Tenaris Announces 2009 Second Quarter Results
(Thomson Reuters ONE) - The Financial and Operational Information Contained in This PressRelease Is Based on Unaudited Consolidated Condensed InterimFinancial Statements Presented in U.S. Dollars (US$) and Prepared inAccordance With International Financial Reporting Standards (IFRS),as Issued by the International Accounting Standard Board (IASB) andAdopted by the European UnionLUXEMBOURG -- (MARKET WIRE) -- 08/05/09 -- Tenaris S.A. (NYSE: TS)(BAE: TS) (MXSE: TS) (MILAN: TEN) ("Tenaris") today announced itsresults for the quarter and semester ended June 30, 2009 withcomparison to its results for the quarter and semester ended June 30,2008.Summary of 2009 Second Quarter Results(Comparison with first quarter of 2009 and second quarter of 2008) Q2 2009 Q1 2009 Q2 2008 ------- ------- -------Net sales (US$ million) 2,096.3 2,434.3 (14%) 3,110.1 (33%)Operating income (US$ million) 436.8 685.6 (36%) 816.0 (46%)Net income (US$ million) 336.4 393.1 (14%) 1,030.0 (67%)Shareholders' net income (US$ million) 343.3 366.0 (6%) 987.5 (65%)Earnings per ADS (US$) 0.58 0.62 (6%) 1.67 (65%)Earnings per share (US$) 0.29 0.31 (6%) 0.84 (65%)EBITDA (US$ million) 563.1 807.4 (30%) 948.3 (41%)EBITDA margin (% of net sales) 27% 33% 30%Our results in the second quarter reflect significantly lower demandfor our products and services in the light of the evolving globaleconomic crisis and its impact on the activities of our customers.Shipments of tubular products fell 47% year on year and 19%sequentially, with the US and European markets being particularlyaffected. Our operating margins, particularly in our North Americanwelded pipe operations, are being affected by very low productionlevels and our decision to maintain our industrial system and humanresources prepared for the future recovery in demand. Our net incomedecreased 67% compared to the second quarter of 2008, however asignificant part of this decrease is related to one-off gainsrecorded on the sale of subsidiaries in the second quarter of lastyear. Our net income for continuing operations, declined 44% comparedto the second quarter of 2008. However, our cash flow from operationswas strong as we reduced our investment in working capital byUS$787.5 million. Consequently our net financial debt (totalfinancial debt less cash and other current investments) decreased byUS$659.8 million to US$121.9 million during the quarter after payinga dividend of US$354.2 million in June.During the quarter, we re-presented the results of our Venezuelanoperations that are in the process of being nationalized asdiscontinued operations.Market Background and OutlookFollowing their collapse in the second half of 2008 to a low ofaround US$30 per barrel at the end of the year, global oil priceshave risen during the first half of 2009 and have reached the levelof US$60-70 per barrel. This reflects increased optimism for arecovery in global economic growth led by China together with anexpected decline in non-OPEC production and ongoing OPEC actions tocut production. North American gas prices, however, have fallenduring the first half of 2009 to current levels of around US$3.50 permillion BTU as the carry over of 2008 US production increasescombined with reduced demand has resulted in high levels of gas instorage.The international count of active drilling rigs, as published byBaker Hughes, continued to decline during the second quarter. Itaveraged 982 during the second quarter of 2009, 4% lower than thefirst quarter of 2009 and 9% lower than the same quarter of theprevious year. The corresponding rig count in USA, which is moresensitive to North American gas prices, fell sharply in the firsthalf and is now down 56% from its high in September 2008 but hasshown signs of stabilizing in recent weeks. It averaged 936 duringthe second quarter, 29% lower than the first quarter of 2009 and 50%lower than the second quarter of 2008. In Canada, the correspondingrig count, which is affected by seasonal drilling patterns, averaged90 during the quarter, a decrease of 