will hold a conference call to discuss the above reported results, on
November 2, 2023, at 08:00 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 (https://ir.tenaris.com/events-and-
presentations) or
https://edge.media-server.com/mmc/p/mmvgfe8a
If you wish to participate in the Q&A session please register at the following
link:
https://register.vevent.com/register/BI438c41074e8343048d87bb81a38e9165
Please connect 10 minutes before the scheduled start time.
A replay of the conference call will also be available on our webpage at
(http://ir.tenaris.com/):
ir.tenaris.com/events-and-presentations (https://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 Three-month period ended Nine-month period ended
of U.S. dollars) September 30, September 30,
----------------------------------------------------
2023 2022 2023 2022
----------------------------------------------------
Unaudited Unaudited
Net sales 3,237,836 2,974,801 11,453,930 8,142,316
Cost of sales (1,973,381 ) (1,766,486 ) (6,548,324 ) (5,023,770 )
----------------------------------------------------
Gross profit 1,264,455 1,208,315 4,905,606 3,118,546
Selling, general and
administrative expenses (432,682 ) (403,435 ) (1,448,765 ) (1,180,097 )
Other operating income
(expense), net 36,128 (1,755 ) 40,604 11,775
----------------------------------------------------
Operating income 867,901 803,125 3,497,445 1,950,224
Finance Income 56,100 26,998 149,853 42,264
Finance Cost (19,179 ) (17,741 ) (87,103 ) (25,703 )
Other financial results,
net 30,565 (38,368 ) 65,116 (58,247 )
----------------------------------------------------
Income before equity in
earnings of non-
consolidated companies and
income tax 935,387 774,014 3,625,311 1,908,538
Equity in (losses)
earnings of non-
consolidated companies (110,382 ) 5,295 38,545 196,001
----------------------------------------------------
Income before income tax 825,005 779,309 3,663,856 2,104,539
Income tax (278,200 ) (171,239 ) (851,804 ) (359,010 )
----------------------------------------------------
Income for the period 546,805 608,070 2,812,052 1,745,529
----------------------------------------------------
Attributable to:
Shareholders' equity 537,311 606,470 2,788,967 1,745,962
Non-controlling interests 9,494 1,600 23,085 (433 )
----------------------------------------------------
546,805 608,070 2,812,052 1,745,529
----------------------------------------------------
Consolidated Condensed Interim Statement of Financial Position
(all amounts in thousands of U.S. At September
dollars) 30, 2023 At December 31, 2022
---------------------- ---------------------
Unaudited
ASSETS
Non-current assets
Property, plant and equipment, net 5,910,555 5,556,263
Intangible assets, net 1,336,609 1,332,508
Right-of-use assets, net 116,976 111,741
Investments in non-consolidated
companies 1,602,494 1,540,646
Other investments 566,475 119,902
Deferred tax assets 195,332 208,870
Receivables, net 154,291 9,882,732 211,720 9,081,650
----------- -----------
Current assets
Inventories, net 3,884,882 3,986,929
Receivables and prepayments, net 247,427 183,811
Current tax assets 283,096 243,136
Trade receivables, net 2,169,293 2,493,940
Derivative financial instruments 11,113 30,805
Other investments 2,496,747 438,448
Cash and cash equivalents 864,043 9,956,601 1,091,527 8,468,596
----------- -----------
Total assets 19,839,333 17,550,246
------------ -----------
EQUITY
Shareholders' equity 16,229,531 13,905,709
Non-controlling interests 170,592 128,728
Total equity 16,400,123 14,034,437
------------ -----------
LIABILITIES
Non-current liabilities
Borrowings 25,248 46,433
Lease liabilities 86,401 83,616
Deferred tax liabilities 447,053 269,069
Other liabilities 249,774 230,142
Provisions 102,040 910,516 98,126 727,386
----------- -----------
Current liabilities
Borrowings 597,493 682,329
Lease liabilities 32,778 28,561
Derivative financial instruments 5,563 7,127
Current tax liabilities 379,724 376,240
Other liabilities 324,188 260,614
Provisions 29,20611,185
Customer advances 160,533 242,910
Trade payables 999,209 2,528,694 1,179,457 2,788,423
----------- -----------
Total liabilities 3,439,210 3,515,809
------------ -----------
Total equity and liabilities 19,839,333 17,550,246
------------ -----------
Consolidated Condensed Interim Statement of Cash Flows
Three-month period
(all amounts in thousands ended Nine-month period ended
of U.S. dollars) September 30, September 30,
--------------------------------------------------
2023 2022 2023 2022
--------------------------------------------------
Unaudited Unaudited
Cash flows from operating
activities
Income for the period 546,805 608,070 2,812,052 1,745,529
Adjustments for: -
Depreciation and
amortization 136,129 142,488 392,163 428,588
Income tax accruals less
payments 76,994 72,639 134,168 118,590
Equity in earnings of non-
consolidated companies 110,382 (5,295 ) (38,545 ) (196,001 )
Interest accruals less
payments, net (22,986 ) 6,763 (44,926 ) 5,152
