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Tenaris Announces 2013 First Quarter Results

Tenaris Announces 2013 First Quarter Results 
The Financial and Operational Information Contained in This Press
Release Is Based on Unaudited Consolidated 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. 
LUXEMBOURG -- (Marketwired) -- 05/01/13 --  Tenaris S.A. (NYSE: TS)
(BAE: TS) (BMV: TS) (MILAN: TEN) ("Tenaris") today announced its
results for the quarter ended March 31, 2013 in comparison with its
results for the quarter ended March 31, 2012.  
Summary of 2013 First Quarter Results 
(Comparison with fourth and first quarters of 2012) 


 
                                      Q1 2013     Q4 2012        Q1 2012    
Net sales ($ million)                   2,678    2,758   (3%)   2,617    2% 
Operating income ($ million)              554      586   (5%)     566   (2%)
Net income ($ million)                    423      350   21%      448   (6%)
Shareholders' net income ($ million)      425      358   19%      439   (3%)
Earnings per ADS ($)                     0.72     0.61   19%     0.74   (3%)
Earnings per share ($)                   0.36     0.30   19%     0.37   (3%)
EBITDA* ($ million)                       699      733   (5%)     704   (1%)
EBITDA margin (% of net sales)           26.1%    26.6%          26.9%      

 
*EBITDA is defined as operating income plus depreciation, amortization
and impairment charges/(reversals) 
Our first quarter sales decreased 3% sequentially as higher sales of
premium OCTG products in Saudi Arabia and Sub-Saharan Africa did not
fully compensate for lower sales in South America and the impact of
lower market prices for less differentiated products in North
America. Our EBITDA and operating margins maintained a good level in
a competitive market.  
Cash provided by operating activities reached $563 million during the
quarter and at the end of the quarter we had a net cash position
(cash and other current investments less total borrowings) of $121
million. 
Market Background and Outlook 
Over the past three quarters, drilling activity in North America 
has
slowed down and should start to pick up by the end of the year, while
in the rest of the world it should continue to increase slowly,
supported by current oil and gas prices. 
In the second quarter, the Canadian break up will affect our sales in
North America. Sales in the Middle East are expected to increase
further from the level of the first quarter. In the second half,
sales of line pipe in Brazil will be affected by delays in project
execution. Industrial customers in Europe will continue to be
affected by weak economic activity. 
In this environment, sales and margins for the rest of the year are
expected to remain close to current levels with product mix
improvements helping to offset the impact of lower prices in less
differentiated segments. 
Analysis of 2013 First Quarter Results 


 
Tubes Sales volume                                                          
 (thousand metric tons)                Q1 2013    Q4 2012        Q1 2012    
Seamless                                   657      669  (2%)      664  (1%)
Welded                                     289      306  (6%)      289   -  
Total                                      946      975  (3%)      953  (1%)
                                                                            
                                                                            
                Tubes                 Q1 2013     Q4 2012        Q1 201
2    
(Net sales - $ million)                                                     
North America                           1,143    1,155   (1%)   1,269  (10%)
South America                             595      693  (14%)     463   29% 
Europe                                    268      243   10%      262    2% 
Middle East & Africa                      400      378    6%      281   42% 
Far East & Oceania                         82      110  (25%)     126  (35%)
Total net sales ($ million)             2,488    2,578   (3%)   2,400    4% 
Operating income ($ million)              526      572   (8%)     529   (1%)
Operating income (% of sales)            21.1%    22.2%          22.1%      

 
Net sales of tubular products and services decreased 3% sequentially
but increased 4% year on year. Sales decreased sequentially as higher
sales of premium in Saudi Arabia and Sub-Saharan Africa did not fully
compensate for lower sales in South America and lower market prices
in North America. In North America, higher sales in Canada largely
offset the effect of lower market prices and less favorable product
mix in the United States. In South America, sales decreased due to
lower sales of line pipe in Argentina and of OCTG in Colombia. In
Europe, sales increased due to higher sales of line pipe for offshore
projects in Norway. In the Middle East and Africa, sales increased
due to higher sales of premium products in Saudi Arabia and
Sub-Saharan Africa. In the Far East and Oceania, sales decreased due
to lower sales of line pipe and industrial products in the region. 
Operating income from tubular products and services decreased 8%
sequentially and 1% year on year, reflecting a decline in sales and
in operating margin. 


