-----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, GAjZIcVPBVp9xt9Pv64nBElZkVXuzTEdGTHk8alUtFfg9w4Xp60Ce97X+apnKZ/t cgvFSG36emV0hVO4e/c2eQ== 0001157523-07-004668.txt : 20070507 0001157523-07-004668.hdr.sgml : 20070507 20070507121557 ACCESSION NUMBER: 0001157523-07-004668 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20070507 FILED AS OF DATE: 20070507 DATE AS OF CHANGE: 20070507 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: 07822941 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 a5395903.txt TENARIS S.A. 6-K 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 7, 2007 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 [X] 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 [X] 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 2007 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 7, 2007 Tenaris, S.A. By: /s/ Cecilia Bilesio - --------------------------- Cecilia Bilesio Corporate Secretary Tenaris Announces 2007 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--(BUSINESS WIRE)--May 4, 2007--Tenaris S.A. (NYSE:TS) (BI:TEN) (BMV:TS) (BCBA:TS) ("Tenaris") today announced its results for the quarter ended March 31, 2007 with comparison to its results for the quarter ended March 31, 2006. Summary of 2007 First Quarter Results (Comparison with fourth quarter and first quarter of 2006) Q1 2007 Q4 2006 Q1 2006 Net sales (US$ million) 2,425.3 2,460.9 (1%)1,621.9 50% Operating income (US$ million) 757.6 812.6 (7%) 597.1 27% Net income (US$ million) 509.4 612.0 (17%) 441.7 15% Shareholders' net income (US$ million) 480.3 574.8 (16%) 419.7 14% Earnings per ADS (US$) 0.81 0.97 (16%) 0.71 14% Earnings per share (US$) 0.41 0.49 (16%) 0.36 14% EBITDA (US$ million) 858.1 901.6 (5%) 651.8 32% EBITDA margin (% of net sales) 35% 37% 40% Our results in the first quarter continued to show strong year-on-year growth with net sales up 50%, operating income up 27% and earnings per share up 14%. Sequentially, however, revenues were flat, operating income declined 7% and earnings per share, on a comparable basis(1), declined 11%. Demand for our products and services outside North America remains firm but, in North America, it has been affected by the slowdown in Canada. Free cash flow (net cash provided by operations less capital expenditures) during the period totaled US$568.4 million, and net debt decreased to US$1,574.7 million at March 31, 2007. (1) Excluding the gain recorded on the sale of Dalmine Energie in the fourth quarter of 2006. Market Background and Outlook Oil prices fluctuated during the first quarter, declining at the beginning of the period before recovering towards the end. North American gas prices, which had declined sharply in the second half of last year falling below US$5 per million BTU in September, recovered to a range of US$7-8 per million BTU. The international count of active drilling rigs, as published by Baker Hughes, continued to rise and averaged 982 during the first quarter, an increase of 3% over the previous quarter and one of 10% compared to the same quarter of the previous year. In North America, however, where drilling activity is more sensitive to regional gas prices, the Canadian rig count registered a 20% decline in the first quarter of 2007 compared to the first quarter of 2006. The U.S. rig count remained stable showing a 1% increase during the first quarter of 2007 compared to the fourth quarter of 2006 and was up 14% compared to the first quarter of 2006. In addition to the slowdown in Canadian drilling activity during the recently-ended winter drilling season, sales of our tubular products and services in North America during the first quarter of 2007 were also affected by the increase in imports from China. Demand in the rest of the world, however, remains firm as oil and gas operators continue to increase investments in exploration and production activity. We expect that, based on current forward gas prices, drilling activity in Canada will recover in the next winter drilling season and that we will increase our worldwide sales of high-end products later in the year as we bring on stream new heat treatment and finishing facilities. Consequently, we should continue to record year-on-year growth in sales and maintain our segment operating margin at current levels. Sales of our large diameter pipes for pipeline projects in South America started to pick up at the end of the first quarter as we commenced deliveries to the GASCAC phase of the GASENE project in Brazil. Further increases in sales are expected during the year as we complete deliveries to this and other projects in Brazil and a delayed project in Argentina. Annual Shareholders Assembly The annual general shareholders' meeting of Tenaris will take place at 11:00 am on June 6, 2007 in Luxembourg. The notice and agenda for the meeting, the shareholder meeting brochure and proxy statement and the Company's 2006 annual report may be downloaded from our website at www.tenaris.com/investors and may be obtained on request by calling 1-800-990-1135 (within the USA) or +1-201-680-6630 (outside the USA). Analysis of 2007 First Quarter Results Sales volume (metric tons) Q1 2007 Q1 2006 Increase/(Decrease) Tubes - Seamless 746,000 714,000 4% Tubes - Welded 252,000 7,000 Tubes - Total 998,000 721,000 38% Projects - Welded 75,000 58,000 29% Total 1,073,000 779,000 38% Tubes Q1 2007 Q1 2006 