47% compared to second quarterof 2008 and its lowest level since 1993.Demand for our pipes from the global energy industry has beenaffected by the decline in oil and gas drilling activity and theactions taken by customers to adjust to reduced cash flows and a lessfavorable market outlook, including procurement delays andcancellations and the postponement of new project activity. Demand inthe US and Canada has been further affected by extraordinarily highlevels of OCTG inventories. Demand for pipes from the industrial andpower generation segments remain at low levels.We expect shipments for our large-diameter pipes for pipelineprojects in South America, in the second half of the year, to remainclose to the levels shown during the first half, however the orderbacklog continues to decline as new projects are postponed.Steel and steelmaking raw material costs have stabilized and inrecent weeks have shown some increase. However our costs,particularly at our North American welded pipe operations, willcontinue to be adversely affected by low production levels and thehigh cost of raw material inventories procured under different marketconditions, partially offset by the actions taken to reduce ourstructural costs.With low levels of demand likely to persist until the end of the yearand prices adjusting downwards we expect that our sales and operatingincome will be lower in the second half of the year than the first.We expect that there will be a recovery in our shipments going into2010 but that our revenues may not recover to the same extentconsidering the lagged effect of price declines in our results.Analysis of 2009 Second Quarter ResultsSales volume (metric tons) Q2 2009 Q2 2008 Increase/(Decrease)------------------------- ------- --------- ------------------Tubes - Seamless 497,000 771,000 (36%)Tubes - Welded 65,000 270,000 (76%)Tubes - Total 562,000 1,041,000 (46%)Projects - Welded 90,000 170,000 (47%)Total 652,000 1,211,000 (46%)Tubes Q2 2009 Q2 2008 Increase/(Decrease)----- ------- ------- ------------------(Net sales - $ million)North America 661.0 986.5 (33%)South America 244.9 304.1 (19%)Europe 222.3 480.8 (54%)Middle East & Africa 452.7 565.6 (20%)Far East & Oceania 137.8 187.1 (26%)Total net sales ($ million) 1,718.7 2,524.1 (32%)Cost of sales (% of sales) 57% 56%Operating income ($ million) 385.0 706.2 (45%)Operating income (% of sales) 22% 28%Net sales of tubular products and services decreased 32% toUS$1,718.7 million in the second quarter of 2009, compared toUS$2,524.1 million in the second quarter of 2008, as a 46% decreasein volumes was partially offset by higher average selling prices. InNorth America, although demand remained firm in Mexico, it declinedprecipitously in the USA as it was affected by the decline indrilling activity and by the extraordinary high level of OCTGinventories following the previous surge in imports from China. Salesin South America were affected by lower demand in Venezuela andArgentina. In Europe, sales were affected by lower demand from theindustrial sector, lower demand from distributors serving the processplant sector and lower sales of OCTG in Romania. Sales in the MiddleEast and Africa were affected by lower sales of OCTG products inNorth Africa and the Caspian region. Sales in the Far East & Oceaniawere lower throughout the region.Projects Q2 2009 Q2 2008 Increase/(Decrease)-------- ------- ------- ------------------Net sales ($ million) 254.4 368.1 (31%)Cost of sales (% of sales) 75% 71%Operating income ($ million) 45.5 77.6 (41%)Operating income (% of sales) 18% 21%Net sales of pipes for pipeline projects decreased 31% to US$254.4million in the second quarter of 2009, compared to US$368.1 millionin the second quarter of 2008, reflecting a decrease in shipments togas and other pipeline projects in Brazil and Argentina, partiallyoffset by higher average selling prices.Others Q2 2009 Q2 2008 Increase/(Decrease)------ ------- ------- ------------------Net sales ($ million) 123.2 218.0 (43%)Cost of sales (% of sales) 78% 72%Operating income ($ million) 6.3 32.5 (81%)Operating