Advertisement
Singapore markets closed
  • Straits Times Index

    3,287.75
    -5.38 (-0.16%)
     
  • S&P 500

    5,071.63
    +1.08 (+0.02%)
     
  • Dow

    38,460.92
    -42.77 (-0.11%)
     
  • Nasdaq

    15,712.75
    +16.11 (+0.10%)
     
  • Bitcoin USD

    64,071.67
    -2,559.42 (-3.84%)
     
  • CMC Crypto 200

    1,356.16
    -26.42 (-1.91%)
     
  • FTSE 100

    8,100.48
    +60.10 (+0.75%)
     
  • Gold

    2,339.40
    +1.00 (+0.04%)
     
  • Crude Oil

    83.18
    +0.37 (+0.45%)
     
  • 10-Yr Bond

    4.6520
    +0.0540 (+1.17%)
     
  • Nikkei

    37,628.48
    -831.60 (-2.16%)
     
  • Hang Seng

    17,284.54
    +83.27 (+0.48%)
     
  • FTSE Bursa Malaysia

    1,569.25
    -2.23 (-0.14%)
     
  • Jakarta Composite Index

    7,155.29
    -19.24 (-0.27%)
     
  • PSE Index

    6,574.88
    +2.13 (+0.03%)
     

Tenaris Announces 2023 Fourth Quarter and Annual Results

Tenaris SA
Tenaris SA

The financial and operational information contained in this press release is based on audited 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 Accounting Standards. 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, Feb. 21, 2024 (GLOBE NEWSWIRE) -- Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) (“Tenaris”) today announced its results for the fourth quarter and year ended December 31, 2023 with comparison to its results for the fourth quarter and year ended December 31, 2022.

Summary of 2023 Fourth Quarter Results

 

4Q 2023

3Q 2023

4Q 2022

Net sales ($ million)

3,415

 

3,238

 

5

%

3,620

 

(6

%)

Operating income ($ million)

819

 

868

 

(6

%)

1,013

 

(19

%)

Net income ($ million)

1,146

 

547

 

110

%

803

 

43

%

Shareholders’ net income ($ million)

1,129

 

537

 

110

%

807

 

40

%

Earnings per ADS ($)*

1.92

 

0.91

 

110

%

1.37

 

40

%

Earnings per share ($)*

0.96

 

0.46

 

110

%

0.68

 

40

%

EBITDA ($ million)

975

 

1,004

 

(3

%)

1,269

 

(23

%)

EBITDA margin (% of net sales)

28.6

%

31.0

%

 

35.1

%

 

*For the calculation of per share and per ADS data we have used average number of shares outstanding excluding treasury shares.

ADVERTISEMENT

Our sales in the fourth quarter of 2023 rose 5% sequentially, boosted by a high level of shipments to the Middle East and for offshore pipeline projects, together with the inclusion of our newly acquired Shawcor pipe coating business, which offset the ongoing pricing declines in the Americas. Our EBITDA at $975 million declined mainly due to lower average selling prices in the Americas. Our net income of the quarter, of $1.1 billion was positively affected by: i)$167 million higher result from non-consolidated companies; ii) $26 million higher financial results and iii) net deferred tax gain of $360 million.

Our free cash flow for the quarter amounted to $669 million after capex payments of $167 million. Additionally, during the quarter we paid $161 million (net of cash) for the acquisition of the Shawcor pipe coating business from Mattr. Following dividend payments of $235 million and $214 million spent on share buybacks during the quarter, our net cash position increased to $3.4 billion at December 31, 2023.

Summary of 2023 Annual Results

 

12M 2023

12M 2022

Increase/(Decrease)

Net sales ($ million)

14,869

 

11,763

 

26

%

Operating income ($ million)

4,316

 

2,963

 

46

%

Net income ($ million)

3,958

 

2,549

 

55

%

Shareholders’ net income ($ million)

3,918

 

2,553

 

53

%

Earnings per ADS ($)*

6.65

 

4.33

 

53

%

Earnings per share ($)*

3.32

 

2.16

 

54

%

EBITDA ($ million)

4,865

 

3,648

 

33

%

EBITDA margin (% of net sales)

32.7

%

31.0

%

 

*For the calculation of per share and per ADS data we have used average number of shares outstanding excluding treasury shares.