Increase/(Decrease) (Net sales - $ million) North America 727.8 449.6 62% South America 260.5 218.8 19% Europe 418.7 296.2 41% Middle East & Africa 580.0 310.9 87% Far East & Oceania 157.7 172.6 (9%) Total net sales ($ million) 2,144.7 1,448.0 48% Cost of sales (% of sales) 50% 48% Operating income ($ million) 722.0 572.2 26% Operating income (% of sales) 34% 40% Net sales of tubular products and services rose 48% to US$2,144.7 million in the first quarter of 2007, compared to US$1,448.0 million in the first quarter of 2006, due primarily to the incorporation of sales from the former Maverick operations. On a like for like basis both average selling prices and sales volumes increased. Sales rose strongly in the Middle East and Africa on increased demand for our TenarisBlue(R) premium connections and other specialized OCTG products and services. In North America, on a like-for-like basis, sales declined reflecting the slowdown in drilling activity and distributor inventory adjustments in Canada and lower activity in Mexico. In Europe, sales of line pipe products to process and power plant customers increased as did hollows for gas cylinders and mechanical pipe for hydraulic cylinders. In South America, sales increased in Colombia and Argentina but sales of OCTG products and services were lower in Venezuela as PDVSA continued to draw down inventories. In the Far East and Oceania, sales declined primarily due to lower sales of OCTG products and services in the region. Projects Q1 2007 Q1 2006 Increase/(Decrease) Net sales ($ million) 124.4 96.2 29% Cost of sales (% of sales) 66% 65% Operating income ($ million) 26.3 16.3 61% Operating income (% of sales) 21% 17% Net sales of pipes for pipeline projects increased 29% to US$124.4 million in the first quarter of 2007, compared to US$96.2 million in the first quarter of 2006, primarily reflecting higher sales in Brazil where deliveries for the GASCAC phase of the GASENE project began during the period. Others Q1 2007 Q1 2006 Increase/(Decrease) Net sales ($ million) 156.2 77.6 101% Cost of sales (%of sales) 82% 77% Operating income ($ million) 9.3 8.6 8% Operating income (% of sales) 6% 11% Net sales of other products and services rose 101% to US$156.2 million in the first quarter of 2007, compared to US$77.6 million in the first quarter of 2006, reflecting the inclusion of sales of conduit pipes and higher sales of metallic structures by our Brazilian subsidiary. Selling, general and administrative expenses, or SG&A, increased as a percentage of net sales to 15.4% in the quarter ended March 31, 2007 compared to 13.4% in the corresponding quarter of 2006 due primarily to an increase in amortization expenses following the incorporation of Maverick. Amortization of customer relationships and other intangibles acquired with Maverick amounted to US$37 million in the quarter. Net interest expenses rose to US$35.5 million in the first quarter of 2007 compared to a net interest income of US$0.8 million in the same period of 2006 reflecting an increased net debt position following the Maverick acquisition. Other financial results recorded a loss of US$13.0 million during the first quarter of 2007, compared to a gain of US$9.7 million during the first quarter of 2006. These results largely reflect gains and losses on net foreign exchange transactions and the fair value of derivative instruments and are to a large extent offset by changes to our net equity position. They arise due to the fact that most of our subsidiaries prepare their financial statements in currencies other than the US dollar in accordance with IFRS. Equity in earnings of associated companies generated a gain of US$25.9 million in the first quarter of 2007, compared to a gain of US$21.5 million in the first quarter of 2006. These gains were derived mainly from our equity investment in Ternium. Income tax charges totalled US$225.5 million in the first quarter of 2007, equivalent to 32% of income before equity in earnings of associated companies and income tax, compared to US$190.0 million in the first quarter of 2006, equivalent to 31% of income before equity in earnings of associated companies and income tax. Income attributable to minority interest rose to US$29.1 million in the first quarter of 2007, compared to US$22.0 million in the corresponding quarter of 2006 reflecting higher operating and financial results at our Confab and NKKTubes subsidiaries. Cash Flow and Liquidity Net cash provided by operations during the first quarter of 2007 was US$688.3 million, compared to US$544.1 million in the first quarter of 2006. Working capital increased by US$90.5 million, reflecting principally a decline in trade payables of US$71.4 million and an increase in inventories of US$65.5 million. Capital expenditures amounted to US$119.9 million in the first quarter of 2007, compared to US$69.5 million in the first quarter of 2006. The increase reflects the progress of implementation of our two-year investment program to increase capacity for specialized products and investments in the former Maverick operations. During the first quarter of 2007, total financial debt decreased by US$253.0 million to US$3,398.2 million at March 31, 2007 from US$3,651.2 million at December 31, 2006. Net financial debt during the first quarter of 2007 decreased by US$520.6 million to US$1,574.7 million at March 31, 2007. Some of the statements contained in this press release are "forward-looking statements." Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to future oil and gas prices and their impact on investment programs by oil and gas companies. Consolidated Condensed Interim Income Statement Three-month period (Thousands of U.S. dollars) ended March 31, ---------------------- 2007 2006 ----------- ---------- Continuing operations (Unaudited) Net sales 2,425,299 1,621,891 Cost of sales (1,291,498) (816,327) ----------- ---------- Gross profit 1,133,801 805,564 Selling, general and administrative expenses (374,267) (216,640) Other operating income (expenses), net (1,937) 8,185 ----------- ---------- Operating income 757,597 597,109 Interest income 22,191 12,395 Interest expense (57,727) (11,639) Other financial results (13,043) 9,697 ----------- ---------- Income before equity in earnings of associated companies and income tax 709,018 607,562 Equity in earnings of associated companies 25,907 21,521 ----------- ---------- Income before income tax 734,925 629,083 Income tax (225,531) (190,026) ----------- ---------- Income for continuing operations 509,394 439,057 Discontinued operations Income (loss) for discontinued operations - 2,633 ----------- ---------- Income for the period 509,394 441,690 Attributable to: Equity holders of the Company 480,304 419,688 Minority interest 29,090 22,002 ----------- ---------- 509,394 441,690 ----------- ---------- Consolidated Condensed Interim Balance Sheet (Thousands of U.S. dollars) At March 31, 2007 At December 31, 2006 --------------------- --------------------- (Unaudited) ASSETS Non-current assets Property, plant and equipment, net 2,978,406 2,939,241 Intangible assets, net 2,826,641 2,844,498 Investments in associated companies 453,483 422,958 Other investments 26,807 26,834 Deferred tax assets 293,353 291,641 Receivables 39,330 6,618,020 41,238 6,566,410 ---------- ---------- Current assets Inventories 2,437,796 2,372,308 Receivables and prepayments 268,845 272,632 Current tax assets 160,676 202,718 Trade receivables 1,642,841 1,625,241 Other investments 188,688 183,604 Cash and cash equivalents 1,634,812 6,333,658 1,372,329 6,028,832 --------------------- --------------------- Total assets 12,951,678 12,595,242 EQUITY Capital and reserves attributable to the Company's equity holders Share capital 1,180,537 1,180,537 Legal reserves 118,054 118,054 Share premium 609,733 609,733 Currency translation adjustments 29,023 3,954 Other reserves 28,143 28,757 Retained earnings 3,877,888 5,843,378 3,397,584 5,338,619 ---------- ---------- Minority interest 387,552 363,011 ----------- ----------- Total equity 6,230,930 5,701,630 ----------- ----------- LIABILITIES Non-current liabilities Borrowings 2,765,327 2,857,046 Deferred tax liabilities 978,204 991,945 Other liabilities 193,339 186,724 Provisions 84,405 92,027 Trade payables 354 4,021,629 366 4,128,108 ---------- ---------- Current liabilities Borrowings 632,858 794,197 Current tax liabilities 693,545 565,985 Other liabilities 217,241 187,701 Provisions 22,729 26,645 Customer advances 365,861 352,717 Trade payables 766,885 2,699,119 838,259 2,765,504 -------- ----------- -------- ----------- Total liabilities 6,720,748 6,893,612 Total equity and liabilities 12,951,678 12,595,242 Consolidated Condensed Interim Cash Flow Statement Three-month period ended March 31, -------------------- (Thousands of U.S. dollars) 2007 2006 ---------- --------- Cash flows from operating activities (Unaudited) Income for the period 509,394 441,690 Adjustments for: Depreciation and amortization 100,487 54,675 Income tax accruals less payments 125,377 83,458 Equity in earnings of associated companies (25,907) (21,521) Interest accruals less payments, net 45,429 5,292 Income from disposal of investment - (6,933) Changes in provisions (7,230) 731 Changes in working capital (90,519) (24,257) Other, including currency translation adjustment 31,243 10,947 ---------- --------- Net cash provided by operating activities 688,274 544,082 ---------- --------- Cash flows from investing activities Capital expenditures (119,912) (69,529) Acquisitions of subsidiaries and minority interest (1,750) (29,809) Decrease in subsidiaries (1,195) - Proceeds from disposal of property, plant and equipment and intangible assets 2,693 1,820 Changes in restricted bank deposits - 648 Investments in short terms securities (5,084) (177,650) ---------- --------- Net cash used in investing activities (125,248) (274,520) ---------- --------- Cash flows from financing activities Dividends paid to minority interest in subsidiaries (3,359) (7,581) Proceeds from borrowings 48,174 101,085 Repayments of borrowings (360,899) (154,601) ---------- --------- Net cash used in financing activities (316,084) (61,097) ---------- --------- Increase in cash and cash equivalents 246,942 208,465 Movement in cash and cash equivalents At the beginning of the period 1,365,008 680,591 Effect of exchange rate changes 2,736 (1,834) Increase in cash and cash equivalents 246,942 208,465 At March 31, 1,614,686 887,222 ---------- --------- Cash and cash equivalents At March 31, -------------------- 2007 2006 Cash and bank deposits 1,634,812 910,991 Bank overdrafts (20,105) (22,369) Restricted bank deposits (21) (1,400) 1,614,686 887,222 CONTACT: Tenaris Nigel Worsnop, 1-888-300-5432 www.tenaris.com -----END PRIVACY-ENHANCED MESSAGE-----