Tenaris Announces 2024 Second Quarter Results
Tenaris S.A. (NYSE: TS) announced its Q2 2024 results, reporting net sales of $3,322 million, down 3% from Q1 2024 and 18% year-over-year. Net income decreased to $348 million, a 54% drop from Q1 2024 and 69% year-over-year. EBITDA margin fell to 19.6% from 28.7% in Q1 2024.
The company's performance was impacted by declining OCTG prices in the Americas and a $171 million provision for ongoing litigation. Despite challenges, Tenaris maintained a strong free cash flow of $774 million and a net cash position of $3.8 billion.
Outlook remains uncertain due to OPEC+ production cut rollbacks and high OCTG imports in the U.S. Tenaris expects Q3 results to be affected by lower activity in the U.S. and Latin America, as well as extended OCTG price declines in the Americas.
Tenaris S.A. (NYSE: TS) ha annunciato i risultati del secondo trimestre 2024, riportando vendite nette di 3.322 milioni di dollari, in calo del 3% rispetto al primo trimestre 2024 e del 18% rispetto all'anno precedente. Il reddito netto è sceso a 348 milioni di dollari, con una diminuzione del 54% rispetto al primo trimestre 2024 e del 69% su base annua. Il margine EBITDA è sceso al 19,6% dal 28,7% del primo trimestre 2024.
La performance dell'azienda è stata influenzata dai calo dei prezzi OCTG nelle Americhe e da una riserva di 171 milioni di dollari per contenziosi in corso. Nonostante le difficoltà, Tenaris ha mantenuto un forte flusso di cassa libero di 774 milioni di dollari e una posizione di cassa netta di 3,8 miliardi di dollari.
Le prospettive rimangono incerte a causa dei tagli alla produzione OPEC+ e degli elevati import di OCTG negli Stati Uniti. Tenaris prevede che i risultati del terzo trimestre saranno influenzati da una minore attività negli Stati Uniti e in America Latina, così come da ulteriori cali dei prezzi OCTG nelle Americhe.
Tenaris S.A. (NYSE: TS) anunció sus resultados del segundo trimestre de 2024, reportando ventas netas de 3.322 millones de dólares, una disminución del 3% en comparación con el primer trimestre de 2024 y del 18% en comparación con el año anterior. La utilidad neta disminuyó a 348 millones de dólares, una caída del 54% respecto al primer trimestre de 2024 y del 69% año sobre año. El margen EBITDA cayó al 19,6% desde el 28,7% en el primer trimestre de 2024.
El desempeño de la compañía se vio afectado por la disminución de precios de OCTG en las Américas y una provisión de 171 millones de dólares para litigios en curso. A pesar de los desafíos, Tenaris mantuvo un fuerte flujo de caja libre de 774 millones de dólares y una posición de caja neta de 3.800 millones de dólares.
Las perspectivas siguen siendo inciertas debido a las reducciones de producción de OPEC+ y las altas importaciones de OCTG en EE. UU. Tenaris espera que los resultados del tercer trimestre se vean afectados por una menor actividad en EE. UU. y América Latina, así como por caídas prolongadas en los precios de OCTG en las Américas.
Tenaris S.A. (NYSE: TS)는 2024년 2분기 결과를 발표하며 순매출 33억 2천200만 달러를 보고했습니다. 이는 2024년 1분기 대비 3% 감소한 것이며, 전년 대비 18% 감소한 수치입니다. 순이익은 3억 4천800만 달러로 감소했으며, 이는 2024년 1분기 대비 54% 감소하고 전년 대비 69% 감소한 것입니다. EBITDA 마진은 2024년 1분기의 28.7%에서 19.6%로 떨어졌습니다.
회사의 실적은 미주 지역의 OCTG 가격 하락과 진행 중인 소송을 위한 1억 7천100만 달러의 충당금강력한 자유 현금 흐름을 7억 7천400만 달러로 유지하였고, 순 현금 보유액은 38억 달러에 달했습니다.
OPEC+의 생산 감축 철회와 미국의 높은 OCTG 수입으로 인해 전망은 불확실한 상태입니다. Tenaris는 미국 및 라틴 아메리카의 활동 감소와 미주 지역의 OCTG 가격 하락 지속으로 인해 3분기 결과에 영향을 줄 것으로 예상하고 있습니다.
