-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TuAZnRo/RrSkpXef8v1bgdYdcyLV+Qv+rVlcXTX9DFJdDQz/C20WCtNCIC0IohNp pfg0JYofzXpxDQ61GkbcRw== 0001157523-05-001842.txt : 20050224 0001157523-05-001842.hdr.sgml : 20050224 20050224112156 ACCESSION NUMBER: 0001157523-05-001842 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050224 FILED AS OF DATE: 20050224 DATE AS OF CHANGE: 20050224 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TENARIS SA CENTRAL INDEX KEY: 0001190723 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31518 FILM NUMBER: 05636249 BUSINESS ADDRESS: STREET 1: 420 FIFTH AVENUE STREET 2: 18TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 212-376-6500 MAIL ADDRESS: STREET 1: 23 AVENUE MONTEREY CITY: LUXEMBOURG STATE: N4 ZIP: L 2086 6-K 1 a4829717.txt BUSINESS WIRE LATIN AMERICA 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 February 24, 2005 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__\/__ 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__\/__ 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 results for the fourth quarter of 2004. Tenaris Announces 2004 Annual and Fourth Quarter Results LUXEMBOURG--(BUSINESS WIRE)--Feb. 23, 2005--Tenaris S.A. (NYSE:TS) (Buenos Aires:TS) (BMV:TS) (MTA Italy:TEN) -- The financial and operational information contained in this press release is based on audited consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and presented in U.S. dollars. Tenaris S.A. ("Tenaris") today announces its results for the year and quarter ended December 31, 2004 with comparison to its results for the year and quarter ended December 31, 2003. Summary of 2004 Annual Results -- Net sales of US$4,136.1 million, up 30% from US$3,179.7 million -- Operating income of US$813.5 million, up 182% from US$288.2 million -- Net income of US$784.7 million, up 273% from US$210.3 million -- Net earnings per share of US$0.665 (US$6.65 per ADS), up 269% from US$0.18 per share -- Increase of 48% proposed in annual dividend to US$0.169 per share (US$1.69 per ADS) These results reflect strong market demand and growth in our seamless pipe business, where we are the leading suppliers of seamless pipe products to the global energy industry. Net sales of our seamless pipes, which accounted for 79% of our total net sales, rose 37% and we were able to increase our seamless pipe selling prices sufficiently to offset the impact of higher raw material costs. In addition, we recorded a strong equity income gain from our investment in Sidor, the Venezuelan steel producer, where we have recently increased our participation. We also recorded a one-time operating income gain of US$123.0 million following the conclusion of an arbitration award, pursuant to which Fintecna, an Italian state-owned company, is required to compensate us for losses incurred in respect of litigation settled in 2003 with a consortium led by BHP Billiton Petroleum Ltd. Excluding both the one-time gain recorded in 2004 in respect of the arbitration award and the related loss we recorded in 2003 in respect of the litigation settlement, operating income in 2004 rose 72% to US$690.5 million, or 17% of net sales, compared to US$402.4 million, or 13% of net sales, in 2003. On the same basis, operating income plus depreciation and amortization in 2004 rose 49% to US$898.6 million, or 22% of net sales, compared to US$602.2 million, or 19% of net sales, in 2003. Summary of 2004 Fourth Quarter Results -- Net sales of US$1,272.7 million, up 67% from US$761.6 million -- Operating income of US$355.4 million, compared to an operating loss of US$32.1 million -- Net income of US$467.4 million, up 34 times from US$13.7 million -- Net earnings per share of US$0.396 (US$3.96 per ADS), up from US$0.012 per share Excluding both the one-time gain recorded in the fourth quarter of 2004 in respect of the arbitration award and the related loss recorded in the fourth quarter of 2003 in respect of the litigation settlement, operating income in the fourth quarter of 2004 rose 205% to US$232.4 million, or 18% of net sales, compared to US$76.1 million, or 10% of net sales, in the fourth quarter of 2003. On the same basis, operating income plus depreciation and amortization recorded a fourth consecutive quarterly increase: it rose 123% to US$290.1 million, or 