 
                  Others                  Q1 2013    Q4 2012     Q1 2012    
Net sales ($ million)                         190     180    6%    217 (12%)
Operating income ($ million)                   28      14  100%     37 (24%)
Operating income (% of sales)                14.5%    7.6%        17.0%     

 
Net sales of other products and services increased 6% sequentially but
declined 12% year on year. The sequential increase in sales and
operating income was mainly due to higher sales and operating income
of our industrial equipment business in Brazil.  
Selling, general and administrative expenses, or SG&A, amounted to
$476 million, or 17.8% of net sales, in the first quarter of 2013,
compared to $494 million, 17.9% in the previous quarter and $444
million, 17.0% in the first quarter of 2012.  
Net interest expenses amounted to $8 million in the first quarter of
2013, compared to $6 million in the previous quarter and $0.3 million 
in the first quarter of 2012.  
Other financial results generated a loss of $1 million during the
first quarter of 2013, compared to a loss of $10 million in the
previous quarter and a gain of $13 million during the first quarter
of 2012. These results largely reflect gains and losses on net
foreign exchange transactions and the fair value of derivative
instruments.  
Equity in earnings of associated companies generated a gain of $12
million in the first quarter of 2013, compared to a loss of $108
million in the previous quarter and a gain of $14 million in the
first quarter of 2012. These results are mainly derived from our
equity investment in Ternium (NYSE: TX) and Usiminas. In the previous
quarter, these results were negatively affected by the impairment
recorded on our investment in Usiminas.  
Income tax charges totaled $134 million in the first quarter of 2013,
equivalent to 24.6% of income before equity in earnings of associated
companies and income tax, compared to $112 million, or19.6% in the
previous quarter and $145 million or 25.0% in the first quarter of
2012.  
Results attributable to non-controlling interests amounted to losses
of $2 million in the first quarter of 2013, compared to losses of $7
million in the previous quarter and gains of $10 million in the first
quarter of 2012.  
Cash Flow and Liquidity 
Net cash provided by operations during the first quarter of 2013 was
$563 million, compared to $347 million in the previous quarter and
$608 million in the first quarter of 2012.  
Capital expenditures amounted to $184 million for the first quarter
of 2013, compared to $202 million in the previous quarter and $196
million in the first quarter of 2012.  
At the end of the quarter, our net cash position (cash and other
current investments less total borrowings) amounted to $121 million.  
Conference call 
Tenaris will hold a conference call to discuss the above reported
results, on May 2, 2013, at 09:00 a.m. (Eastern Time). Following a
brief summary, the conference call will be opened to questions. To
access the conference call dial in +1 866 318.8618 within North
America or +1 617 399.5137 Internationally. The access number is
"70135173." Please dial in 10 minutes before the scheduled start
time. The conference call will be also available by webcast at
www.tenaris.com/investors  
A replay of the conference call will be available on our webpage
http://ir.tenaris.com/ or by phone from 12:00 pm on May 2 through
12:00 am on May 9. To access the replay by phone, please dial +1 888
286.8010 or +1 617 801.6888 and enter passcode "88385058" when
prompted. 
Some of the statements contained in this press release are
"forward-looking statements." Forward-looking statements are based on
management's current views and assumptions and involve known and
unknown risks that could cause actual results, performance or events
to differ materially from those expressed or implied by those
statements. These risks include but are not limited to risks arising
from uncertainties as to future oil and gas prices and their impact
on investment programs by oil and gas companies. 


 
                                                                            
                                                                            
Consolidated Condensed Interim Income Statement                             
                                                                            
                                                  Three-month period ended  
(all amounts in thousands of U.S. dollars)                March 31,         
                                                     2013          2012     
                                                 ------------  ------------ 
Continuing operations                                     Unaudited         
Net sales                                           2,678,305     2,617,349 
Cost of sales                                      (1,645,432)   (1,611,097)
                                                 ------------  ------------ 
Gross profit                                        1,032,873     1,006,252 
Selling, general and administrative expenses         (475,565)     (444,143)
Other operating income (expense) net                   (3,723)        4,092 
                                                 ------------  ------------ 
Operating income                                      553,585       566,201 
Interest income                                         6,081         9,583 
Interest expense                                      (13,909)       (9,925)
Other financial results                                (1,381)       13,081 
                                                 ------------  ------------ 
Income before equity in earnings of associated                              
 companies and income tax                             544,376       578,940 
Equity in earnings of associated companies             12,197        13,963 
                                                 ------------  ------------ 
Income before income tax                              556,573       592,903 
Income tax                      
                     (133,856)     (144,674)
                                                 ------------  ------------ 
Income for the period                                 422,717       448,229 
                                                 ============  ============ 
                                                                            
                                                                            
Attributable to:                                                            
Owners of the parent                                  424,777       438,641 
Non-controlling interests                              (2,060)        9,588 
                                                 ------------  ------------ 
                                                      422,717       448,229 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
Consolidated Condensed Interim Statement of Financial Position              
                                                                            
(all amounts in thousands of                                                
 U.S. dollars)                  At March 31, 2013      At December 31, 2012 
                             ----------------------- -----------------------
                                    Unaudited                               
ASSETS                                                                      
Non-current assets                                                          
  Property, plant and                                                       
   equipment, net              4,490,305               4,434,970            
  Intangible assets, net       3,161,011               3,199,916            
  Investments in associated                                                 
   companies                     985,230                 977,011            
  Other investments                2,532                   2,603            
  Deferred tax assets            201,599                 215,867            
  Receivables                    128,921   8,969,598     142,060   8,972,427
                             -----------             -----------            
                                                                            