Tenaris S.A. (NYSE: TS) a annoncé ses résultats du deuxième trimestre 2024, signalant des ventes nettes de 3,322 milliards de dollars, en baisse de 3 % par rapport au premier trimestre 2024 et de 18 % par rapport à l'année précédente. Le résultat net a diminué à 348 millions de dollars, soit une chute de 54 % par rapport au premier trimestre 2024 et de 69 % sur un an. La marge EBITDA est tombée à 19,6 % contre 28,7 % au premier trimestre 2024.
La performance de la société a été affectée par la baisse des prix de l'OCTG en Amérique et une provision de 171 millions de dollars pour des litiges en cours. Malgré ces défis, Tenaris a maintenu un solide flux de trésorerie libre de 774 millions de dollars et une position de trésorerie nette de 3,8 milliards de dollars.
Les perspectives restent incertaines en raison des réductions de production de l'OPEP+ et des importations élevées d'OCTG aux États-Unis. Tenaris s'attend à ce que les résultats du troisième trimestre soient affectés par une activité réduite aux États-Unis et en Amérique latine, ainsi que par de nouvelles baisses des prix de l'OCTG en Amérique.
Tenaris S.A. (NYSE: TS) hat seine Ergebnisse für das 2. Quartal 2024 bekannt gegeben, mit netto Umsätzen von 3.322 Millionen USD, was einem Rückgang von 3% im Vergleich zum 1. Quartal 2024 und 18% im Jahresvergleich entspricht. Der Nettogewinn sank auf 348 Millionen USD, ein Rückgang von 54% im Vergleich zum 1. Quartal 2024 und 69% im Jahresvergleich. Die EBITDA-Marge fiel von 28,7% im 1. Quartal 2024 auf 19,6%.
Die Leistung des Unternehmens wurde durch sinkende OCTG-Preise in den Amerikas und eine Rückstellung von 171 Millionen USD für anhängige Rechtsstreitigkeiten beeinträchtigt. Trotz dieser Herausforderungen konnte Tenaris eine starke freie Cashflow von 774 Millionen USD und eine netto Cash-Position von 3,8 Milliarden USD aufrechterhalten.
Die Aussichten bleiben aufgrund von OPEC+-Produktionskürzungen und hohen OCTG-Importen in den USA unsicher. Tenaris erwartet, dass die Ergebnisse des 3. Quartals durch geringere Aktivitäten in den USA und in Lateinamerika sowie durch anhaltende Preisrückgänge bei OCTG in den Amerikas beeinträchtigt werden.
- Strong free cash flow of $774 million in Q2 2024
- Maintained a robust net cash position of $3.8 billion
- Resilient sales in the Middle East, United States, and offshore regions
- Favorable product mix offsetting price declines in some regions
- Net sales decreased 3% quarter-over-quarter and 18% year-over-year
- Net income dropped 54% from Q1 2024 and 69% year-over-year
- EBITDA margin declined to 19.6% from 28.7% in Q1 2024
- $171 million provision for ongoing litigation impacting results
- Declining OCTG prices in the Americas affecting margins
- Expected lower activity in the U.S. and Latin America for Q3 2024
Insights
Tenaris' Q2 2024 results reveal a mixed financial picture with some concerning trends. Net sales decreased by 3% quarter-over-quarter and 18% year-over-year to
The EBITDA margin contracted sharply to
On a positive note, Tenaris maintained a strong financial position with free cash flow of
Looking ahead, Tenaris faces headwinds in the Americas, with declining OCTG prices and inventory buildups. The company expects Q3 results to be further impacted by lower activity in the US and Latin America, as well as planned maintenance stoppages. Management is taking cost-reduction measures to address these challenges.
Overall, while Tenaris maintains a solid balance sheet, the declining margins and challenging market conditions warrant close monitoring by investors.
The global oil and gas market landscape presents a complex picture for Tenaris. While the overall outlook for oil demand and supply remains solid, there are several factors creating uncertainty:
- The announced rollback of OPEC+ voluntary production cuts has introduced some market volatility.
- In the US, high OCTG imports, industry consolidation, low natural gas prices and high financing costs for smaller operators are affecting drilling activity.
- Political and economic instability in Mexico and Argentina is impacting drilling activity in these key Latin American markets.
- Delays in pipeline infrastructure investment are hindering the development of Argentina's Vaca Muerta shale play.
On the positive side, demand from offshore developments and gas drilling associated with LNG projects remains strong going into 2025. This is particularly evident in Tenaris' robust sales in the Middle East, Gulf of Mexico and other offshore regions.