23% of net sales, compared to US$129.9 million, or 17% of net sales, in the fourth quarter of 2003, and 16% compared to US$250.4 million in the third quarter of 2004. Our net income result also benefited from a strong equity income gain on our investment in Sidor, which included (i) an ordinary gain of US$31.4 million, a non-recurring gain of US$83.1 million resulting from the exercise of an option to convert debt into equity and a non-recurring gain of US$34.6 million resulting from the reversal of an impairment charge. These fourth quarter results continue the positive trend seen in our quarterly results throughout the year. They reflect the continuing strength of demand in our core seamless pipe business, which is benefiting from increased investment in the global energy industry. Net sales of seamless pipes rose 69% compared to the fourth quarter of 2003 and 27% compared to the third quarter, reflecting higher volumes and prices. Market Background and Outlook In 2004, a number of factors, including higher energy demand growth, declining production rates from developed reserves and persistently high oil and gas prices, led the oil and gas majors, the national oil companies and other oil and gas producers to increase their investment in exploration and production. Rig count levels have risen during the year with strong increases seen in North and South America, and, in the second half of the year, in the Middle East. The same factors are likely to persist throughout 2005, which should result in further increases in global exploration and production activity. In particular, activity is expected to increase in the Middle East, Canada, Venezuela, West African deepwater, the Caspian and the development of gas reserves associated with major LNG projects. We estimate that global apparent consumption of seamless OCTG (oil country tubular goods) grew some 17% compared to 2003, and will grow further in 2005. Demand for other seamless products also increased contributing to an overall estimated increase in apparent consumption of seamless pipe products worldwide of some 12% in 2004 over 2003. As a result of this strong market demand selling prices for our seamless pipe products increased significantly over the course of the year and we were able to offset the effect of substantially higher raw material costs on our margins. Average selling prices and many of our raw material costs are expected to increase further in 2005. Demand for our welded pipe products, which depend to a substantial extent on specific projects, particularly those for the construction of oil and gas pipelines in the regional market of our two welded pipe mills in South America, can vary significantly from year to year. Projects to extend the gas pipeline infrastructure in Brazil and to construct an oil pipeline to pipe oil from reserves in Rio de Janeiro state to refineries in Sao Paolo state were suspended in the second half of 2003, abruptly affecting demand for our products. In the second half of 2004, gas pipeline infrastructure project activity resumed in Brazil. In Argentina, after two years with no significant pipeline investment activity, projects to expand the capacity of the existing gas pipeline infrastructure are expected to commence during 2005. We currently have significant orders for a number of projects in Brazil, including a bauxite slurry pipeline project, which should result in substantially higher sales of welded pipes in 2005. Assuming no major change in current conditions, we expect to register a significant increase in net sales for the second consecutive year and to maintain or further improve our current level of operating margins. Annual Dividend The board of directors proposes, for the approval of the annual general shareholders' meeting to be held on May 25, 2005, the payment of a dividend of US$0.169 per share (US$1.69 per ADS), or approximately US$200 million, with payment and ex-dividend dates of June 13, 2005 and June 8, 2005, respectively. Analysis of 2004 Annual Results Results for the year ended December 31, 2004 with comparison to the results for the corresponding period of 2003. (metric tons) Sales volume FY 2004 FY 2003 Increase/(Decrease) - ------------ ------- ------- ------------------- North America 757,000 608,000 25% Europe 679,000 