Changes in provisions (17,998 ) (1,210 ) 21,935 9,269
Reclassification of
currency translation
adjustment reserve - - - (71,252 )
Changes in working capital 414,887 (625,306 ) 248,125 (1,449,130 )
Others, including currency
translation adjustment 52,721 43,978 34,366 52,530
--------------------------------------------------
Net cash provided by
operating activities 1,296,934 242,127 3,559,338 643,275
--------------------------------------------------
Cash flows from investing
activities
Capital expenditures (170,376 ) (129,457 ) (452,625 ) (270,800 )
Changes in advance to
suppliers of property,
plant and equipment (1,342 ) 14,062 902 (5,793 )
Acquisition of
subsidiaries, net of cash
acquired (100,311 ) - (104,419 ) (4,082 )
Additions to associated
companies (22,661 ) - (22,661 ) -
Loan to non-consolidated
companies (1,427 ) - (2,662 ) -
Proceeds from disposal of
property, plant and
equipment and intangible
assets 648 772 9,023 46,768
Dividends received from
non-consolidated companies - - 43,513 45,488
Changes in investments in
securities (809,796 ) 128,746 (2,597,425 ) 85,175
--------------------------------------------------
Net cash (used in)
provided by investing
activities (1,105,265 ) 14,123 (3,126,354 ) (103,244 )
--------------------------------------------------
Cash flows from financing
activities
Dividends paid - - (401,383 ) (330,584 )
Dividends paid to non-
controlling interest in
subsidiaries (1,530 ) (10,432 ) (18,967 ) (10,432 )
Changes in non-controlling
interests 2,033 (5,128 ) 3,772 (3,506 )
Payments of lease
liabilities (12,199 ) (10,431 ) (35,968 ) (38,836 )
Proceeds from borrowings 326,185 497,982 1,358,223 1,349,718
Repayments of borrowings (381,886 ) (352,411 ) (1,524,973 ) (793,587 )
--------------------------------------------------
Net cash (used in)
provided by financing
activities (67,397 ) 119,580 (619,296 ) 172,773
--------------------------------------------------
---------------------------- --------------------------------------------------
Increase (decrease) in
cash and cash equivalents 124,272 375,830 (186,312 ) 712,804
---------------------------- --------------------------------------------------
Movement in cash and cash
equivalents
At the beginning of the
period 755,271 635,928 1,091,433 318,067
Effect of exchange rate
changes (15,531 ) (20,955 ) (41,109 ) (40,068 )
Increase (decrease) in
cash and cash equivalents 124,272 375,830 (186,312 ) 712,804
--------------------------------------------------
864,012 990,803 864,012 990,803
--------------------------------------------------
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.
Three-month period
(all amounts in thousands of ended Nine-month period ended
U.S. dollars) September 30, September 30,
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2023 2022 2023 2022
----------------------------------------------
Income for the period 546,805 608,070 2,812,052 1,745,529
Income tax charge 278,200 171,239 851,804 359,010
Equity in (losses) earnings of
non-consolidated companies 110,382 (5,295 ) (38,545 ) (196,001 )
Financial Results (67,486 ) 29,111 (127,866 ) 41,686
Depreciation and amortization 136,129 142,488 392,163 428,588
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EBITDA 1,004,030 945,613 3,889,608 2,378,812
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.
Three-month period Nine-month period
(all amounts in thousands of ended ended
U.S. dollars) September 30, September 30,
----------------------------------------------
2023 2022 2023 2022
----------------------------------------------
Net cash provided by operating
activities 1,296,934 242,127 3,559,338 643,275
Capital expenditures (170,376 ) (129,457 ) (452,625 ) (270,800 )
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Free cash flow 1,126,558 112,670 3,106,713 372,475
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,
-----------------------
2023 2022
-----------------------
Cash and cash equivalents 864,043 994,854
Other current investments 2,496,747 434,566
Non-current investments 560,489 144,222
Derivatives hedging borrowings and investments 766 1,284
Current borrowings (597,493 ) (827,962 )
Non-current borrowings (25,248 ) (47,164 )
-----------------------
Net cash 3,299,304 699,800
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,
----------------------------------
2023 2022
----------------------------------
Inventories 3,884,882 3,679,135
Trade receivables 2,169,293 2,013,660
Customer advances (160,533 ) (324,623 )
Trade payables (999,209 ) (1,011,037 )
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Operating working capital 4,894,433 4,357,135
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Annualized quarterly sales 12,951,344 11,899,204
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Operating working capital days 138 134
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Giovanni Sardagna
Tenaris
1-888-300-5432
www.tenaris.com
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