Us Foreign Exchange Rates 2009
us foreign exchange rates 2009
Tenaris Announces Third Quarter 2009
LUXEMBOURG – (Marketwire – November 5, 2009) – Tenaris SA (NYSE: TS) (BAE: TS) (MXSE: TS) (MILAN: TEN) ("Tenaris") today announced its results for the quarter and nine months ended September 30, 2009, in comparison with the results of quarter and nine months to September 30, 2008.
Summary of Third Quarter 2009
(The comparison with the second and third quarter 2009 quarter of 2008)
Q3 2009 Q3 2009 Q2 2008 ——- —————– —————– Net sales (U.S. $ million) 1771.5 2096.3 (15%) 3074.0 (42%) EBIT ($ million) 360.6 436.8 (17%) 931.8 (61%) Net income (million) 237.3 336.4 (29%) 631.2 (62% ) income Net shareholders ($ millions) 229.9 343.3 (33%) 570.6 (60%) Earnings per ADS (U.S. $) 0.39 0.58 (33%) 0.97 (60%) Earnings per action (U.S. $) 0.19 0.29 (33%) 0.48 (60%) EBITDA ($ millions) 488.3 563.1 (13%) 1064.6 (54%) EBITDA margin (% of net sales) 28% 27% 35%
Our results for the third quarter reflected lower demand for our products and services to our customers in all regions if sales in the Middle East and Eastern Africa has experienced a modest increase in the years years. The supply of tubular products fell 50% year over year and 16% sequentially. But our EBITDA margin has stabilized sequentially as input costs offset lower prices. Earnings per share declined 60% year over years, reflecting lower sales and margins. But the cash flow from operations remained strong and we have reduced our investment in working capital by an additional $ 359.5 million dollars. Our net financial position (total debt less cash and other current investments) is now a net cash balance of $ 556.9 million U.S. at the end of the period.
Interim dividend
Our Board of Directors approved the payment of a dividend of $ 0.13 per share (U.S. $ 0.26 per ADS), approximately U.S. $ 153,000,000. The payment date is 26 November 2009 (however, because this date is not a working day in the U.S. All shareholders can receive their dividend courts from November 27, 2009, which is the first business day following the date indicated), and the ex-dividend date will be November 23, 2009.
Background and Prospects
World oil prices rose in the first nine months of 2009, low of about U.S. $ 30 per barrel earlier this year and account for about U.S. $ 75-80 per barrel. The increase in oil prices is supported by expectations continued recovery in global growth led by the excellent performance of China's economy and actions of OPEC production cuts. Gas prices North America recovered from its recent low below U.S. $ 3.00 per million BTU but production has not yet sunk to the level demand and gas storage is at historically high levels.
The number of devices Drilling in international activity, published by Baker Hughes, has continued to decline during the third quarter. He averaged 969 during the third quarter of 2009, 1% below the second quarter of 2009 and 12% lower than same quarter last year. The number of platform for the United States, however, began to recover in July, driven mainly by increased activity oil drilling and the rates of the lower deck. He averaged 973 during the third quarter, up 4% in the second quarter of 2009, but 51% lower than third quarter of 2008. In Canada, the number of the corresponding platform, which is affected by seasonal patterns of drilling, on average 187 in the quarter, below 57% compared to third quarter of 2008.
Recognizing that demand for our pipes this year has been hard hit by recession Oil and gas and the measures taken by customers to adapt to reduce cash flow and market outlook less favorable, in the third quarter of our level of orders received by volume is recovering. In addition, in the U.S. and Canadian markets, inventory levels, although still high, were descendants of the extraordinarily high levels that achieved in the first quarter of this year. With activity levels are stabilized, the price of oil at an attractive level, and populations most at levels more reasonable, we can expect shipments pipe in our segment tubes begin to show a moderate increase in the fourth quarter.
During the quarter, the backlog of large diameter pipes for pipeline projects in South America continued to decline and therefore expect a decline in shipments in the future.
Our costs of production should begin to benefit from efficiencies associated with higher levels of production and the effect of stock prices to reducing our cost structure.
Our average selling price in the coming quarters reflects a gradual adjustment to levels below the current market, and Resuming on net sales and EBITDA will be lower than that of our mailings.