The OCTG market in the Americas is showing signs of oversupply, with rising inventories and falling prices. This trend is likely to continue in the near term, putting pressure on Tenaris' margins in these key markets.
To navigate these challenges, Tenaris is focusing on cost reduction, improving competitiveness and aligning its industrial system with current market realities. The company's strong presence in diverse global markets may help offset some of the weakness in the Americas, but the overall market environment suggests caution in the coming quarters.
The Q2 2024 results highlight a significant legal issue that investors should be aware of. Tenaris has recorded a
- It reduced the EBITDA by
$171 million , bringing it down to$650 million from what would have been$821 million . - The provision is included in 'other operating results', which showed a loss of
$170 million in Q2 2024, compared to a gain of$12 million in Q1 2024. - Additionally, there's an
$83 million loss from this litigation recorded in the 'equity in (losses) earnings of non-consolidated companies', related to Tenaris' investment in Ternium.
The total impact of this litigation on Q2 results amounts to
This legal issue introduces an element of uncertainty and potential future financial risk. Investors should closely monitor any developments related to this litigation, as it could have further implications for Tenaris' financial performance and its relationship with Usiminas and Ternium. The company's decision to make such a significant provision suggests that there's a material risk of an unfavorable outcome in this legal matter.
The financial and operational information contained in this press release is based on unaudited consolidated condensed interim financial statements presented in U.S. dollars and prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board and adopted by the European Union, or IFRS. Additionally, this press release includes non-IFRS alternative performance measures i.e., EBITDA, Free Cash Flow, Net cash / debt and Operating working capital days. See exhibit I for more details on these alternative performance measures.
LUXEMBOURG, July 31, 2024 (GLOBE NEWSWIRE) -- Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) (“Tenaris”) today announced its results for the quarter ended June 30, 2024 in comparison with its results for the quarter ended June 30, 2023.
Summary of 2024 Second Quarter Results
(Comparison with first quarter of 2024 and second quarter of 2023)
| 2Q 2024 | 1Q 2024 | 2Q 2023 | ||||||||
| Net sales ($ million) | 3,322 | 3,442 | (3 | %) | 4,075 | (18 | %) | |||
| Operating income ($ million) | 512 | 812 | (37 | %) | 1,278 | (60 | %) | |||
| Net income ($ million) | 348 | 750 | (54 | %) | 1,136 | (69 | %) | |||
| Shareholders’ net income ($ million) | 335 | 737 | (55 | %) | 1,123 | (70 | %) | |||
| Earnings per ADS ($) | 0.59 | 1.27 | (54 | %) | 1.90 | (69 | %) | |||
| Earnings per share ($) | 0.29 | 0.64 | (54 | %) | 0.95 | (69 | %) | |||
| EBITDA* ($ million) | 650 | 987 | (34 | %) | 1,409 | (54 | %) | |||
| EBITDA margin (% of net sales) | 19.6 | % | 28.7 | % | 34.6 | % | ||||
*EBITDA in 2Q 2024 includes a
Net sales in the second quarter were more resilient than expected with shipments remaining at a high level in the Middle East, the United States and in offshore regions, while average selling prices benefited from a favorable mix of products. Margins, however, were affected by the ongoing decline in OCTG prices in the Americas, and net income was affected by an extraordinary provision recorded in other operating income and expenses.
During the quarter, our free cash flow amounted to
Market Background and Outlook
The outlook for oil demand and supply remains solid even if the announced rollback of OPEC+ voluntary production cuts has introduced some uncertainty.
OCTG imports into the United States have remained high through the year, while oil and gas drilling activity is being affected by ongoing industry consolidation, low natural gas prices and high financing costs for smaller operators. OCTG inventories have risen and prices continue to fall.
Political and economic volatility is affecting drilling activity in Mexico and Argentina, and there are delays in defining the pipeline infrastructure investment required to further develop the prolific Vaca Muerta shale.
In the rest of the world, demand from offshore developments and for gas drilling associated with LNG projects remains supportive going into 2025.
In the third quarter, our sales and EBITDA will be affected by lower activity in the United States and Latin America and the extended decline in OCTG prices in the Americas. As anticipated, we will have maintenance stoppages at many of our mills, including the installation of a new furnace at our Siderca steel shop.
Considering this environment, we are acting to reduce costs, increase competitiveness and align our industrial system.