income (% of sales) 5% 15%Net sales of other products and services decreased 43% to US$123.2million in the second quarter of 2009, compared to US$218.0 millionin the second quarter of 2008. Although demand for our Brazilianindustrial equipment business remained firm, demand for our U.S.electric conduit business was substantially lower and sales of suckerrods were affected by lower activity. Our Venezuelan HBI operationwas re-presented as discontinued operation.Selling, general and administrative expenses, or SG&A, increased as apercentage of net sales to 18.9% in the quarter ended June 30, 2009,compared to 15.1% in the corresponding quarter of 2008, mainly due tothe effect of fixed and semi-fixed expenses over lower revenues.Net interest expenses decreased to US$16.3 million in the secondquarter of 2009 compared to US$17.5 million in the same period of2008, as we reduced our net debt.Other financial results generated a loss of US$15.9 million duringthe second quarter of 2009, compared to a gain of US$4.2 millionduring the second quarter of 2008. These results largely reflectgains and losses on net foreign exchange transactions and the fairvalue of derivative instruments and are partially offset by changesto our net equity position. These gains and losses are mainlyattributable to variations in the exchange rates between oursubsidiaries' functional currencies (other than the US dollar) andthe US dollar, in accordance with IFRS.Equity in earnings of associated companies generated a gain ofUS$66.5 million in the second quarter of 2009, compared to a gain ofUS$48.1 million in the second quarter of 2008. These gains werederived mainly from our equity investment in Ternium.Income tax charges totalled US$114.5 million in the second quarter of2009, equivalent to 28% of income before equity in earnings ofassociated companies and income tax, compared to US$219.3 million inthe second quarter of 2008, equivalent to 27% of income before equityin earnings of associated companies and income tax. Our tax rate forthe quarter was lower than the one posted in the first quarter, as weincurred losses in subsidiaries located in countries with higher thanaverage tax rates. The result in the second quarter of 2008 benefitedfrom a tax reduction equivalent to US$28.3 million incurred on thereversal of deferred taxes in Italy due to the anticipated payment oftaxes at a reduced rate.Results for discontinued operations generated a loss of US$20.2million in the second quarter of 2009, related to our businesses inVenezuela that are in the process of being nationalized. In thesecond quarter of 2008, we registered a gain of US$398.5 million, outof which US$394.3 million were from the sale of Hydril's pressurecontrol business.Results attributable to minority interest amounted to a loss ofUS$6.8 million in the second quarter of 2009, as losses were incurredat our NKKTubes subsidiary and at our Venezuelan subsidiaries,partially offset by the results at our Confab subsidiary. Secondquarter 2008 minority interest amounted to US$42.6 mainly reflectingpositive results at Confab and NKKTubes.Cash Flow and LiquidityNet cash provided by operations during the second quarter of 2009 wasUS$1.1 billion (US$1.9 billion in the first half), compared toUS$274.0 million in the second quarter of 2008 (US$842.9 million inthe first half). Working capital decreased by US$787.5 million duringthe second quarter, as we reduced our trade receivables by US$498.4million and our inventories by US$412.9 million, which was partiallyoffset by a decrease in trade payables and customer advancesamounting to US$117.0 million.Capital expenditures amounted to US$106.5 million in the secondquarter of 2009 ($226.3 million in the first half), compared toUS$116.9 million in the second quarter of 2008 (US$205.4 million inthe first half).During the first half of 2009, total financial debt decreased byUS$1.0 billion to US$2.0 billion at June 30, 2009 from US$3.0 billionat December 31, 2008. Net financial debt during the first half of2009 decreased by US$1.3 billion to US$121.9 million