In 2023, our net sales, EBITDA and net income reached record levels. The year was characterized by a first half, in which prices in the Americas reached exceptional levels and we had a high level of pipeline shipments in Argentina, and a second half, in which prices in the Americas started to return to more normal levels while overall sales were supported by good activity and pricing levels in the Middle East and for offshore pipelines.

Operating margins expanded reflecting the higher prices realized on the sales of most of our products, which more than compensated for higher costs of goods sold.

Net income benefited from a net positive deferred tax effect of $194 million as well as positive financial results of $221 million.

Operating cash flow for the year amounted to $4,395 million (including a $182 million reduction in working capital). After capital expenditures of $619 million, business acquisitions of $266 million, dividend payments of $637 million and $214 million spent on share buybacks, our net cash position increased to a record level of $3.4 billion at the end of the year.

Market Background and Outlook

In an environment where oil prices remain relatively stable, oil supply and demand is balanced, and the long term outlook for natural gas, especially LNG, is promising, drilling activity in North America is stabilizing, while continuing to increase in the Middle East and offshore. In this context, and considering our expanded perimeter, with our recent acquisition of the Shawcor pipe coating business, we expect that, in the first half of 2024, our sales will be in line with those of the second half of 2023.

After the exceptional levels they reached in the post-Covid recovery, tubular price levels and margins in the Americas have returned to sustainable levels and should stabilize in the coming months. Prices and margins in the rest of the world should remain at good levels supported by strong demand for offshore operations and pipeline projects.

In Latin America, fundamental conditions remain favorable for the continued expansion of drilling activity and tubular demand, but the high level of political and economic volatility may affect these prospects.

Annual Dividend Proposal; Second Tranche of Share Buyback Program

Upon approval of the Company´s annual accounts in March 2024, the board of directors intends to propose, for approval of the annual general shareholders’ meeting to be held on April 30, 2024, the payment of a dividend per share of $0.60 (in an aggregate amount of approximately $700 million), which would include the interim dividend per share of $0.20 (approximately $235 million) paid in November 2023. If the annual dividend is approved by the shareholders, a dividend of $0.40 per share ($0.80 per ADS), or approximately $465 million, will be paid on May 22, 2024, with an ex-dividend date on May 20, 2024 and record date on May 21, 2024.

The second $300 million tranche of the Company’s previously announced $1.2 billion share buyback program is expected to begin on Monday, February 26, 2024.

Analysis of 2023 Fourth Quarter Results

Tubes Sales volume (thousand metric tons)

4Q 2023

3Q 2023

4Q 2022

Seamless

760

744

2

%

809

(6

%)

Welded

246

169

45

%

156

58

%

Total

1,006

913

10

%

965

4

%


Tubes

4Q 2023

3Q 2023

4Q 2022

(Net sales - $ million)

 

 

 

 

 

 

North America

1,501

 

1,700

 

(12

%)

2,105

 

(29

%)

 

South America

590

 

608

 

(3

%)

802

 

(26

%)

 

Europe

302

 

231

 

30

%

185

 

63

%

 

Asia Pacific, Middle East and Africa

805

 

556

 

45

%

373

 

116

%

 

Total net sales ($ million)

3,198

 

3,095

 

3

%

3,466

 

(8

%)

 

Operating income ($ million)

780

 

841

 

(7

%)

980

 

(20

%)

 

Operating margin (% of sales)

24.4

%

27.2

%

 

28.3

%

 

 


Net sales of tubular products and services
increased 3% sequentially but declined 8% year on year. Volumes increased 10% sequentially but average selling prices decreased 6%. In North America, sales decreased 12% sequentially reflecting lower prices and a decline in activity in the U.S. onshore market. In South America sales decreased 3% sequentially, mainly due to lower prices of OCTG in Argentina. In Europe sales increased 30% sequentially due to higher sales for offshore line pipe products in Norway. In the Asia Pacific, Middle East and Africa sales increased 45% reflecting higher sales in Saudi Arabia and for offshore line pipe projects in Qatar and sub-Saharan Africa.

Operating income from tubular products and services, amounted to $780 million in the fourth quarter of 2023, compared to $841 million in the previous quarter and $980 million in the fourth quarter of 2022. During the quarter the operating margin decreased following a 6% decrease in average selling prices only partially compensated by a decrease in average tubes cost of 4%.