Analysis of 2024 Second 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) | 2Q 2024 | 1Q 2024 | 2Q 2023 | ||||
| Seamless | 805 | 777 | 4 | % | 844 | (5 | %) |
| Welded | 228 | 269 | (15 | %) | 255 | (11 | %) |
| Total | 1,033 | 1,046 | (1 | %) | 1,099 | (6 | %) |
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 | 2Q 2024 | 1Q 2024 | 2Q 2023 | |||||||
| (Net sales - $ million) | ||||||||||
| North America | 1,410 | 1,488 | (5 | %) | 2,142 | (34 | %) | |||
| South America | 582 | 614 | (5 | %) | 893 | (35 | %) | |||
| Europe | 267 | 226 | 18 | % | 270 | (1 | %) | |||
| Asia Pacific, Middle East and Africa | 810 | 804 | 1 | % | 612 | 32 | % | |||
| Total net sales ($ million) | 3,069 | 3,132 | (2 | %) | 3,918 | (22 | %) | |||
| Operating income ($ million) | 449 | 769 | (42 | %) | 1,251 | (64 | %) | |||
| Operating margin (% of sales) | 14.6 | % | 24.6 | % | 31.9 | % | ||||
Net sales of tubular products and services decreased
Operating results from tubular products and services amounted to a gain of
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 | 2Q 2024 | 1Q 2024 | 2Q 2023 | |||||||
| Net sales ($ million) | 253 | 310 | (18 | %) | 157 | 61 | % | |||
| Operating income ($ million) | 62 | 42 | 47 | % | 27 | 129 | % | |||
| Operating margin (% of sales) | 24.7 | % | 13.7 | % | 17.3 | % | ||||
Net sales of other products and services decreased
Selling, general and administrative expenses, or SG&A, amounted to
Other operating results amounted to a loss of
Financial results amounted to a gain of
Equity in (losses) earnings of non-consolidated companies generated a loss of
Income tax charge amounted to
Cash Flow and Liquidity of 2024 Second Quarter
Net cash generated by operating activities during the second quarter of 2024 was
With capital expenditures of
Analysis of 2024 First Half Results
| 6M 2024 | 6M 2023 | Increase/(Decrease) | ||||
| Net sales ($ million) | 6,763 | 8,216 | (18 | %) | ||
| Operating income ($ million) | 1,323 | 2,630 | (50 | %) | ||
| Net income ($ million) | 1,098 | 2,265 | (52 | %) | ||
| Shareholders’ net income ($ million) | 1,072 | 2,252 | (52 | %) | ||
| Earnings per ADS ($) | 1.87 | 3.81 | (51 | %) | ||
| Earnings per share ($) | 0.93 | 1.91 | (51 | %) | ||
| EBITDA* ($ million) | 1,637 | 2,886 | (43 | %) | ||
| EBITDA margin (% of net sales) | 24.2 | % | 35.1 | % | ||
*EBITDA in 6M 2024 includes a
Our sales in the first half of 2024 decreased
Cash flow provided by operating activities amounted to
The following table shows our net sales by business segment for the periods indicated below:
| Net sales ($ million) | 6M 2024 | 6M 2023 | Increase/(Decrease) | |||||
| Tubes | 6,200 | 92 | % | 7,892 | 96 | % | (21 | %) |
| Others | 563 | 8 | % | 324 | 4 | % | 74 | % |
| Total | 6,763 | 8,216 | (18 | %) | ||||
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) | 6M 2024 | 6M 2023 | Increase/(Decrease) | ||
| Seamless | 1,582 | 1,684 | (6 | %) | |
| Welded | 496 | 538 | (8 | %) | |
| Total | 2,078 | 2,222 | (6 | %) | |
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 | 6M 2024 | 6M 2023 | Increase/(Decrease) | |||
| (Net sales - $ million) | ||||||
| North America | 2,896 | 4,371 | (34 | %) | ||
| South America | 1,196 | 1,868 | (36 | %) | ||
| Europe | 493 | 522 | (6 | %) | ||
| Asia Pacific, Middle East and Africa | 1,614 | 1,131 | 43 | % | ||
| Total net sales ($ million) | 6,200 | 7,892 | (21 | %) | ||
| Operating income ($ million) | 1,219 | 2,563 | (52 | %) | ||
| Operating margin (% of sales) | 19.7 | % | 32.5 | % | ||
Net sales of tubular products and services decreased
Operating results from tubular products and services amounted to a gain of
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 | 6M 2024 | 6M 2023 | Increase/(Decrease) | |||
| Net sales ($ million) | 563 | 324 | 74 | % | ||
| Operating income ($ million) | 105 | 67 | 57 | % | ||
| Operating margin (% of sales) | 18.6 | % | 20.6 | % | ||
Net sales of other products and services increased
Operating results from other products and services amounted to a gain of
Selling, general and administrative expenses, or SG&A, amounted to
Other operating results amounted to a loss of
Financial results amounted to a gain of
Equity in (losses) earnings of non-consolidated companies generated a loss of
Income tax amounted to a charge of
Cash Flow and Liquidity of 2024 First Half
Net cash provided by operating activities during the first half of 2024 amounted to
Capital expenditures amounted to
Following a dividend payment of
Tenaris Files Half-Year Report
Tenaris S.A. announces that it has filed its half-year report for the six-month period ended June 30, 2024 with the Luxembourg Stock Exchange. The half-year report can be downloaded from the Luxembourg Stock Exchange’s website at www.luxse.com and from Tenaris’s website at ir.tenaris.com.