at June 30,2009.Analysis of 2009 First Half ResultsNet income attributable to equity holders in the company during thefirst semester of 2009 was US$709.3 million, or US$0.60 per share(US$1.20 per ADS), which compares with net income attributable toequity holders in the company during the first semester of 2008 ofUS$1,460.5 million, or US$1.24 per share (US$2.47 per ADS). Operatingincome was US$1,122.4 million, or 25% of net sales during the firstsemester of 2009, compared to US$1,524.6 million, or 27% of net salesduring the fist semester of 2008. Operating income plus depreciationand amortization for this semester was US$1,370.5 million, or 30% ofnet sales, compared to US$1,789.3 million, or 31% of net sales duringthe first semester of 2008.Sales volume (metric tons) H1 2009 H1 2008 Increase/(Decrease)------------------------- --------- --------- ------------------Tubes - Seamless 1,076,000 1,457,000 (26%)Tubes - Welded 175,000 552,000 (68%)Tubes - Total 1,251,000 2,009,000 (38%)Projects - Welded 174,000 302,000 (42%)Total 1,424,000 2,311,000 (38%)Tubes H1 2009 H1 2008 Increase/(Decrease)----- ------- ------- ------------------(Net sales - $ million)North America 1,676.8 1,819.1 (8%)South America 494.3 528.8 (7%)Europe 484.9 928.4 (48%)Middle East & Africa 848.0 1,041.3 (19%)Far East & Oceania 305.4 363.7 (16%)Total net sales ($ million) 3,809.4 4,681.2 (19%)Cost of sales (% of sales) 55% 55%Operating income ($ million) 1,026.3 1,342.0 (24%)Operating income (% of sales) 27% 29%Net sales of tubular products and services decreased 19% toUS$3,809.4 million in the first half of 2009, compared to US$4,681.2million in the first half of 2008, due to a sharp reduction involumes, which was partially offset by higher average selling prices,reflecting in part a higher proportion of sales of specializedhigh-end products.Projects H1 2009 H1 2008 Increase/(Decrease)-------- ------- ------- ------------------Net sales ($ million) 476.6 639.8 (26%)Cost of sales (% of sales) 72% 71%Operating income ($ million) 94.5 128.9 (27%)Operating income (% of sales) 20% 20%Net sales of pipes for pipeline projects decreased 26% to US$476.6million in the first half of 2009, compared to US$639.8 million inthe first half of 2008, reflecting lower deliveries in Brazil andArgentina to gas and other pipeline projects.Others H1 2009 H1 2008 Increase/(Decrease)------ ------- ------- ------------------Net sales ($ million) 244.7 389.4 (37%)Cost of sales (% of sales) 84% 72%Operating income ($ million) 1.6 53.7 (97%)Operating income (% of sales) 1% 14%Net sales of other products and services decreased 37% to US$244.7million in the first half of 2009, compared to US$389.4 million inthe first half of 2008, mainly reflecting lower sales of welded pipesfor electric conduits in the USA and sucker rods.Selling, general and administrative expenses, or SG&A, increased as apercentage of net sales to 17.3% in the semester ended June 30, 2009compared to 15.4% in the corresponding semester of 2008, mainly dueto the effect of fixed and semi-fixed expenses over lower revenues.Net interest expenses decreased to US$50.8 million in the first halfof 2009 compared to US$71.4 million in the same period of 2008reflecting a lower net debt position and lower interest rates.Other financial results recorded a loss of US$52.3 million during thefirst half of 2009, compared to a loss of US$9.6 million during thefirst half of 2008. These results largely reflect gains and losses onnet foreign exchange transactions and the fair value of derivativeinstruments and are partially offset by changes to our net equityposition. These gains and losses are mainly attributable tovariations in the exchange rates between our subsidiaries' functionalcurrency (other than the US dollar) and the US dollar, in accordancewith IFRS.Equity in earnings of associated companies generated a gain ofUS$57.9 million in the first half of 2009, compared to a gain ofUS$98.0 million in the first half of 2008. These gains were derivedmainly from our equity investment in Ternium.Income tax charges totalled