Others

4Q 2023

3Q 2023

4Q 2022

Net sales ($ million)

217

 

143

 

52

%

154

 

41

%

Operating income ($ million)

39

 

27

 

45

%

33

 

19

%

Operating margin (% of sales)

18.1

%

19.0

%

 

21.4

%

 


Net sales of other products and services
increased 52% sequentially and 41% year on year. The sequential increase is mainly explained by the consolidation of sales in December 2023 of the newly acquired coating business which contributed $77 million, largely related to a major project in Altamira, Mexico.

Selling, general and administrative expenses, or SG&A, amounted to $471 million (13.8% of net sales), compared to $433 million (13.4%) in the previous quarter and $454 million (12.6%) in the fourth quarter of 2022. The increase in SG&A is mainly related to higher labor costs and the integration of the newly acquired coating business headcount and amortizations.

Other operating result amounted to a $5 million loss in the fourth quarter of 2023, compared with a $36 million gain in the previous quarter and a $12 million loss in the fourth quarter of 2022. The previous quarter gain was mainly related to a non-recurring gain of $32 million corresponding to the transfer of court awards related to the Company’s Venezuelan nationalized assets.

Financial results were a gain of $93 million in the fourth quarter of 2023, compared with a gain of $67 million in the previous quarter and a gain of $36 million in the fourth quarter of 2022. Results of the quarter are mainly derived from net foreign exchange gains of $144 million, mainly related to the positive effect of the devaluation of the Argentine peso over a net short exposure in that currency. This positive FX results were partially offset by $95 million loss from the change in the fair value of U.S. dollar-denominated Argentine bonds when distributed and disposed abroad. Additionally, our net cash position yield a net interest gain of $44 million in the quarter.

Equity in earnings of non-consolidated companies generated a gain of $57 million in the fourth quarter of 2023, compared to a loss of $110 million in the previous quarter and a gain of $13 million in the same period of 2022. The result of the previous quarter included a non-cash loss of $144 million from our investment in Usiminas.

Income tax result amounted to a gain of $177 million in the fourth quarter of 2023, compared to a charge of $278 million in the previous quarter and $258 million in the fourth quarter of 2022. The gain of the quarter is mainly explained by: i) the recognition of a deferred tax asset of $550 million as a result of new business activities to be carried out at subsidiaries with tax loss carry forwards, ii) a $190 million deferred tax liability recognized mainly related to foreign exchange devaluation in Argentina, due to the decline of the fiscal values related to fixed assets and inventory.

Cash Flow and Liquidity of 2023 Fourth Quarter

Net cash provided by operations during the fourth quarter of 2023 was $836 million, compared with $1,297 million in the previous quarter and $524 million in the fourth quarter of 2022. Working capital during the quarter increased by $66 million, mainly due to the increase in trade receivables, however operating working capital days declined to 134 at year end compared to 138 at the end of the previous quarter.

With capital expenditures of $167 million for the fourth quarter of 2023 ($170 million in the previous quarter and $108 million in the fourth quarter of 2022), during the quarter we had a positive free cash flow of $669 million. Additionally, during the quarter we paid $161 million (net of cash) for the acquisition of Mattr’s pipe coating business unit.

Following dividend payments of $235 million and share buybacks of $214 million during the quarter, our positive net cash position increased to $3.4 billion at December 31, 2023.

Analysis of 2023 Annual Results

Net sales ($ million)

12M 2023

12M 2022

Increase/(Decrease)

Tubes

14,185

95

%

11,133

95

%

27

%

Others

684

5

%

630

5

%

9

%

Total

14,869

 

11,763

 

26

%


Tubes Sales volume (thousand metric tons)

12M 2023

12M 2022

Increase/(Decrease)

Seamless

3,189

3,146

1

%

Welded

953

387

146

%

Total

4,141

3,533

17

%


Tubes

12M 2023

12M 2022

Increase/(Decrease)

(Net sales - $ million)

 

 

 

North America

7,572

 

6,796

 

11

%

South America

3,067

 

2,213

 

39

%

Europe

1,055

 

867

 

22

%

Asia Pacific, Middle East and Africa

2,491

 

1,257

 

98

%

Total net sales ($ million)

14,185

 

11,133

 

27

%

Operating income ($ million)

4,183

 

2,867

 

46

%

Operating margin (% of sales)

29.5

%

25.8

%

 


Net sales of tubular products and services
increased 27% to $14,185 million in 2023, compared to $11,133 million in 2022, reflecting a 17% increase in volumes and a 9% increase in average selling prices. Volumes increased mainly in the AMEA region following the increase in activity and in South America mainly due to the delivery of welded line pipe for a gas pipeline in Argentina. Prices were higher in all regions.