Holders of Tenaris’s shares and ADSs, and any other interested parties, may request a hard copy of the half-year report, free of charge, at 1-888-300-5432 (toll free from the United States) or 52-229-989-1159 (from outside the United States).
Conference call
Tenaris will hold a conference call to discuss the above reported results, on August 1, 2024, 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 or
https://edge.media-server.com/mmc/p/4zc56376/
If you wish to participate in the Q&A session please register at the following link:
https://register.vevent.com/register/BI0ca8b4a4a2824e44a3cd3d84a000d571
Please 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
| Three-month period ended June 30, | Six-month period ended June 30, | |||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| (Unaudited) | (Unaudited) | |||||||
| Net sales | 3,321,677 | 4,074,913 | 6,763,221 | 8,216,094 | ||||
| Cost of sales | (2,143,614 | ) | (2,267,164 | ) | (4,277,666 | ) | (4,574,943 | ) |
| Gross profit | 1,178,063 | 1,807,749 | 2,485,555 | 3,641,151 | ||||
| Selling, general and administrative expenses | (496,688 | ) | (528,736 | ) | (1,004,820 | ) | (1,016,083 | ) |
| Other operating income | 9,461 | 5,443 | 25,485 | 12,356 | ||||
| Other operating expenses | (179,127 | ) | (6,266 | ) | (182,847 | ) | (7,880 | ) |
| Operating income | 511,709 | 1,278,190 | 1,323,373 | 2,629,544 | ||||
| Finance Income | 68,884 | 45,866 | 125,173 | 93,753 | ||||
| Finance Cost | (15,722 | ) | (36,379 | ) | (36,305 | ) | (67,924 | ) |
| Other financial results, net | 4,021 | 30,074 | (56,447 | ) | 34,551 | |||
| Income before equity in earnings of non-consolidated companies and income tax | 568,892 | 1,317,751 | 1,355,794 | 2,689,924 | ||||
| Equity in (losses) earnings of non-consolidated companies | (82,519 | ) | 95,921 | (34,340 | ) | 148,927 | ||
| Income before income tax | 486,373 | 1,413,672 | 1,321,454 | 2,838,851 | ||||
| Income tax | (138,147 | ) | (277,632 | ) | (223,003 | ) | (573,604 | ) |
| Income for the period | 348,226 | 1,136,040 | 1,098,451 | 2,265,247 | ||||
| Attributable to: | ||||||||
| Shareholders' equity | 335,186 | 1,123,029 | 1,072,166 | 2,251,656 | ||||
| Non-controlling interests | 13,040 | 13,011 | 26,285 | 13,591 | ||||
| 348,226 | 1,136,040 | 1,098,451 | 2,265,247 | |||||
Consolidated Condensed Interim Statement of Financial Position
| (all amounts in thousands of U.S. dollars) | At June 30, 2024 | At December 31, 2023 | |||
| Unaudited | |||||
| ASSETS | |||||
| Non-current assets | |||||
| Property, plant and equipment, net | 6,092,354 | 6,078,179 | |||
| Intangible assets, net | 1,351,706 | 1,377,110 | |||
| Right-of-use assets, net | 155,084 | 132,138 | |||
| Investments in non-consolidated companies | 1,537,730 | 1,608,804 | |||
| Other investments | 1,127,967 | 405,631 | |||
| Deferred tax assets | 820,274 | 789,615 | |||
| Receivables, net | 194,103 | 11,279,218 | 185,959 | 10,577,436 | |
| Current assets | |||||
| Inventories, net | 3,834,623 | 3,921,097 | |||
| Receivables and prepayments, net | 231,223 | 228,819 | |||
| Current tax assets | 261,642 | 256,401 | |||
| Trade receivables, net | 2,185,425 | 2,480,889 | |||
| Derivative financial instruments | 4,989 | 9,801 | |||
| Other investments | 2,452,375 | 1,969,631 | |||
| Cash and cash equivalents | 850,236 | 9,820,513 | 1,637,821 | 10,504,459 | |