617,000 10% Middle East & Africa 421,000 365,000 15% Far East & Oceania 412,000 366,000 13% South America 377,000 322,000 17% Total seamless pipes 2,646,000 2,278,000 16% Welded pipes 316,000 355,000 (11%) Total steel pipes 2,963,000 2,633,000 13% Sales volume of seamless pipes increased by 16% to 2,646,000 tons in 2004 from 2,278,000 tons in 2003. This includes 71,000 tons produced at Silcotub, the Romanian seamless pipe mill acquired in July, the majority of which were sold in Europe. Demand for our seamless pipe products increased in all regions led by higher demand from oil and gas customers. In North America, demand for our seamless steel pipe products increased due to higher exploration and production expenditure by Pemex, higher sales in Canada (related to an increased use of seamless pipes in oil and gas drilling activity resulting from the greater average depth of wells drilled), and higher sales to the NAFTA industrial and automotive market. In Europe, the increase in sales was primarily due to the incorporation of sales of Silcotub's products in the second half of the year, but also as a result of increased sales to oil and gas customers in the North Sea and Scandinavia, and in certain industrial segments such as automotive, hydraulic cylinders and construction machinery. Overall demand was affected, however, by slow growth in industrial activity and competition from low-cost producers in Eastern Europe. In the Middle East and Africa, demand increased due to the development of gas projects in Egypt and higher oil and gas production activity in the Middle East. Activity is expected to continue to increase in this region as Saudi Arabia increases its production capacity and deepwater projects in West Africa begin production. In the Far East and Oceania, demand increased due to stronger activity from the industrial sector in Japan and Korea and increased oil and gas drilling activity in Indonesia. Sales in China, our largest market in this region, remained stable. In South America, demand increased due to higher sales in Venezuela, following the general strike which affected demand in 2003, and higher drilling and industrial activity in Argentina. Sales volume of welded pipes decreased by 11% to 316,000 tons in 2004 from 355,000 tons in 2003. This decrease reflects substantially lower sales in the local Brazilian market following delays in implementing pipeline projects in the Brazilian market in the first half, whereas in the first half of 2003 demand for welded pipes for pipeline projects in the Brazilian market had been strong. Sales to projects in the non-regional markets of Africa and North America increased. Sales of electric energy in Italy remained stable at 3.0 TWh in 2004 as in 2003 and sales of natural gas increased by 30% to 652 million scm in 2004 from 503 million scm in 2003. The increases in sales of natural gas reflects the continuing expansion of the customer base. (US$ million) Net sales FY 2004 FY 2003 Increase/(Decrease) - -------------- ------- ------- ------------------- Seamless pipes 3,273.3 2,388.2 37% Welded pipes 348.1 350.7 (1%) Energy 417.9 333.2 25% Others 96.8 107.5 (10%) Total 4,136.1 3,179.7 30% Net sales in 2004 increased 30% to US$4,136.1 million, compared to US$3,179.7 million in 2003. Net sales of seamless pipes rose by 37%, reflecting strong market demand for our products and the incorporation of Silcotub in the second half of the year. Average selling prices for seamless pipes increased by 18% in 2004 compared to 2003. Net sales of welded pipes, which included US$68 million in sales of metal structures made by our Brazilian welded pipe subsidiary in 2004 and US$63 million of such sales in 2003, declined 1% as higher selling prices reflecting higher steel costs did not offset the reduction in sales volume. Net sales of electricity and natural gas to third parties by Dalmine Energie increased by 25% reflecting the continued expansion of the business and the higher value of the Euro against the U.S. dollar. Net sales of other goods and services, which in 2003 included US$49 million of sales of products whose sales have been discontinued, decreased 10%. Excluding such discontinued sales, net sales of other goods and services increased by 65% due primarily to the addition of sales to third parties of