Operating results from tubular products and services, amounted to a gain of $4,183 million in 2023, compared to a gain of $2,867 million in 2022 (which was net of a $63 million impairment charge). The improvement in operating results was driven by the recovery in shipment volumes and in prices which help to compensate the increase in costs.

Others

12M 2023

12M 2022

Increase/(Decrease)

Net sales ($ million)

684

 

630

 

9

%

Operating income ($ million)

133

 

96

 

39

%

Operating margin (% of sales)

19.5

%

15.2

%

 


Net sales of other products and services
increased 9% from $630 million in 2022 to $684 million in 2023, which includes $77 million from the pipe coating business unit acquired from Mattr on November 30, 2023. Additionally, in 2023 we had higher sales from our oilfield services business in Argentina, sucker rods and coiled tubing services, which offset the decline in sales of excess raw materials and energy and pipes for plumbing applications in Italy.

Operating results from other products and services, amounted to a gain of $133 million in 2023, compared to $96 million in 2022. Results were mainly derived from our sucker rods business and our oilfield services business in Argentina.

Selling, general and administrative expenses, or SG&A, amounted to $1,919 million (12.9% of net sales), compared to $1,635 million (13.9%) in 2022. The 2023 increase in SG&A is mainly due to higher labor costs and logistic costs (freights and taxes), while they decrease as a percentage of sales.

Financial results amounted to a gain of $221 million in 2023, compared to a loss of $6 million in 2022.
2023 results are mainly derived from net foreign exchange gains of $209 million, mainly related to the positive effect of the devaluation of the Argentine peso over a net short exposure in that currency. These positive FX results were partially offset by a $95 million loss from the change in the fair value of U.S. dollar-denominated Argentine bonds when distributed and disposed abroad. Additionally, our net cash position yield a net interest gain of $107 million in the year.

Equity in earnings of non-consolidated companies generated a gain of $95 million in 2023, compared to $209 million in 2022. These results were mainly derived from our equity investment in Ternium (NYSE:TX). The result 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. In 2022 they included $34 million impairment charges on our participations in the joint venture with Severstal ($15 million) and in Usiminas ($19 million).

Income tax charge amounted to $675 million in 2023, compared to $617 million in 2022, reflecting the improvement in results in several subsidiaries and a net positive deferred tax effect of $194 million.

Cash Flow and Liquidity of 2023

Net cash provided by operations in 2023 was $4,395 million (including a $182 million reduction in working capital), compared to $1,167 million (net of $2,131 million used in working capital) in 2022.

With capital expenditures of $619 million, we had a positive free cash flow of $3,776 million in 2023, compared to $789 million in 2022. Additionally, in 2023 we invested $266 million in the acquisition of Mattr’s pipe coating business unit plus other acquisitions.

Following dividend payments of $637 million and share buybacks of $214 million during 2023, our positive net cash position increased to $3.4 billion at December 31, 2023 compared to $921 million at December 31, 2022.

Conference call

Tenaris will hold a conference call to discuss the above reported results, on February 22, 2024, at 09:30 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/384xrvok 
If you wish to participate in the Q&A session please register at the following link:

https://register.vevent.com/register/BIdf892e810d2749faba59c1f70a41aba7

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 Income Statement

(all amounts in thousands of U.S. dollars)

Three-month period ended December 31,

Twelve-month period ended December 31,

 

2023

2022

2023

2022

 

 

 

 

 

Net sales

3,414,930

 

3,620,210

 

14,868,860

 

11,762,526

 

Cost of sales

(2,120,591

)

(2,063,969

)

(8,668,915

)

(7,087,739

)

Gross profit

1,294,339

 

1,556,241

 

6,199,945

 

4,674,787

 

Selling, general and administrative expenses

(470,542

)

(454,478

)

(1,919,307

)

(1,634,575

)

Impairment charge

-

 

(76,725

)

-

 

(76,725

)

Other operating income (expense), net

(4,834

)

(11,987

)

35,770

 

(212

)

Operating income

818,963

 

1,013,051

 

4,316,408

 

2,963,275

 

Finance income

63,621

 

37,756

 

213,474

 

80,020

 

Finance cost

(19,759

)

(20,237

)

(106,862

)

(45,940

)

Other financial results

49,249

 

18,127

 

114,365

 

(40,120

)

Income before equity in earnings of non-consolidated companies and income tax

912,074

 

1,048,697

 

