tenaris6k.htm
 

 
FORM 6 - K



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934


As of May 8, 2009



TENARIS, S.A.
(Translation of Registrant's name into English)


TENARIS, S.A.
46a, Avenue John F. Kennedy
L-1855 Luxembourg
(Address of principal executive offices)


Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or 40-F.

                                                
Form 20-F  ü   Form 40-F___

 
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12G3-2(b) under the Securities Exchange Act of 1934.

 
Yes       No  ü   

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-.

 
 
 

The attached material is being furnished to the Securities and Exchange Commission pursuant to Rule 13a-16 and Form 6-K under the Securities Exchange Act of 1934, as amended. This report contains Tenaris's press release announcing its 2009 First Quarter Results.

SIGNATURE




Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



Date: May 8, 2009



Tenaris, S.A.




By: /s/ Cecilia Bilesio
Cecilia Bilesio
Corporate Secretary


 
 
 
 

Tenaris Announces 2009 First Quarter Results
 
The Financial and Operational Information Contained in This Press Release Is Based on Unaudited Consolidated Condensed Interim Financial Statements Prepared in Accordance With International Financial Reporting Standards (IFRS) and Presented in U.S. dollars
 
LUXEMBOURG--(Marketwire - May 06, 2009) - Tenaris S.A. (NYSE: TS) (BAE: TS) (MXSE: TS) (MILAN: TEN) ("Tenaris") today announced its results for the quarter ended March 31, 2009 with comparison to its results for the quarter ended March 31, 2008.
 
Summary of 2009 First Quarter Results

(Comparison with fourth and first quarters of 2008)
 
 
Q1 2009
Q4 2008
Q1 2008
Net sales (US$ million)
2,449.5
3,238.8
(24%)
2,626.2
(7%)
Operating income (US$ million)
678.1
559.3
21%
710.9
(5%)
Net income (US$ million)
393.1
114.5
243%
500.0
(21%)
Shareholders’ net income (US$ million)
366.0
93.7
291%
473.0
(23%)
Earnings per ADS (US$)
0.62
0.16
291%
0.80
(23%)
Earnings per share (US$)
0.31
0.08
291%
0.40
(23%)
EBITDA (US$ million)
799.8
1,191.4
(33%)
845.4
(5%)
EBITDA margin (% of net sales)
33%
37%
  
32%
  
 
Our operating results in the first quarter partially reflect the change in the market environment that has occurred since the third quarter of last year. Shipments, particularly in the U.S. market, were sharply lower. However, selling prices during the period still reflect the effect of price increases set in different market conditions. Our operating income declined 5% year on year but our earnings per share declined further as in the first quarter of 2008 we benefited from a strong result on our equity investment in Ternium (NYSE: TX) which was not repeated this year. Our net financial debt (total financial debt less cash and other current investments) decreased by US$610.7 million to US$781.7 million during the quarter as we focused on reducing inventories in our production system.
 
 
 
Market Background and Outlook
 
Following their collapse in the second half of 2008 to a low of around US$30 per barrel at the end of the year, global oil prices have recovered slightly and begun to stabilize around a level of US$50 per barrel. Expectations have risen that declining non-OPEC production and OPEC production cuts can offset the decline in global consumption in the ongoing economic contraction. North American gas prices, however, have continued to fall during the first part of 2009 to current levels of around US$3.50 per million BTU as the carry over of 2008 US production increases combined with reduced demand has resulted in high levels of gas in storage.
 
The international count of active drilling rigs, as published by Baker Hughes, has shown a moderate decline so far this year. It averaged 1,025 during the first quarter of 2009, 6% lower than the fourth quarter of 2008 and 2% lower than the same quarter of the previous year. The corresponding rig count in USA, which is more sensitive to North American gas prices, has plummeted in the year to date and is now down 53% from its high in September 2008. It averaged 1,326 during the first quarter,30% lower than the fourth quarter of 2008 and 25% lower than the first quarter of 2008 and as of May 1, 2009 had fallen to 945. In Canada, the corresponding rig count, which is affected by seasonal drilling patterns, averaged 329 during the quarter, a decrease of 35% compared to first quarter of 2008.
 