pre-reduced iron produced at our recently acquired Venezuelan HBI plant and increased sales of sucker rods used in oil extraction. (percentage of net sales) Cost of sales FY 2004 FY 2003 - -------------- ------- ------- Seamless pipes 63% 64% Welded pipes 72% 78% Energy 95% 95% Others 56% 79% Total 67% 69% Cost of sales, expressed as a percentage of net sales, decreased to 67% in 2004, compared to 69% in 2003. This decrease resulted primarily from an improvement in the gross margin recorded on the sales of seamless pipes and higher sales of seamless pipes as a proportion of total sales. Cost of sales for seamless pipe products, expressed as a percentage of net sales, declined from 64% to 63% as higher prices and volume-related efficiencies offset substantial increases in raw material costs. Cost of sales for welded pipe products, expressed as a percentage of net sales, decreased to 72% from 78% due to a higher gross margin on the sale of welded pipes reflecting higher associated selling expenses and the non-recurrence of operating losses on the sales of metal structures included in this segment. Cost of sales for energy products, expressed as a percentage of net sales, remained stable. Cost of sales for other products, expressed as a percentage of net sales, decreased primarily due to the discontinuation of sales of low-margin, non-pipe steel products produced by third parties. Selling, general and administrative expenses, or SG&A, declined, as a percentage of net sales, to 16.3% in 2004, compared to 17.8% of net sales during 2003, but rose in absolute terms to US$672.4 million from US$566.8 million. Selling expenses, on a per ton basis, rose primarily due to higher freight costs but remained stable when expressed as a percentage of net sales. Administrative expenses decreased, when expressed as a percentage of net sales, but rose in absolute terms due to the incorporation of acquisitions and higher labor costs including the effect of currency appreciations against the US dollar. Net financial income totalled US$5.8 million in 2004, compared to net financial expenses of US$29.4 million in 2003. Net interest expenses increased to US$32.7 million compared to US$16.7 million, reflecting a higher net debt position and rising interest rates. However, Tenaris recorded a gain of US$33.1 million on the fair value of its derivatives and net foreign exchange translations in 2004, compared to a loss of US$16.2 million in 2003. This gain was due primarily to the impact of the devaluation of the US dollar against the other currencies to which we have a net foreign exchange exposure and currency hedging. In accordance with IFRS, we recorded an increase in our debt of approximately US$45 million due to the appreciation of the Euro and the Japanese yen against the US dollar. Equity in earnings of associated companies generated a gain of US$206,0 million in 2004, compared to a gain of US$27.6 million in 2003. This gain results predominately from our investment, held through Ylopa Servicos de Consultadoria Lda. (Ylopa) and Consorcio Siderurgia Amazonia Ltd. (Amazonia), in Sidor, whose results have benefited from strong global demand and prices for steel products. The gain on this investment included (i) an ordinary gain of US$73.0 million, (ii) a non-recurring gain of US$51.9 million, following the reversal of an impairment provision recorded on our investment in Amazonia in 2003, and (iii) a non-recurring gain of US$83.1 million recorded in respect of Ylopa's conversion of its subordinated loan with Amazonia into equity, increasing our participation in Amazonia to 21.2% from 14.5% and our indirect participation in Sidor to 12.6% from 8.7%, and which reflects the difference between the value of the shares subsequently acquired pursuant to the conversion and the value of the loan that was converted. Income tax provisions of US$220.4 million were recorded during 2004, compared to US$63.9 million in 2003. Excluding the effect of non-recurring factors, such as an adjustment on net deferred tax assets and liabilities following the reduction in the corporate income tax rate in Mexico that came into force this year, income tax provisions represented approximately 36% of income before income tax, equity in earnings of associated companies and minority interest. This