Current assets                                                              
  Inventories                  2,894,456               2,985,805            
  Receivables and                                                           
   prepayments                   256,572                 260,532            
  Current tax assets             141,359                 175,562            
  Trade receivables            2,076,099               2,070,778            
  Available for sale assets       21,572                  21,572            
  Other investments              802,991                 644,409            
  Cash and cash equivalents      948,777   7,141,826     828,458   6,987,116
                             ----------- ----------- ----------- -----------
Total assets                              16,111,424              15,959,543
                                         ===========             ===========
                                                                            
EQUITY                                                                      
Capital and reserves                                                        
 attributable to owners of                                                  
 the parent                               11,735,821              11,328,031
Non-controlling interests                    156,648                 171,561
                                         -----------             -----------
Total equity                              11,892,469              11,499,592
                                         ===========             ===========
                                                                            
LIABILITIES                                                                 
Non-current liabilities                                                     
  Borrowings                     491,049                 532,407            
  Deferred tax liabilities       696,401                 728,541            
  Other liabilities              308,084                 302,444            
  Provisions                      72,555   1,568,089      67,185   1,630,577
                             -----------             -----------            
                                                                            
                                                                            
Current liabilities                                                         
  Borrowings                   1,139,799               1,211,785            
  Current tax liabilities        242,836                 254,603            
  Other liabilities              333,917                 318,828            
  Provisions                      24,889                  26
,958            
  Customer advances               92,409                 134,010            
  Trade payables                 817,016   2,650,866     883,190   2,829,374
                             ----------- ----------- ----------- -----------
Total liabilities                          4,218,955               4,459,951
                                         ===========             ===========
Total equity and liabilities              16,111,424              15,959,543
                                         ===========             ===========
                                                                            
                                                                            
                                                                            
Consolidated Condensed Interim Statement of Cash Flows                      
                                                                            
                                                  Three-month period ended  
                                                          March 31,         
                                                 -------------------------- 
(all amounts in thousands of U.S. dollars)           2013          2012     
                                                 ------------  ------------ 
                                                          Unaudited         
Cash flows from operating activities                                        
Income for the period                                 422,717       448,229 
Adjustments for:                                                            
Depreciation and amortization                         145,370       138,159 
Income tax accruals less payments                      15,213        49,495 
Equity in earnings of associated companies            (12,197)      (13,963)
Interest accruals less payments, net                  (30,725)      (18,293)
Changes in provisions                                   3,134        (8,131)
Changes in working capital                             16,321        (1,796)
Other, including currency translation adjustment        3,578        14,237 
                                                 ------------  ------------ 
Net cash provided by operating activities             563,411       607,937 
                                                 ============  ============ 
                                                                            
Cash flows from investing activities                                        
Capital expenditures                                 (183,885)     (196,395)
Acquisition of associated companies                         -      (504,597)
                                                                            
Proceeds from disposal of property, plant and                               
 equipment and intangible assets                        4,386         1,532 
Dividends received from associated companies            1,196             - 
Changes in investments in short terms securities     (158,582)       10,583 
                                                 ------------  ------------ 
Net cash used in investing activities                (336,885)     (688,877)
                                                 ============  ============ 
                                                                            
Cash flows from financing activities                                        
                                                                            
Dividends paid to non-controlling interest in                               
 subsidiaries                                         (16,671)         (905)
Acquisitions of non-controlling interests                (538)          (12)
Proceeds from borrowings                              625,732       545,779 
Repayments of borrowings                             (677,045)     (237,103)
                                                 ------------  ------------ 
Net cash used in financing activities                 (68,522)      307,759 
                                                 ============  ============ 
                                                                            
                                                 ============  ============ 
Increase in cash and cash equivalents                 158,004       226,819 
                                                 ============  ============ 
                                                                            
Movement in cash and cash equivalents                                       
At the beginning of the period                        772,656       815,032 
Effect of exchange rate changes                        (5,106)       18,708 
Increase in cash and cash equivalents                 158,004       226,819 
                                                 ------------  ------------ 
At March 31,                                          925,554     1,060,559 
                                                 ============  ============ 
                                                                            
                                                 -------------------------- 
                                                        At March 31,        
                                                 -------------------------- 
Cash and cash equivalents                            2013          2012     
                                                 ------------  ------------ 
                                                                            
Cash and bank deposits                                948,777     1,076,803 
Bank overdrafts                                       (23,223)      (16,244)
                                                 ------------  ------------ 
                                                      925,554     1,060,559 
                                                 ============  ============ 

  
Giovanni Sardagna 
Tenaris
1-888-300-5432
www.tenaris.com 
 
 
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