| Total assets | 21,099,731 | 21,081,895 | |||
| EQUITY | |||||
| Shareholders' equity | 16,708,130 | 16,842,972 | |||
| Non-controlling interests | 208,569 | 187,465 | |||
| Total equity | 16,916,699 | 17,030,437 | |||
| LIABILITIES | |||||
| Non-current liabilities | |||||
| Borrowings | 21,386 | 48,304 | |||
| Lease liabilities | 108,811 | 96,598 | |||
| Derivative financial instruments | - | 255 | |||
| Deferred tax liabilities | 495,368 | 631,605 | |||
| Other liabilities | 301,166 | 271,268 | |||
| Provisions | 96,614 | 1,023,345 | 101,453 | 1,149,483 | |
| Current liabilities | |||||
| Borrowings | 559,517 | 535,133 | |||
| Lease liabilities | 47,542 | 37,835 | |||
| Derivative financial instruments | 5,776 | 10,895 | |||
| Current tax liabilities | 381,159 | 488,277 | |||
| Other liabilities | 640,584 | 422,645 | |||
| Provisions | 206,498 | 35,959 | |||
| Customer advances | 298,158 | 263,664 | |||
| Trade payables | 1,020,453 | 3,159,687 | 1,107,567 | 2,901,975 | |
| Total liabilities | 4,183,032 | 4,051,458 | |||
| Total equity and liabilities | 21,099,731 | 21,081,895 | |||
Consolidated Condensed Interim Statement of Cash Flows
| (all amounts in thousands of U.S. dollars) | Three-month period ended June 30, | Six-month period ended June 30, | ||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||
| Unaudited | Unaudited | |||||||||
| Cash flows from operating activities | ||||||||||
| Income for the period | 348,226 | 1,136,040 | 1,098,451 | 2,265,247 | ||||||
| Adjustments for: | ||||||||||
| Depreciation and amortization | 138,509 | 130,581 | 313,951 | 256,034 | ||||||
| Bargain purchase gain | (2,211 | ) | - | (2,211 | ) | - | ||||
| Provision for the ongoing litigation related to the acquisition of participation in Usiminas | 170,610 | - | 170,610 | - | ||||||
| Income tax accruals less payments | (84,340 | ) | (131,682 | ) | (113,562 | ) | 57,174 | |||
| Equity in (losses) earnings of non-consolidated companies | 82,519 | (95,921 | ) | 34,340 | (148,927 | ) | ||||
| Interest accruals less payments, net | (14,573 | ) | (18,240 | ) | (2,635 | ) | (21,940 | ) | ||
| Changes in provisions | (6,277 | ) | 31,976 | (4,732 | ) | 39,933 | ||||
| Changes in working capital | 285,066 | 293,795 | 275,518 | (166,762 | ) | |||||
| Others, including net foreign exchange | 17,672 | (4,915 | ) | 52,448 | (18,355 | ) | ||||
| Net cash provided by operating activities | 935,201 | 1,341,634 | 1,822,178 | 2,262,404 | ||||||
| Cash flows from investing activities | ||||||||||
| Capital expenditures | (161,318 | ) | (165,161 | ) | (333,415 | ) | (282,249 | ) | ||
| Changes in advances to suppliers of property, plant and equipment | (13,467 | ) | 2,211 | (10,515 | ) | 2,244 | ||||
| Acquisition of subsidiaries, net of cash acquired | 25,946 | (4,108 | ) | 25,946 | (4,108 | ) | ||||
| Loan to joint ventures | (1,391 | ) | (1,235 | ) | (2,745 | ) | (1,235 | ) | ||
| Proceeds from disposal of property, plant and equipment and intangible assets | 723 | 3,579 | 6,135 | 8,375 | ||||||
| Dividends received from non-consolidated companies | 53,136 | 43,513 | 53,136 | 43,513 | ||||||
| Changes in investments in securities | (277,085 | ) | (896,993 | ) | (1,036,752 | ) | (1,787,629 | ) | ||
| Net cash used in investing activities | (373,456 | ) | (1,018,194 | ) | (1,298,210 | ) | (2,021,089 | ) | ||