compares with an equivalent rate of 40% in the previous year. Analysis of 2004 Fourth Quarter Results (metric tons) Sales volume Q4 2004 Q4 2003 Increase/(Decrease) - ------------ ------- ------- ------------------- North America 226,000 164,000 38% Europe 185,000 145,000 28% Middle East & Africa 101,000 66,000 53% Far East & Oceania 98,000 80,000 23% South America 96,000 91,000 5% Total seamless pipes 707,000 545,000 30% Welded pipes 50,000 39,000 28% Total steel pipes 756,000 584,000 29% Sales volume of seamless pipes increased by 30% to 707,000 tons in the fourth quarter of 2004 from 545,000 tons in the same period of 2003, and up 11% from the previous quarter. This includes 48,000 tons produced by Silcotub, the majority of which were sold in Europe. Sales increased in all regions compared to the fourth quarter of 2003 but the increase was particularly strong in North America and the Middle East & Africa. Sales volumes of welded pipes increased by 28% to 50,000 tons in the fourth quarter of 2004 from 39,000 tons in the same period of 2003 but declined by 56% compared to the previous quarter. These sales were made principally in the local Brazilian market where demand has been recovering after a period in which investments in oil and gas pipeline construction activity were effectively halted and which was reflected in the low sales volumes recorded in the fourth quarter of 2003. (US$ million) Net sales Q4 2004 Q4 2003 Increase/(Decrease) - ---------- ------- ------- ------------------- Seamless pipes 1,006.2 595.2 69% Welded pipes 77.7 51.0 52% Energy 140.6 99.2 42% Others 48.2 16.2 198% Total 1,272.7 761.6 67% Net sales in the quarter ended December 31, 2004 increased 67% to US$1,272.7 million, compared to US$761.6 million in the corresponding quarter of 2003. Net sales of seamless pipes rose by 69%, due to higher average selling prices and higher sales volumes. Net sales of welded pipes, which included US$17.5 million in sales of metal structures made by our Brazilian welded pipe subsidiary in the fourth quarter of 2004 and US$16.6 million of such sales in the fourth quarter of 2003, rose by 52% due to a higher sales volume. Net sales of energy rose by 42% due to continued expansion in the business and the higher value of the Euro against the US dollar. Net sales of other goods and services increased 198% due to the start of sales to third parties of pre-reduced hot briquetted iron and higher sales of sucker rods used in oil extraction. (percentage of net sales) Cost of sales Q4 2004 Q4 2003 - -------------- ------- ------- Seamless pipes 62% 66% Welded pipes 72% 85% Energy 92% 93% Others 52% 64% Total 66% 70% Cost of sales, expressed as a percentage of net sales, decreased to 66% in the fourth quarter of 2004, compared to 70% in the same period of 2003. This decrease resulted primarily from an improvement in the gross margin recorded on the sales of seamless pipes and higher sales of seamless pipes as a proportion of total sales. Cost of sales for seamless pipe products, expressed as a percentage of net sales, decreased to 62% in the fourth quarter of 2004 compared to 66% in the same period of 2003 as higher average selling prices and volume-related efficiencies offset increased raw material costs. Selling, general and administrative expenses, or SG&A, declined as a percentage of net sales to 15.4% in the quarter ended December 31, 2004 compared to 19.4% in the corresponding quarter of 2003 but rose in absolute terms to US$196.2 million compared to US$147.8 million. Selling expenses, on a per ton basis, rose due to higher freight costs and administrative expenses increased in absolute terms due to higher expenses associated with the incorporation of new subsidiaries and higher labor costs associated with currency movements and higher end-of-year bonuses. Net financial income totalled US$28.3 million in the fourth quarter of 2004, compared to net financial income of US$7.2 million in the same period of 2003. Net interest expenses increased to US$10.6 million compared to US$3.8 million, reflecting a higher net debt position and higher interest rates. However, Tenaris recorded a gain of US$39.6 million on the fair value of its derivatives and net foreign exchange translations in the fourth quarter of 2004, compared to a gain of US$10.1 