4,537,385

 

2,957,235

 

Equity in earnings of non-consolidated companies

56,859

 

12,701

 

95,404

 

208,702

 

Income before income tax

968,933

 

1,061,398

 

4,632,789

 

3,165,937

 

Income tax

176,848

 

(258,226

)

(674,956

)

(617,236

)

Income for the period

1,145,781

 

803,172

 

3,957,833

 

2,548,701

 

 

 

 

 

 

Attributable to:

 

 

 

 

Shareholders' equity

1,129,098

 

807,318

 

3,918,065

 

2,553,280

 

Non-controlling interests

16,683

 

(4,146

)

39,768

 

(4,579

)

 

1,145,781

 

803,172

 

3,957,833

 

2,548,701

 



Consolidated Statement of Financial Position

(all amounts in thousands of U.S. dollars)

At December 31, 2023

 

At December 31, 2022

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Property, plant and equipment, net

6,078,179

 

 

5,556,263

 

 

Intangible assets, net

1,377,110

 

 

1,332,508

 

 

Right-of-use assets, net

132,138

 

 

111,741

 

 

Investments in non-consolidated companies

1,608,804

 

 

1,540,646

 

 

Other investments

405,631

 

 

119,902

 

 

Deferred tax assets

789,615

 

 

208,870

 

 

Receivables, net

185,959

10,577,436

 

211,720

9,081,650

 

Current assets

 

 

 

 

 

 

Inventories, net

3,921,097

 

 

3,986,929

 

 

Receivables and prepayments, net

228,819

 

 

183,811

 

 

Current tax assets

256,401

 

 

243,136

 

 

Trade receivables, net

2,480,889

 

 

2,493,940

 

 

Derivative financial instruments

9,801

 

 

30,805

 

 

Other investments

1,969,631

 

 

438,448

 

 

Cash and cash equivalents

1,637,821

10,504,459

 

1,091,527

8,468,596

 

Total assets

 

21,081,895

 

 

17,550,246

 

EQUITY

 

 

 

 

 

 

Shareholders' equity

 

16,842,972

 

 

13,905,709

 

Non-controlling interests

 

187,465

 

 

128,728

 

Total equity

 

17,030,437

 

 

14,034,437

 

LIABILITIES

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Borrowings

48,304

 

 

46,433

 

 

Lease liabilities

96,598

 

 

83,616

 

 

Derivative financial instruments

255

 

 

-

 

 

Deferred tax liabilities

631,605

 

 

269,069

 

 

Other liabilities

271,268

 

 

230,142

 

 

Provisions

101,453

1,149,483

 

98,126

727,386

 

Current liabilities

 

 

 

 

 

 

Borrowings

535,133

 

 

682,329

 

 

Lease liabilities

37,835

 

 

28,561

 

 

Derivative financial instruments

10,895

 

 

7,127

 

 

Current tax liabilities

488,277

 

 

376,240

 

 

Other liabilities

422,645

 

 

260,614

 

 

Provisions

35,959

 

 

11,185

 

 

Customer advances

263,664

 

 

242,910

 

 

Trade payables

1,107,567

2,901,975

 

1,179,457

2,788,423

 

Total liabilities

 

4,051,458

 

 

3,515,809

 

Total equity and liabilities

 

21,081,895

 

 

17,550,246

 



Consolidated Statement of Cash Flows

 

Three-month period ended December 31,

Twelve-month period ended December 31,

(all amounts in thousands of U.S. dollars)

2023

2022

2023

2022

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

Income for the year

1,145,781

 

803,172

 

3,957,833

 

2,548,701

 

Adjustments for:

 

 

 

 

Depreciation and amortization

156,347

 

179,135

 

548,510

 

607,723

 

Impairment charge

-

 

76,725

 

-

 

76,725

 

Income tax accruals less payments

(277,559

)

139,061

 

(143,391

)

257,651

 

Equity in earnings of non-consolidated companies

(56,859

)

(12,701

)

(95,404

)

(208,702

)

Interest accruals less payments, net

(8,554

)

(3,672

)

(53,480

)

1,480

 

Changes in provisions

(651

)

7,164

 

21,284

 

16,433

 

Reclassification of currency translation adjustment reserve

(878

)

-

 

(878

)

(71,252

)

Changes in working capital

(65,697

)

(682,115

)

182,428

 

(2,131,245

)

Others, including net exchange differences

(56,195

)

17,173

 

(21,829

)