Demand for our pipes from the global energy industry is being affected by the decline in oil and gas drilling activity and the actions taken by customers to adjust to current conditions, including procurement delays and cancellations and the postponement of new project activity. Demand in the US and Canada has been further affected by a continuing surge of Chinese OCTG imports which has resulted in extraordinarily high levels of inventories. Demand from other customers has been affected by the decline in activity in the industrial and power generation segments, particularly in Europe.
 
Following the high level of shipments for our large-diameter pipes for pipeline projects in South America during 2008, demand is expected to be lower this year reflecting delays and postponements in the implementation of new projects.
 
Steelmaking raw material costs for our seamless pipe products are expected to slightly decline in the coming quarters. However costs for our North American welded products are being adversely affected by very low production levels and high cost of steel procured under different market conditions.
 
Considering the decrease in apparent demand and declining prices we expect lower level of sales and EBITDA into the coming quarters.
 
 
 
Annual Shareholders Assembly
 
 
The annual general shareholders' meeting of the Company will take place at 11:00 am on June 3, 2009 in Luxembourg. The notice and agenda for the meeting, the shareholder meeting brochure and proxy statement together with the Company's 2008 annual report can be downloaded from our website at www.tenaris.com/investors and may be obtained on request by calling 1-800-555-2470 (within the USA) or + 1-267-468-0786 (outside the USA).
 
Analysis of 2009 First Quarter Results
 
Sales volume (metric tons)
Q1 2009
Q1 2008
Increase/(Decrease)
Tubes – Seamless
583,000
691,000
(16%)
Tubes – Welded
110,000
282,000
(61%)
Tubes – Total
693,000
973,000
(29%)
Projects – Welded
84,000
132,000
(36%)
Total
777,000
1,105,000
(30%)

Tubes
Q1 2009
Q1 2008
Increase/(Decrease)
(Net sales - $ million)
      
North America
1,015.8
832.6
22%
South America
264.5
238.2
11%
Europe
262.6
447.6
(41%)
Middle East & Africa
395.3
475.7
(17%)
Far East & Oceania
167.6
176.6
(5%)
Total net sales ($ million)
2,105.8
2,170.7
(3%)
Cost of sales (% of sales)
53%
54%
  
Operating income ($ million)
639.8
637.4
0%
Operating income (% of sales)
30%
29%
  


 
Net sales of tubular products and services decreased 3% to US$2,105.8 million in the first quarter of 2009, compared to US$2,170.7 million in the first quarter of 2008, as a 29% decrease in sales volume was largely offset by higher average selling prices. In North America, although shipments in Mexico remained stable, in the USA and Canada they were affected by the decline in drilling activity and the extraordinarily high levels of inventories mainly driven by Chinese OCTG imports. Sales in South America increased as higher average selling prices more than offset a decline in volumes sold. In Europe, sales were affected by continuing imports from China which are causing injury to the European pipe industry, a sharp decline in industrial activity, lower demand from distributors serving the process plant sector and lower sales of OCTG products. Sales in the Middle East and Africa declined as sales of OCTG products were lower throughout the region.
 

Projects
Q1 2009
Q1 2008
Increase/(Decrease)
Net sales ($ million)
222.2
271.7
(18%)
Cost of sales (% of sales)
70%
72%
  
Operating income ($ million)
49.0
51.3
(4%)
Operating income (% of sales)
22%
19%
  

 
 
 



 
Net sales of pipes for pipeline projects decreased 18% to US$222.2 million in the first quarter of 2009, compared to US$271.7 million in the first quarter of 2008, reflecting a lower level of shipments to gas and other pipeline projects in Brazil and Argentina.
 