Analysis of Third Quarter 2009
Increase / Volume (in metric tonnes) Q3 2009 Q3 2008 (Decrease) ——- ——- ——– Pipes – seamless 407 000 669 000 (39%) Tubes – Welded 67000263000 (75%) Tubes – Total 474 000 932 000 (49%) Projects – 97,000,155,000 grafts (37%) Total 571 000 1.087 million (47%) Increase / Pipes Q3 2009 Q3 2008 (Decrease) ——– —— – ——- (Net sales – millions of dollars) in North America 515.6 1280.8 (60%) South America 225.9 368.3 (39%) Europe 176.9 408.1 (57%) in the Middle East & Africa 360.4 344.2 5% in the Far East and Oceania 82.3 169.9 (52%) Total net sales ($ millions) 1361.0 2571.3 (47%) Cost sales (% of sales) 58% 53% Operating ($ million) 285.8 856.2 (67%) EBIT (% sales) 21% 33%
Net sales of tubular products and services declined 47% to $ 1,361.0 million in the third quarter of 2009 compared to U.S. $ 2.5713 billion in the third quarter of 2008, online delivery of low prices, as were offset by a rich product mix. All regions were affected except the Middle East and Africa has benefited from higher sales of products pipelines in deepwater West Africa. In North America, despite the increase in demand for OCTG products in Mexico, OCTG product demand in the United States and Canada has dramatically reduced due to lower drilling activity and reduced inventories. Sales in America the South have been affected by low levels of demand in Venezuela and Argentina. In Europe, sales were affected by reduced demand from industry, the decline in demand distributors serving the process and power plants and lower sales of OCTG mainly in Romania. Sales in the Far East and Oceania declined mainly in Japan and China.
Increase / Projects Q3 2009 Q3 2008 (Decrease) ——- ——- ——– Net sales ($ millions) 288.7 319.1 (10%) Cost of sales (% of sales) 71% 73% Operating Income (million) 59.5 44.3 34% Operating income (% of sales) 21% 14%
Net sales of pipes for pipeline projects has declined by 10% to $ 288,700,000 in the third quarter of 2009 compared to U.S. $ 319.1 million in the third quarter of 2008, reflecting a level of supply of gas and other pipeline projects in Brazil and Colombia.
Increase / Other Q3 2009 Q3 2008 (Decrease) ——– ——- ——- Net sales ($ millions) 121.7 183.6 (34%) Cost of sales (% of sales) 74% 68% Operating Profit ($ million) 15.2 4.31 (52%) Operating income (% of sales) 12% 17%
Net sales of other products and services decreased by 34% to U.S. $ 121,700,000 in the third quarter of 2009 compared to U.S. $ 183.6 million in the third quarter quarter of 2008. While our business demand for Brazilian industrial equipment remained strong, demand for our business in the United States led the power was significantly lower and the sales of sucker rods have been affected by the recession.
Selling, general and administrative expenses, or operating expenses increased as a percentage of net sales to 18.5% during the quarter ended September 30, 2009 14.7% compared to the corresponding quarter of 2008, mainly due to the effect of semi-fixed costs and fixed on the lowest incomes.
expenditure Interest Net income decreased to $ 20.6 million in the third quarter of 2009 compared to $ 21.5 million for the same period in 2008. Financial expenses in the third quarter of 2009 include $ 11,100,000 of losses on interest rate swaps entered into to minimize the effect of volatile variable-rate debt taken to finance the acquisitions of Maverick and Hydril.
Other financial results recorded a loss of $ 15.4 million during the third quarter of 2009 compared with a loss of $ 31.7 million in the third quarter of 2008. These results reflect a large portion of the profits and losses from operations and net change in fair value of derivatives and are partially offset by changes in our equity. These gains and losses are primarily attributable to changes in exchange rates between the functional currencies of our subsidiaries (other than the U.S. dollar) and the U.S. dollar, in accordance with IFRS.
Participation income associated companies generated a gain of $ 10.3 million in the third quarter of 2009 compared with a gain of $ 24,300,000 in the third quarter of 2008. These benefits mainly from our equity investment in Ternium.
Income taxes amounted to $ 97,600,000 in the third quarter of 2009, equivalent to 30% of income before equity in earnings of associated companies and income tax, compared with U.S. $ 272,700,000 in the third quarter 2008, equivalent to 31% of income before equity in earnings of associated companies and income tax revenue.
Profit attributable to interest minority declined to U.S. $ 7,400,000 in the third quarter of 2009 compared to U.S. $ 60.5 million for the same quarter of 2008, there was a decrease the benefits of our Confab subsidiary and losses of our subsidiary NKKTubes.