US$319.6 million in the first half of2009, equivalent to 31% of income before equity in earnings ofassociated companies and income tax, compared to US$428.5 million inthe first half of 2008, equivalent to 30% of income before equity inearnings of associated companies and income tax.Income from discontinued operations amounted to a loss of US$28.1million in the first half of 2009 corresponding to our Venezuelanoperations that are being nationalized, compared to a gain ofUS$416.9 million in the corresponding period of 2008, of whichUS$394.3 million corresponded to the result of the sale of Hydril'spressure control business.Income attributable to minority interest amounted to US$20.2 millionin the first half of 2009, compared to US$69.5 million in thecorresponding semester of 2008, mainly reflecting lower results atNKKTubes and at our Venezuelan subsidiaries.Some of the statements contained in this press release are"forward-looking statements." Forward-looking statements are based onmanagement's current views and assumptions and involve known andunknown risks that could cause actual results, performance or eventsto differ materially from those expressed or implied by thosestatements. These risks include but are not limited to risks arisingfrom uncertainties as to future oil and gas prices and their impacton investment programs by oil and gas companies.Press releases and financial statements can be downloaded fromTenaris's website at www.tenaris.com/investors.Consolidated Condensed Interim Income Statement(all amounts in thousands of U.S. dollars, unless Three-month period Six-month period otherwise stated) ended June 30, ended June 30, ---------------------- ---------------------- 2009 2008 2009 2008 ---------- ---------- ---------- ----------Continuing operations (Unaudited) (Unaudited)Net sales 2,096,344 3,110,103 4,530,632 5,710,424Cost of sales (1,264,899) (1,820,717) (2,628,211) (3,302,831) ---------- ---------- ---------- ----------Gross profit 831,445 1,289,386 1,902,421 2,407,593Selling, general and administrative expenses (395,926) (469,669) (783,006) (878,038)Other operating income (expense), net 1,278 (3,708) 3,024 (4,947) ---------- ---------- ---------- ----------Operating income 436,797 816,009 1,122,439 1,524,608Interest income 8,163 16,493 12,737 28,681Interest expense (24,435) (33,962) (63,582) (100,124)Other financial results (15,907) 4,235 (52,266) (9,572) ---------- ---------- ---------- ----------Income before equity in earnings of associated companies and income tax 404,618 802,775 1,019,328 1,443,593Equity in earnings of associated companies 66,514 48,102 57,935 97,963 ---------- ---------- ---------- ----------Income before income tax 471,132 850,877 1,077,263 1,541,556Income tax (114,518) (219,339) (319,592) (428,464) ---------- ---------- ---------- ----------Income for continuing operations 356,614 631,538 757,671 1,113,092Discontinued operationsResult for discontinued operations (20,176) 398,497 (28,138) 416,906 ---------- ---------- ---------- ----------Income for the period 336,438 1,030,035 729,533 1,529,998Attributable to:Equity holders of the Company 343,268 987,471 709,315 1,460,514Minority interest (6,830) 42,564 20,218 69,484 ---------- ---------- ---------- ---------- 336,438 1,030,035 729,533 1,529,998 ---------- ---------- ---------- ----------Consolidated Condensed Interim Statement of Financial Position(all amounts in thousands of U.S. dollars) At June 30, 2009 At December 31, 2008 ----------------------- ---------------------- (Unaudited)ASSETSNon-current assets Property, plant and equipment, net 3,122,122 2,982,871 Intangible assets, net 3,736,821 3,826,987 Investments in associated companies 575,628 527,007 Other investments 29,488 38,355 Deferred tax assets 217,686 390,323 Receivables 84,595 7,766,340 82,752 7,848,295 ----------- -----------Current assets Inventories 2,150,785 3,091,401 Receivables and prepayments 228,791 251,481 Current tax assets 203,244 201,607 Trade receivables 1,536,984 2,123,296 Available for sale assets 21,572 - Other investments 273,450 45,863 