Others
Q1 2009
Q1 2008
Increase/(Decrease)
Net sales ($ million)
121.5
183.8
(34%)
Cost of sales (% of sales)
94%
73%
  
Operating income ($ million)
(10.7)
22.2
(148%)
Operating income (% of sales)
(9%)
12%
  

Operating income from other products and services resulted in a loss of US$10.7 million in the first quarter of 2009, compared to a gain of US$22.2 million in the first quarter of 2008, as we recorded losses on our electric conduits operations in the USA and our HBI operations in Venezuela.
 
Selling, general and administrative expenses, or SG&A, increased as a percentage of net sales to 16.0% in the quarter ended March 31, 2009 compared to 15.7% in the corresponding quarter of 2008.
 
Net interest expense decreased to US$36.2 million in the first quarter of 2009 compared to a net interest expense of US$54.8 million in the same period of 2008, mainly reflecting a lower level of net debt.
 
Other financial results generated a loss of US$37.2 million during the first quarter of 2009, compared to a loss of US$14.3 million during the first quarter of 2008. These results largely reflect gains and losses on net foreign exchange transactions and the fair value of derivative instruments and are partially offset by changes to our net equity position. These gains and losses are mainly attributable to variations in the exchange rates between our subsidiaries' functional currencies (other than the US dollar) and the US dollar in accordance with IFRS.
 
Equity in earnings of associated companies generated a loss of US$8.5 million in the first quarter of 2009, compared to a gain of US$50.0 million in the first quarter of 2008. These results were derived mainly from our equity investment in Ternium (NYSE: TX).
 
Income tax charges totalled US$203.1 million in the first quarter of 2009, equivalent to 34% of income from continuing operations before equity in earnings of associated companies and income tax, compared to US$208.6 million, or 33% of income before equity in earnings of associated companies and income tax, in the first quarter of 2008.
 
Income attributable to minority interest was US$27.0 million in the first quarter of 2009, compared to US$26.9 million in the corresponding quarter of 2008.
 
 
 
Cash Flow and Liquidity
 
Net cash provided by operations during the first quarter of 2009 was US$763.4 million, compared to US$568.9 million in the first quarter of 2008. Working capital decreased by US$387.9 million during the quarter, as we reduced our inventories by US$527.7 million and our receivables by US$87.9 million, which was partially offset by a decrease in trade payables of US$254.8 million.
 
Capital expenditures amounted to US$119.8 million for the first quarter of 2009, compared to US$88.5 million in the first quarter of 2008. The increase in investments mainly reflect the progress in our new rolling mill in Mexico.
 
During the first quarter of 2009, total financial debt decreased by US$151.7 million to US$2,825,4 million at March 31, 2009 from US$2,977.0 million at December 31, 2008, and net financial debt decreased by US$610.7 million to US$781.7 million at March 31, 2009.
 
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

(all amounts in thousands of U.S. dollars, unless otherwise stated)
  
Three-month period ended March 31,
  
   
2009
    
2008
  
Continuing operations
  
(Unaudited)
  
Net sales
     2,449,485       2,626,187  
Cost of sales
     (1,380,415 )     (1,500,689 )
Gross profit
     1,069,070       1,125,498  
Selling, general and administrative expenses
     (392,355 )     (413,594 )
Other operating income (expense), net
     1,384       (991 )
Operating income
     678,099       710,913  
Interest income
     4,613       12,269  
Interest expense
     (40,827 )     (67,092 )
Other financial results
     (37,233 )     (14,302 )
Income before equity in earnings of associated companies and income tax
     604,652       641,788  
Equity in earnings of associated companies
     (8,459 )     49,994  
Income before income tax
     596,193       691,782  
Income tax
     (203,098 )     (208,606 )
Income for continuing operations
     393,095       483,176  
                 
Discontinued operations
                
Income for discontinued operations
     -       16,787  
                 
Income for the period
     393,095       499,963  
                 
Attributable to:
                
Equity holders of the Company
     366,047       473,043  
Minority interest
     27,048       26,920  
      393,095       499,963  



 
 
 

Consolidated Condensed Interim Statement of Financial Position
 
(all amounts in thousands of U.S. dollars)  
At March 31, 2009
    
At December 31, 2008
  
   
(Unaudited)
        