Cash flow and liquidity
Net cash from operations during the third quarter of 2009 was U.S. $ 772.4 million (U.S. $ 2647.0 million in the first nine months), compared with U.S. $ 242,800,000 in the third quarter 2008 (1.0857 billion U.S. dollars in the first nine months). Working capital decreased by U.S. $ 359,500,000 during the third quarter, mainly due to declining stocks of 248.2 million U.S. dollars and trade receivables decreased by $ 241,600,000 U.S., partly offset by a decline in advances received from customers in the United States 104.2 million million dollars.
Capital expenditures totaled $ 101,500,000 in the third quarter of 2009 (327.8 million U.S. dollars during the first nine months), compared with U.S. $ 131,800,000 in the third quarter of 2008 (U.S. $ 337,100,000 during the first nine months).
During the first nine months of 2009, total debt decreased by $ 1,263,700,000 U.S. to USA $ 1713300000 on September 30, 2009 to 2977.0 million U.S. $ and December 31, 2008. Net financial debt in the first nine months of 2009, U.S. 1949300000 decreased to a positive net cash position of U.S. $ 556.9 million to September 30, 2009.
Analysis of 2009 Results first nine months
Net profit attributable to shareholders of the company during the first nine months of 2009 was U.S. $ 939.2 million, or $ 0.80 U.S. per share (U.S. $ 1.59 per ADS), which compares with net income attributable to shareholders of the company during the first nine months of 2008 U.S. 2031.1 U.S. $ million, or $ 1.72 per share (U.S. $ 3.44 per ADS). Net income for the first nine months of 2008 includes the result of the sale of Hydril pressure control business for U.S. $ 394,300,000, or $ 0.33 per share (0.67 U.S. dollars per ADS). Earnings from operations were $ 1483.0 million, or 24% of net sales, compared to U.S. $ 2,456,400,000, 28% of net sales. Operating income before depreciation and amortization was 1.8588 billion, or 29% of net turnover, against U.S. $ 2,853,800,000, or 32% of net sales.
Increase / Volume Sales (metric tons) 9M 2009 9M 2008 (Decrease) ——- ——- ——– Pipes – Seamless 1.483 million 2.126 million (30%) Tubes – 242 000 815 000 grafts (70%) Tubes – Total 000 2941 1.725 million (41%) of projects – 271 000 457 000 soldiers (41%) Total 1.996 million 3.398 million (41%) Increase / 9M 2009 9M 2008 Tubes (Decrease) —– — ——- ——- (Turnover: business income – $ million) 2192.4 3099.9 North America (29%) in South America 720.2 897.1 ( 20%) Europe 661.8 1336.5 (50%) in the Middle East and Africa 1208.4 1385.5 (13%) in the Far East and Oceania 387.7 533.5 (27%) Total Net sales (million dollars) 5170.4 7252.5 (29%) Cost of sales (% of sales) 55% 54% Profit Operating profit ($ millions) 1312.1 2198.2 (40%) Operating income (% of sales) 25% 30%
Net sales of tubular products and services fell from 29% to U.S. $ 5,170,400,000 in the first nine months of 2009, against U.S. $ 7,252,500,000 in the first nine months of 2008 due to a sharp reduction in the volume, which was partially offset by higher average selling prices, partly reflecting a high proportion of sales of premium specialty products.
Increase / 9M 2009 9M 2008 Projects (Decrease) ——– ——- ——- Net sales (million dollars) 765.4 959.0 (20%) Cost of sales (% of sales) 72% 72% Operating Income (million dollars) 154.0 173.2 (11%) Operating Results (% of sales) 20% 18%
Net sales of pipes for pipeline projects has dropped 20% to U.S. $ 765,400,000 during the first nine months of 2009 compared to U.S. $ 959.0 million during the first nine months of 2008, reflecting lower shipments in Brazil, Argentina and British Gas and other pipeline projects.
Increase / 9M 2009 9M Other 2008 (Decrease) ——- ——- ——– Net Income ($ millions) 366.4 572.9 (36%), cost of sales (% of sales) 81% 71% Operating Income ($ millions) 16.8 85.0 (80%) Operating income (% of sales) 5% 15%
Net sales of other products and services decreased by 36% to U.S. $ 366,400,000 during the first nine months of 2009 compared with U.S. $ 572,900,000 during the first nine months of 2008, reflecting lower sales of electricity pipes and sucker rods, partially offset by increased sales of industrial equipment.