million in the corresponding quarter of 2003. This gain was due primarily to the impact of the devaluation of the US dollar against the other currencies to which we have a net foreign exchange exposure and our currency hedging activities. Equity in earnings of associated companies generated a gain of US$149.1 million in the fourth quarter of 2004, compared to a gain of US$11.3 million in the fourth quarter of 2003. This gain, as discussed above, included non-recurring gains of US$117.7 million. Cash Flow and Liquidity Net cash provided by operations during 2004 was US$98.3 million. Cash flow from operations was affected by a substantial increase in working capital of US$621.2 million, reflecting an increase in inventories of US$411.0 million, a net increase in trade receivables less customer advances and trade payables of US$82.8 million, and the payment of the first and second instalments of the liability towards the consortium led by BHP Billiton Petroleum Ltd. (US$116.9 million). A third and final instalment on this liability of UKGBP 30.4 million (approximately US$62 million) is due to be paid in December 2005 but we expect to receive the payment due from Fintecna of EUR 92.6 million (approximately US$126 million) following the arbitration award prior to such payment. The increase in our cost of inventories is mainly due to substantial increases in raw material costs and an increase in business activity. The increase in our trade receivables of US$271.2 million reflects higher quarterly net sales. Net cash used in investment activities was US$199.9 million which included US$183.3 million in capital expenditure, US$97.6 million in acquisitions, dividends of US$48.6 million received on our indirect investments in Sidor and in the release of US$20.4 million held in trust funds. Capital expenditure in 2004 rose to US$183.3, compared to US$162.6 million in 2003, and is expected to increase significantly in 2005 due to our project to build a power generation facility at our mill in Italy, an acceleration of investment in finishing facilities to add capacity in high value products, and investments in Silcotub which was acquired in 2004. Cash and cash equivalents, excluding investments of US$119.7 million in trust funds originally established in 2001 to support our Argentine operations, increased by US$63.4 million to US$311.6 million during 2004. Total financial debt increased by US$425.7 million to US$1,259.3 million from US$833.7 million at December 31, 2003. A substantial proportion of our total financial debt (67%) falls due within the next twelve months and we plan to extend the average maturity of our debt during 2005. We also expect that our total financial debt will reduce in 2005 as we expect cash flow from operations to be higher than in 2004. Some of the statements contained in this press release are "forward-looking statements." Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to future oil prices and their impact on investment programs by oil companies. Consolidated Income Statement Three-month period Fiscal year ended ended December 31, December 31, (All amounts in US$ -------------------- ----------------------- thousands) 2004 2003 2004 2003 Net sales 1,272,711 761,566 4,136,063 3,179,652 Cost of sales (837,531) (536,357) (2,776,936) (2,207,827) ---------- --------- ----------- ----------- Gross profit 435,180 225,209 1,359,127 971,825 Selling, general and administrative expenses (196,162) (147,758) (672,449) (566,835) Other operating income and expenses 116,358 (109,519) 126,840 (116,800) ---------- --------- ----------- ----------- Operating income 355,376 (32,068) 813,518 288,190 Financial income (expenses), net 28,257 7,183 5,802 (29,420) ---------- --------- ----------- ----------- Income before equity in earnings (losses) of associated companies, income tax and minority interest 383,633 (24,885) 819,320 258,770 Equity in earnings (losses) of associated companies 149,068 11,312 206,037 27,585 ---------- --------- ----------- ----------- Income before income tax and minority interest 532,701 (13,573) 1,025,357 286,355 Income tax (53,192) 26,130 (220,376) (63,918) ---------- --------- ----------- ----------- Net income before minority interest 479,509 12,557 804,981 222,437 Minority interest (12,087) 1,126 (20,278) (12,129) ---------- --------- ----------- ----------- Net income 467,422 13,683 784,703 210,308 Consolidated Balance Sheet December 31, 2004 December 31, 2003 (All amounts in US$ thousands) Assets Non-current assets Property, plant and equipment, net 2,164,601 1,960,314 Intangible assets, net 49,211 54,037 Investments in associated companies 99,451 45,814 Other investments 24,395 23,155 Deferred tax assets 161,173 130,812 Receivables 151,365 2,650,196 59,521 2,273,653 Current assets Inventories 1,269,470 831,879 Receivables and prepayments 374,446 165,134 Trade receivables 936,931 652,782 Other investments 119,666 138,266 Cash and cash equivalents 311,579 3,012,092 247,834 2,035,895 Total assets 5,662,288 4,309,548 Equity and Liabilities Shareholders' equity 2,495,924 1,841,280 Minority interest 165,271 119,984 Non-current liabilities Borrowings 420,751 374,779 Deferred tax liabilities 371,975 418,333 Other liabilities 172,442 191,540 Provisions 31,776 23,333 Trade payables 4,303 1,001,247 11,622 1,019,607 Current liabilities Borrowings 838,591 458,872 Current tax liabilities 222,735 108,071 Other liabilities 176,393 207,594 Provisions 42,636 39,624 Customers advances 127,399 54,721 Trade payables 592,092 1,999,846 459,795 1,328,677 Total liabilities 3,001,093 2,348,284 Total equity and liabilities 5,662,288 4,309,548 Consolidated Cash Flow Statement Three-month period Fiscal year ended ended December 31, December 31, (All amounts in US$ thousands) 2004 2003 2004 2003 Cash flows from operating activities Net income 467,422 13,683 784,703 210,308 Depreciation and amortization 57,750 53,862 208,119 199,799 Provision for BHP proceeding 114,182 - 114,182 Fintecna arbitration award (126,126) - (126,126) - Income tax accruals less payments 8,723 (72,752) 44,659 (138,570) Equity in (earnings) losses of associated companies (149,068) (11,312) (206,037) (27,585) Interest accruals less payments, net 9,843 (2,479) 16,973 (3,032) Net provisions 4,445 (2,780) 11,455 (13) Power plant impairment 11,705 - 11,705 - Result from disposition of investment in associated companies - (1,018) - (1,018) Minority interest 12,087 (1,126) 20,278 12,129 Change in working capital (209,259)(110,552) (621,187)(107,156) Currency translation adjustment and others (35,518) 43,126 (46,254) 16,592 ------------------ ------------------ Net cash provided by operating activities 52,004 22,834 98,288 275,636 ------------------ ------------------ Cash flows from investing activities Capital expenditures (60,834) (39,164) (183,312)(162,624) Acquisitions of subsidiaries and associates, net of cash provided by business acquisitions (40) (3,627) (97,595) (65,283) Cost of disposition of property, plant and equipment and intangible assets 1,762 2,784 12,054 5,965 Proceeds from sales of investments in associates - 1,018 - 1,124 Convertible loan to associated companies - - - (31,128) Dividends and distributions received from associated companies 8,003 - 48,598 - Acquisitions of minority interest - (299) - (299) Changes in Trust Fund 20,359 - 20,359 - ------------------ ------------------ Net cash used in investing activities (30,750) (39,288) (199,896)(252,245) Cash flows from financing activities Dividends paid in cash - - (135,053)(115,002) Dividends paid to minority interest in subsidiaries (8) (8,088) (31) (14,064) Proceeds from borrowings 180,159 219,192 676,862 590,490 Repayments of borrowings (174,609)(155,870) (376,768)(544,606) ------------------ ------------------ Net cash provided by (used in) financing activities 5,542 55,234 165,010 (83,182) ------------------ ------------------ Increase (decrease) in cash and cash equivalents 26,796 38,780 63,402 (59,791) Movement in cash and cash equivalents At the beginning of the year, 287,424 208,592 247,834 304,536 Effect of exchange rate changes (2,641) 462 343 3,089 Increase / (Decrease) in cash and cash equivalents 26,796 38,780 63,402 (59,791) ------------------ ------------------ At December 31, 311,579 247,834 311,579 247,834 ------------------ ------------------ CONTACT: Tenaris Nigel Worsnop, 888-300-5432 www.tenaris.com 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. Tenaris, S.A. Date: February 24, 2005 By: /s/ Cecilia Bilesio ----------------------- Cecilia Bilesio Corporate Secretary -----END PRIVACY-ENHANCED MESSAGE-----