69,703

 

Net cash provided by operating activities

835,735

 

523,942

 

4,395,073

 

1,167,217

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Capital expenditures

(166,820

)

(107,646

)

(619,445

)

(378,446

)

Changes in advance to suppliers of property, plant and equipment

834

 

(13,108

)

1,736

 

(18,901

)

Acquisition of subsidiaries, net of cash acquired

(161,238

)

-

 

(265,657

)

(4,082

)

Investment in companies under cost method

(1,126

)

-

 

(1,126

)

-

 

Additions to associated companies

-

 

-

 

(22,661

)

-

 

Loan to joint-ventures

(1,092

)

-

 

(3,754

)

-

 

Proceeds from disposal of property, plant and equipment and intangible assets

3,858

 

1,690

 

12,881

 

48,458

 

Dividends received from non-consolidated companies

25,268

 

20,674

 

68,781

 

66,162

 

Changes in investments in securities

740,153

 

38,079

 

(1,857,272

)

123,254

 

Net cash provided by (used in) investing activities

439,837

 

(60,311

)

(2,686,517

)

(163,555

)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Dividends paid

(235,128

)

(200,658

)

(636,511

)

(531,242

)

Dividends paid to non-controlling interest in subsidiaries

-

 

-

 

(18,967

)

(10,432

)

Changes in non-controlling interests

-

 

2,099

 

3,772

 

(1,407

)

Acquisition of treasury shares

(213,739

)

-

 

(213,739

)

-

 

Payments of lease liabilities

(15,524

)

(13,560

)

(51,492

)

(52,396

)

Proceeds from borrowings

365,455

 

161,785

 

1,723,677

 

1,511,503

 

Repayments of borrowings

(406,774

)

(300,783

)

(1,931,747

)

(1,094,370

)

Net cash used in financing activities

(505,711

)

(351,117

)

(1,125,007

)

(178,344

)

 

 

 

 

 

Increase in cash and cash equivalents

769,861

 

112,514

 

583,549

 

825,318

 

 

 

 

 

 

Movement in cash and cash equivalents

 

 

 

 

At the beginning of the year

864,012

 

990,803

 

1,091,433

 

318,067

 

Effect of exchange rate changes

(17,276

)

(11,883

)

(58,385

)

(51,952

)

Increase in cash and cash equivalents

769,861

 

112,514

 

583,549

 

825,318

 

At December 31,

1,616,597

 

1,091,434

 

1,616,597

 

1,091,433

 


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 December 31,

Twelve-month period ended December 31,

 

2023

2022

2023

2022

Income for the period

1,145,781

 

803,172

 

3,957,833

 

2,548,701

 

Income tax charge / (credit)

(176,848

)

258,226

 

674,956

 

617,236

 

Equity in earnings of non-consolidated companies

(56,859

)

(12,701

)

(95,404

)

(208,702

)

Financial results

(93,111

)

(35,646

)

(220,977

)

6,040

 

Depreciation and amortization

156,347

 

179,135

 

548,510

 

607,723

 

Impairment charge

-

 

76,725

 

-

 

76,725

 

EBITDA

975,310

 

1,268,911

 

4,864,918

 

3,647,723

 


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 December 31,

Twelve-month period ended December 31,

 

2023

2022

2023

2022

Net cash provided by operating activities

835,735

 

523,942

 

4,395,073

 

1,167,217

 

Capital expenditures

(166,820

)

(107,646

)

(619,445

)

(378,446

)

Free cash flow

668,915

 

416,296

 

3,775,628

 

788,771

 


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)

Year ended December 31,

 

2023

2022

Cash and cash equivalents

1,637,821

 

1,091,527

 

Other current investments

1,969,631

 

438,448

 

Non-current investments

398,220

 

113,574

 

Derivatives hedging borrowings and investments

-

 

6,480

 

Current borrowings

(535,133

)

(682,329

)

Non-current borrowings

(48,304

)

(46,433

)

Net cash / (debt)

3,422,235

 

921,267

 


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)

Three-month period ended December 31,

 

2023

2022

Inventories

3,921,097

 

3,986,929

 

Trade receivables

2,480,889

 

2,493,940

 

Customer advances

(263,664

)

(242,910

)

Trade payables

(1,107,567

)

(1,179,457

)

Operating working capital

5,030,755

 

5,058,502

 

Annualized quarterly sales

13,659,720

 

14,480,840

 

Operating working capital days

134

 

128

 


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