Selling, general and administrative or operating expenses increased as a percentage of net sales to 17.6% in the nine months ended September 30, 2009, compared to 15.1% in the corresponding nine months due primarily to the effect of fixed and semi fixed costs in the 2008 low income.
interest expense Net income fell to U.S. $ 71,400,000 during the first nine months of 2009 compared to 93.0 U.S. $ million for the same period of 2008 reflects lower position, net debt and lower interest rates. Interest expense during the first nine months of 2009, including $ 14.1 million of losses on interest rate swaps entered into in order to minimize the effect of the volatility of floating rate debt.
Other financial results reported a loss of $ 67,600,000 in the first nine months of 2009, compared with a loss of 41.2 million dollars during the first nine months of 2008. These results largely reflect gains and losses on foreign exchange transactions and changes in fair value of derivatives and are partially offset by changes in our equity. These gains and losses are primarily attributable to changes in exchange rates between the functional currencies of our subsidiaries (other than the U.S. dollar) and the U.S. dollar, in accordance with IFRS.
Share of income of associated companies generated a gain of $ 68,200,000 in the first nine months of 2009, compared with a profit of 122.3 million U.S. million for the first nine months 2008. These gains were derived mainly from our equity investment in Ternium.
Income taxes amounted to U.S. $ 417.2 million the first nine months of 2009, equivalent to 31% of income before equity in earnings of associated companies and income tax, compared with 701.1 million U.S. $ during the first nine months of 2008, equivalent to 30% of income before equity in earnings of associated companies and income tax.
Income from discontinued operations amounted to a loss of 28.1 million U.S. dollar during the first nine months of 2009, corresponding to our operations in Venezuela, who nationalized, compared with a profit of U.S. $ 417.8 million for the corresponding period in 2008, including the U.S. Accounted for $ 394,300,000 the result of the sale of a business Hydril pressure control.
Result attributable to minority interests fell to U.S. $ 27.7 million during the first nine months of 2009, against U.S. $ 130.0 million during the corresponding nine months of 2008, mainly due to the lower results of our subsidiaries and Confab NKKTubes.
Certain statements in this press release are "forward-looking statements." Forward-looking statements are based on views and management's current assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by such statements. These risks include, but are not limited to the risks arising from uncertainty about the future of oil and gas prices and its impact investment programs by oil companies and gas.
Press releases and financial statements can be downloaded from atwww.tenaris.com page Tenaris web / investors.
Condensed consolidated income statement provisional (All amounts are Miles period of three months For the nine months dollars USA) ended September 30 September 30 ———- ———- – ——- 2009 2008 2009 2008 —– —– ————— ———- —- —— ———- Continuing Operations (not Unaudited) (Unaudited) Turnover 1,771,475 3,073,978 6,302,107 8,784,402 Cost of sales (1,080,161) (1,712,417) (3,708,372) (5,015,248) —— —- ———- ———- —– —– Gross profit 691,314 1,361,561 2,593,735 3,769,154 Selling, general and administrative (327,234) (450,453) (1,110,240) (1,328,491) Other operating income (Expense), net (3.528) 20.688 (504) 15 741 ———- – ——– ———- ——- — Operating income 360,552 931,796 1,482,991 2,456,404 10,435 16,910 23,172 45,591 Interest Interest expense (31,007) (38,442) (94,589) (138,566) Other financial income (15,377) (31,664) (67,643) (41,236) ———- ———- ——— – ———- Income before equity in earnings of associated companies and income taxes 324,603 878,600 1,343,931 2,322,193 shares for the benefit of associated companies 122 253 10 294 24 290 68 229 ———- ———- ———- – ——– Income before taxes 334 897 902 890 2444 1.41216 million 446 Income taxes (97,583) (272,668) (417,175) (701,132) ———- ——— ———- – ———- Income 237 314 630 222 1,743,314 to continue operations of discontinued operations 994 985 Income from discontinued operations – 935 (28138) 417 841 ———- ———- ———- — ——- Income to shareholders 237 314 631 157 period 2161155 966 847 Attributable to: 229 873 570 635 939.188 2,031,149 Company Minority Interest 60522 27659130006 7441 ———- ———- ———- —— —- 237 314 631 157 966 847 2161. 