ASSETS
                        
Non-current assets
                        
  Property, plant and equipment, net
     2,936,160             2,982,871        
  Intangible assets, net
     3,760,964             3,826,987        
  Investments in associated companies
     501,745             527,007        
  Other investments
     37,727             38,355        
  Deferred tax assets
     370,633             390,323        
  Receivables
     57,214       7,664,443       82,752       7,848,295  
Current assets
                                
  Inventories
     2,563,726               3,091,401          
  Receivables and prepayments
     226,631               251,481          
  Current tax assets
     191,627               201,607          
  Trade receivables
     2,035,348               2,123,296          
  Other investments
     63,113               45,863          
  Cash and cash equivalents
     1,980,586       7,061,031       1,538,769       7,252,417  
                                 
                                 
Total assets
             14,725,474               15,100,712  
EQUITY
                                
Capital and reserves attributable to the Company’s equity holders
             8,399,259               8,176,571  
Minority interest
             531,681               525,316  
Total equity
             8,930,940               8,701,887  
LIABILITIES
                                
Non-current liabilities
                                
  Borrowings
     1,174,876               1,241,048          
  Deferred tax liabilities
     1,037,656               1,053,838          
  Other liabilities
     223,929               223,142          
  Provisions
     73,120               89,526          
  Trade payables
     1,216       2,510,797       1,254       2,608,808  
Current liabilities
                                
  Borrowings
     1,650,483               1,735,967          
  Current tax liabilities
     443,604               610,313          
  Other liabilities
     250,667               242,620          
  Provisions
     33,442               28,511          
  Customer advances
     263,571               275,815          
  Trade payables
     641,970       3,283,737       896,791       3,790,017  
                                 
                                 
Total liabilities
             5,794,534               6,398,825  
                                 
Total equity and liabilities
             14,725,474               15,100,712  


 
 
 

Consolidated Condensed Interim Statement of Cash Flows


   
Three-month period ended March 31,
  
(all amounts in thousands of U.S. dollars)
  
2009
    
2008
  
   
(Unaudited)
  
Cash flows from operating activities
            
Income for the period
     393,095       499,963  
Adjustments for:
                
Depreciation and amortization
     121,741       134,483  
Income tax accruals less payments
     (150,496 )     107,538  
Equity in earnings of associated companies
     8,459       (49,994 )
Interest accruals less payments, net
     24,167       54,308  
Changes in provisions
     (11,475 )     7,496  
Changes in working capital
     387,945       (218,720 )
Other, including currency translation adjustment
     (9,989 )     33,857  
Net cash provided by operating activities
     763,447       568,931  
                 
Cash flows from investing activities
                
Capital expenditures
     (119,829 )     (88,455 )
Acquisitions of minority interest
     (5,942 )     (1,026 )
Proceeds from disposal of property, plant and equipment and intangible assets
     2,579       5,007  
Investments in short terms securities
     (17,250 )     (47,918 )
Dividends and distributions received from associated companies
     940       -  
Other
     -       (3,428 )
Net cash (used in)  investing activities
     (139,502 )     (135,820 )
                 
Cash flows from financing activities
                
Proceeds from borrowings
     194,745       130,387  
Repayments of borrowings
     (340,683 )     (490,277 )
Net cash (used in)  financing activities
     (145,938 )     (359,890 )
Increase in cash and cash equivalents
     478,007       73,221  
                 
Movement in cash and cash equivalents
                
At the beginning of the period
     1,525,022       954,303  
Effect of exchange rate changes
     (34,322 )     45,461  
Increase in cash and cash equivalents
     478,007       73,221  
At March 31,
     1,968,707       1,072,985  
                 
Cash and cash equivalents
  
At March 31,
  
   
2009
    
2008
  
Cash and bank deposits
     1,980,586       1,080,555  
Bank overdrafts
     (11,879 )     (7,570 )
      1,968,707       1,072,985  


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