| Cash flows from financing activities | ||||||||||
| Dividends paid | (458,556 | ) | (401,383 | ) | (458,556 | ) | (401,383 | ) | ||
| Dividends paid to non-controlling interest in subsidiaries | - | (17,437 | ) | - | (17,437 | ) | ||||
| Changes in non-controlling interests | (5 | ) | 1,739 | 1,115 | 1,739 | |||||
| Acquisition of treasury shares | (492,322 | ) | - | (803,386 | ) | - | ||||
| Payments of lease liabilities | (16,614 | ) | (13,011 | ) | (33,382 | ) | (23,769 | ) | ||
| Proceeds from borrowings | 365,149 | 472,764 | 1,195,096 | 1,032,038 | ||||||
| Repayments of borrowings | (418,521 | ) | (463,195 | ) | (1,172,599 | ) | (1,143,087 | ) | ||
| Net cash used in financing activities | (1,020,869 | ) | (420,523 | ) | (1,271,712 | ) | (551,899 | ) | ||
| Decrease in cash and cash equivalents | (459,124 | ) | (97,083 | ) | (747,744 | ) | (310,584 | ) | ||
| Movement in cash and cash equivalents | ||||||||||
| At the beginning of the period | 1,323,056 | 861,414 | 1,616,597 | 1,091,433 | ||||||
| Effect of exchange rate changes | (15,237 | ) | (9,060 | ) | (20,158 | ) | (25,578 | ) | ||
| Decrease in cash and cash equivalents | (459,124 | ) | (97,083 | ) | (747,744 | ) | (310,584 | ) | ||
| 848,695 | 755,271 | 848,695 | 755,271 | |||||||
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 June 30, | Six-month period ended June 30, | ||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| Income for the period | 348,226 | 1,136,040 | 1,098,451 | 2,265,247 | ||||
| Income tax charge | 138,147 | 277,632 | 223,003 | 573,604 | ||||
| Equity in (losses) earnings of non-consolidated companies | 82,519 | (95,921 | ) | 34,340 | (148,927 | ) | ||
| Financial Results | (57,183 | ) | (39,561 | ) | (32,421 | ) | (60,380 | ) |
| Depreciation and amortization | 138,509 | 130,581 | 313,951 | 256,034 | ||||
| EBITDA | 650,218 | 1,408,771 | 1,637,324 | 2,885,578 | ||||
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 June 30, | Six-month period ended June 30, | ||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| Net cash provided by operating activities | 935,201 | 1,341,633 | 1,822,178 | 2,262,404 | ||||
| Capital expenditures | (161,318 | ) | (165,161 | ) | (333,415 | ) | (282,249 | ) |
| Free cash flow | 773,883 | 1,176,472 | 1,488,763 | 1,980,155 | ||||
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 June 30, | |||
| 2024 | 2023 | |||
| Cash and cash equivalents | 850,236 | 755,305 | ||
| Other current investments | 2,452,375 | 1,849,978 | ||
| Non-current investments | 1,120,834 | 367,105 | ||
| Derivatives hedging borrowings and investments | - | 7,901 | ||
| Current borrowings | (559,517 | ) | (642,294 | ) |
| Non-current borrowings | (21,386 | ) | (50,997 | ) |
| Net cash / (debt) | 3,842,542 | 2,286,998 | ||
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 June 30, | |||
| 2024 | 2023 | |||
| Inventories | 3,834,623 | 3,884,364 | ||
| Trade receivables | 2,185,425 | 2,597,353 | ||
| Customer advances | (298,158 | ) | (100,596 | ) |
| Trade payables | (1,020,453 | ) | (1,020,156 | ) |
| Operating working capital | 4,701,437 | 5,360,965 | ||
| Annualized quarterly sales | 13,286,708 | 16,299,652 | ||
| Operating working capital days | 129 | 120 | ||
Giovanni Sardagna
Tenaris
1-888-300-5432
www.tenaris.com
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