155 ———- —— —- ———- ———- Condensed Interim statement overall financial situation (all amounts in thousands of U.S. dollars) to September 30, 2009 December 31, 2008 ——————— – —– ————– (Unaudited) Assets Non-current assets Fixed assets, net 2,982,871 3,193,279 Intangible assets, net 3,826,987 3,707,914 Investment in associated companies 578 758 527 007 Other investments 31 835 38 355 Deferred tax assets 195 778 390 323 81 143 82 752 Inventories 7,848,295 7,788,707 Assets 1,902,555 3,091,401 ———- ———- Current assets and interest income receivable Current 225 905 251 481 Tax assets 234 587 201 607 Trade receivables 1,295,386 2,123,296 21 572 available for sale of assets – Other investments 528 861 Cash and cash equivalents 45 863 Cash Cash 1,741,352 5,950,218 1,538,769 7,252,417 ———- ———- ———- —– —– Total assets 13,738,925 15,100,712 ==== ====== ========== Equity Capital and reserves attributable to shareholders of 8982765 8176571 618 746 525 316 Minority Interest 9,601,511 ———- ———- Total shares ======== == ========== 8,701,887 LIABILITIES Non-current liabilities Financial liabilities 1,241,048 Deferred tax liabilities 844 946 872 861 Other liabilities 202 024 Provisions 89 526 84,695 223,142 1,053,838 2,007,544 3,018 1,254 2,608,808 ———- ———- Liabilities Current liabilities 868 358 Liabilities Borrowings 1,735,967 tax liabilities 322 041 610 313 250 986 242 620 Other reserves 35 986 28 511 152 690 275 815 499 Customer advances 809 896 791 Debt 3,790,017 2,129,870 ———- ———- Total liabilities 4,137,414 6,398,825 ========== Total 13738925 15100712 ========== ========== ========== Liabilities Half of the Year Consolidated Cash Flows Three months Nine months ended September 30 September 30 (All amounts are in thousands ———————- – ——————– – USD) 2009 2008 2009 2008 ———- ———- ———- ——— – (Unaudited) (not marked) cash flow provided by operating profit for the period 237 314 966 847 631 157 2,161,155 Adjustments for: Depreciation 127 789 134 885 375 850 Payment taxes 403 758 Income less the exercise (15,741) (309,497) (345,431) (219,750) Share of profits of associated companies (10,294) (24,290) (67,367) (122 386) Proceeds from the sale of a pressure control business – - (394 323) Interest accrued less interest payments, net 34 401 5741 (17 957) 26 507 Change supplies (10,174) (4,404) 4,026 10,839 Changes in working capital 359,488 (257,464) 1,534,948 (803,078) Other, including foreign currency translation 78 278 37 986 22,969,196,070 ———- ———- ———- ———- Net cash provided by operating activities 772,401 242,774 2,646,986 1,085,691 ========== ========== Cash ========== ========== Investing activities Capital expenditures (101,460) (131,772) (327,795) (337,138) Acquisitions of subsidiaries and minority interests (29) (8,003) (73,564) (9,868) Proceeds from the sale of the Pressure Control – 1,113,805 Proceeds from disposal of tangible and intangibles 12 004 12 166 1676 3340 Investments in short-term securities (255,411) 324,934 (482,998) Dividends received 60,533,636 13 3.680 to 8.903 Other – - – (3,428) ———- ———- ———- – —— — Net cash (used in) investing (351,544) 188,499 (863,450) 849,706 Cash flows = ========= ========== Activities ========== ===== ===== Dividends paid financing – - (354.161) (295.134) Dividends paid to minority shareholders in subsidiaries (5,522) (4,981) (32,698) (60,117) Proceeds from loans 245,961 301,117 509,802 731,205 Repayments of loans (554,689) (444,709) (1,704,173) (1,777,464) ———- ———- —- — —— ——- Cash flows from activities financing (314,250) (148,573) (1,581,230) (1,401,510) ========== ========== ======= === ========== Increase in cash and cash equivalents 106 607 282 700 202 306 533 887 Change in cash and cash equivalents Cash at beginning of year 1,608,695 1,319,049 1,525,022 954,303 Effect of exchange rate changes 18,118 (138,107) 15,788 (24,548) Decrease due to the deconsolidation – - (9696) – Increase in cash and cash equivalents 106 607 282 700 202 306 533 887 ———- ———- ——- – - —- —— September 30, 1,733,420 1,463,642 1,733,420 1,463,642 ========== ========== ========== ========== —- —— ———————- ———— Cash and cash equivalents September 30, September 30, —————- —————– —— — – 2009 2008 2009 2008 Cash and bank deposits 1741352 1489787 1741352 1489787 overdraft (7,932) (26,145) (7,932) (26,145) ———- ———- ———- —- —- – 1,733,420 1,463,642 1,733,420 1,463,642 ———- ———- ———- —— —-
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