Cash and cash equivalents 1,622,908 6,037,734 1,538,769 7,252,417 ----------- ----------- ----------- -----------Total assets 13,804,074 15,100,712EQUITYCapital and reserves attributable to the Company's equity holders 8,637,036 8,176,571Minority interest 569,535 525,316 ----------- -----------Total equity 9,206,571 8,701,887LIABILITIESNon-current liabilities Borrowings 998,251 1,241,048 Deferred tax liabilities 867,000 1,053,838 Other liabilities 209,365 223,142 Provisions 79,470 89,526 Trade payables 2,418 2,156,504 1,254 2,608,808 ----------- -----------Current liabilities Borrowings 1,019,972 1,735,967 Current tax liabilities 333,638 610,313 Other liabilities 247,478 242,620 Provisions 51,385 28,511 Customer advances 256,922 275,815 Trade payables 531,604 2,440,999 896,791 3,790,017 ----------- -----------Total liabilities 4,597,503 6,398,825Total equity and liabilities 13,804,074 15,100,712Consolidated Condensed Interim Cash Flow Statement (Unaudited) Three-month period ended Six-month period ended(all amounts in June 30, June 30, thousands of U.S. ------------------------ ------------------------ dollars) 2009 2008 2009 2008 ----------- ----------- ----------- -----------Cash flows from operating activitiesIncome for the period 336,438 1,030,035 729,533 1,529,998Adjustments for:Depreciation and amortization 126,320 134,390 248,061 268,873Income tax accruals less payments (179,194) (17,791) (329,690) 89,747Equity in earnings of associated companies (65,532) (48,102) (57,073) (98,096)Income from the sale of pressure control business - (394,323) (394,323)Interest accruals less payments, net (47,865) (62,202) (23,698) (7,894)Changes in provisions 25,675 7,747 14,200 15,243Changes in working capital 787,515 (326,894) 1,175,460 (545,614)Other, including currency translation adjustment 127,781 (48,874) 117,792 (15,017) ----------- ----------- ----------- -----------Net cash provided by operating activities 1,111,138 273,986 1,874,585 842,917 ----------- ----------- ----------- -----------Cash flows from investing activitiesCapital expenditures (106,506) (116,911) (226,335) (205,366)Acquisitions of subsidiaries and minority interest (67,593) (839) (73,535) (1,865)Proceeds from the sale of pressure control business 1,113,805 1,113,805Proceeds from disposal of property, plant and equipment and intangible assets 7,749 3,819 10,328 8,826Investments in short terms securities (210,337) (216,483) (227,587) (264,401)Dividends received 4,283 13,636 5,223 13,636Other - - - (3,428) ----------- ----------- ----------- -----------Net cash (used in) provided by investing activities (372,404) 797,027 (511,906) 661,207 ----------- ----------- ----------- -----------Cash flows from financing activitiesDividends paid (354,161) (295,134) (354,161) (295,134)Dividends paid to minority interest in subsidiaries (27,176) (55,136) (27,176) (55,136)Proceeds from borrowings 69,096 299,701 263,841 430,088Repayments of borrowings (808,801) (842,478) (1,149,484) (1,332,755) ----------- ----------- ----------- -----------Net cash used in financing activities (1,121,042) (893,047) (1,266,980) (1,252,937) ----------- ----------- ----------- -----------(Decrease) Increase in cash and cash equivalents (382,308) 177,966 95,699 251,187Movement in cash and cash equivalentsAt the beginning of the period 1,968,707 1,072,985 1,525,022 954,303Effect of exchange rate changes 31,992 68,098 (2,330) 113,559Decrease due to deconsolidation (9,696) - (9,696) -Increase in cash and cash equivalents (382,308) 177,966 95,699 251,187At June 30, 1,608,695 1,319,049 1,608,695 1,319,049Cash and cash equivalents At June 30, At June 30, ------------------------ ------------------------ 2009 2008 2009 2008Cash and bank deposits 1,622,908 1,337,838 1,622,908 1,337,838Bank overdrafts (14,213) (18,789) (14,213) (18,789) 1,608,695 1,319,049 1,608,695 1,319,049Contact: Giovanni Sardagna Tenaris 1-888-300-5432 www.tenaris.comThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 06.08.2009 - 00:50 Uhr
Sprache: Deutsch
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