-----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, N9CDRW8sOjyEsG6uxPMl5TfGt6sRN+m0zr5k9VZ+VyiQ3Fimz4UbbLEzxv4LihNI kS0wrfU6SBWnfuoaKvCZeA== 0001157523-07-007847.txt : 20070806 0001157523-07-007847.hdr.sgml : 20070806 20070806105051 ACCESSION NUMBER: 0001157523-07-007847 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20070803 FILED AS OF DATE: 20070806 DATE AS OF CHANGE: 20070806 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: 071026178 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 a5465081.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 August 6, 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 Second 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: August 6, 2007 Tenaris, S.A. By: /s/ Cecilia Bilesio - ----------------------- Cecilia Bilesio Corporate Secretary Tenaris Announces 2007 Second 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)--Aug. 3, 2007--Tenaris S.A. (NYSE:TS)(BI:TEN)(BMV:TS)(BCBA:TS) ("Tenaris") today announced its results for the quarter and semester ended June 30, 2007 with comparison to its results for the quarter and semester ended June 30, 2006. Summary of 2007 Second Quarter Results (Comparison with first quarter of 2007 and second quarter of 2006) -------- ------------ ------------- Q2 2007 Q1 2007 Q2 2006 -------- ------------ ------------- Net sales (US$ million) 2,604.2 2,425.3 7% 1,841.3 41% Operating income (US$ million) 780.4 757.6 3% 690.1 13% Net income (US$ million) 534.5 509.4 5% 495.8 8% Shareholders' net income (US$ million) 496.0 480.3 3% 471.8 5% Earnings per ADS (US$) 0.84 0.81 3% 0.80 5% Earnings per share (US$) 0.42 0.41 3% 0.40 5% EBITDA (US$ million) 910.7 858.1 6% 745.2 22% EBITDA margin (% of net sales) 35% 35% 40% Our results in the second quarter continue to reflect a solid operating performance. Net sales were up 41%, operating income up 13% and earnings per share up 5% year on year, as a positive operating environment in the rest of the world offset a sharp decline in drilling activity in Canada. We continue to make progress in integrating our North American operations and positioning our commercial offer with its full range of products. Free cash flow (net cash provided by operations less capital expenditures) totaled US$101.9 million, and net financial debt (total financial debt less cash and other current investments) increased to US$3,761.7 million at June 30, 2007 following the Hydril acquisition and payment of an annual dividend. Appointment of Chief Financial Officer Carlos Condorelli, who was recently elected to serve as a member of our Board of Directors, will retire from his position as our Chief Financial Officer as of September 30, 2007. He will continue to serve as an advisor to Paolo Rocca, our Chairman and CEO. Ricardo Soler, who served as Executive Vice-President of Confab, our Brazilian welded pipe subsidiary, until November 2006 and is currently serving as CEO of our recently acquired Hydril subsidiary, will be our new CFO. As our CFO since inception as a publicly listed company in 2002, Carlos Condorelli has played a key role in the growth of Tenaris overseeing the exchange offer through which Tenaris was consolidated into a single, global enterprise as well as the subsequent expansion of the Company into Eastern Europe and North America. Consolidation of Hydril These second quarter results include the consolidation of Hydril's results of operations and financial condition beginning in May. Hydril's premium connection business has been included in our Tubes segment and a new segment has been created for Hydril's pressure control business. Market Background and Outlook After fluctuating in the first quarter, oil prices have resumed the upwards trend shown in the past three years as global demand projections have been revised upwards. On the other hand, North American gas prices, which had shown signs of recovery in the first half of 2007 have been falling again as the level of gas in storage has risen to the higher end of the seasonal range. The international count of active drilling rigs, as published by Baker Hughes, continued to rise and averaged 1002 during the second quarter, an increase of 2% 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, in addition to showing its customary seasonal weakness, registered a 51% decline in the second quarter of 2007 compared to the same quarter of 2006. The U.S. rig count remained stable showing a 1% increase during the second quarter of 2007 compared to the first quarter of 2007 and was up 8% compared to the second quarter of 2006. The decline in the Canadian rig count was to a level last seen in 2002 and was concentrated in Western Canadian gas drilling. With North American gas prices continuing to fall, any recovery in Canadian drilling activity in the second half of the year is likely to be limited. Demand in the rest of the world, however, remains firm as oil and gas operators continue to increase investments in exploration and production activity. The costs of our steelmaking raw materials and energy have risen in the year to date and these cost increases will be more fully reflected in our results for the second half. However, continuing improvements in our product mix should offset the impact of higher costs and the normal seasonal decline in seamless pipe sales volumes in the third quarter on our operating margins in the second half. Sales of our pipes for pipeline projects in South America picked up at the end of the first quarter as we commenced deliveries to the GASCAC phase of the GASENE project in Brazil. Sales are expected to remain strong during the rest of the year as we complete deliveries to this and other projects in Brazil. Analysis of 2007 Second Quarter Results - -------------------------- --------- ------- ------------------- Sales volume (metric tons) Q2 2007 Q2 2006 Increase/(Decrease) - -------------------------- --------- ------- ------------------- Tubes - Seamless 750,000 765,000 (2%) Tubes - Welded 215,000 13,000 Tubes - Total 965,000 778,000 24% Projects - Welded 115,000 69,000 67% Total 1,080,000 847,000 28% - ------------------------------ ------- ------- ------------------- Tubes Q2 2007 Q2 2006 Increase/(Decrease) - ------------------------------ ------- ------- ------------------- (Net sales - US$ million) North America 693.8 404.4 72% South America 326.5 238.4 37% Europe 421.6 339.1 24% Middle East & Africa 547.3 494.0 11% Far East & Oceania 203.2 175.5 16% Total net sales (US$ million) 2,192.3 1,651.4 33% Cost of sales (% of sales) 50% 46% Operating income (US$ million) 719.5 676.8 6% Operating income (% of sales) 33% 41% Net sales of tubular products and services rose 33% to US$2,192.3 million in the second quarter of 2007, compared to US$1,651.4 million in the second quarter of 2006, due primarily to the incorporation of sales from the former Maverick and Hydril operations. On a like for like basis, average selling prices rose largely due to product mix improvements. In North America, sales were affected by a sharp decline in drilling activity in Canada, but sales of OCTG products rose in Mexico reflecting a moderate increase in oil and gas drilling activity. In South America, sales benefited from a recovery in demand in Venezuela. In the Middle East and Africa, sales of premium connection and other specialized products increased but demand for API products was lower in some markets following a build up of stocks in 2006. In Europe, sales increased primarily due to an increase in average selling prices. - ------------------------------ ------- ------- ------------------- Projects Q2 2007 Q2 2006 Increase/(Decrease) - ------------------------------ ------- ------- ------------------- Net sales (US$ million) 200.8 104.8 92% Cost of sales (% of sales) 72% 73% Operating income (US$ million) 38.3 11.0 248% Operating income (% of sales) 19% 11% Net sales of pipes for pipeline projects increased 92% to US$200.8 million in the second quarter of 2007, compared to US$104.8 million in the second quarter of 2006, reflecting higher sales in Brazil where deliveries for the GASCAC phase of the GASENE project which commenced at the end of the first quarter continued during the period. - ----------------------------------- -------------------------- Pressure Control Q2 2007 - ----------------------------------- -------------------------- Net sales (US$ million) 49.2 Cost of sales (% of sales) 61% Operating income (US$ million) 9.2 Operating income (% of sales) 19% Net sales of pressure control products amounted to US$49.2 million in the two months since we acquired this business from Hydril. The business has a good backlog of orders and sales are expected to remain strong into 2009. - ------------------------------ ------- ------- ------------------- Others Q2 2007 Q2 2006 Increase/(Decrease) - ------------------------------ ------- ------- ------------------- Net sales (US$ million) 161.8 85.2 90% Cost of sales (% of sales) 79% 74% Operating income (US$ million) 13.4 2.3 484% Operating income (% of sales) 8% 3% Net sales of other products and services rose 90% to US$161.8 million in the second quarter of 2007, compared to US$85.2 million in the second quarter of 2006, reflecting the inclusion of sales of conduit pipes. Selling, general and administrative expenses, or SG&A, increased as a percentage of net sales to 15.7% in the quarter ended June 30, 2007 compared to 13.4% in the corresponding quarter of 2006 due primarily to an increase in amortization expenses following the incorporation of Maverick and Hydril. Amortization of customer relationships and other intangibles acquired with Maverick and Hydril amounted to US$58 million in the quarter, of which US$19 million corresponded to Hydril. Other income and expenses included an expense of US$10.3 million relating to the settlement of outstanding redemptions on Maverick's 2005 notes. Net interest expenses rose to US$47.8 million in the second quarter of 2007 compared to US$1.2 million in the same period of 2006 reflecting an increased net debt position following the Maverick and Hydril acquisitions. Other financial results recorded a gain of US$15.1 million during the second quarter of 2007, compared to a gain of US$5.4 million during the second 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$29.4 million in the second quarter of 2007, compared to a gain of US$25.6 million in the second quarter of 2006. These gains were derived mainly from our equity investment in Ternium. Income tax charges totaled US$242.7 million in the second quarter of 2007, equivalent to 32% of income before equity in earnings of associated companies and income tax, compared to US$225.7 million in the second quarter of 2006, equivalent to 33% of income before equity in earnings of associated companies and income tax. Income attributable to minority interest rose to US$38.5 million in the second quarter of 2007, compared to US$24.0 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 second quarter of 2007 was US$211.1 million (US$899.4 million in the first half), compared to US$170.0 million in the second quarter of 2006 (US$714.1 million in the first half). Cash flow in the second quarter is affected by the concentration of income tax payments made in this quarter. Working capital increased by US$34.8 million during the second quarter principally in our Projects segment. Capital expenditures amounted to US$109.2 million in the second quarter of 2007 ($229.1 million in the first half), compared to US$99.6 million in the second quarter of 2006 (US$169.1 million in the first half). These expenditures reflect the progress of implementation of our two-year investment program to increase capacity for specialized products. During this second quarter of 2007 we completed construction of new heat treatment plants in Mexico and Argentina. During the first half of 2007, total financial debt increased by US$1,171.0 million to US$4,822.3 million at June 30, 2007 from US$3,651.2 million at December 31, 2006. Net financial debt during the first half of 2007 increased by US$1,666.4 million to US$3,761.7 million at June 30, 2007 following the acquisition of Hydril for a total consideration of $2.0 billion and the payment of $354 million as an annual dividend in June 2007. Analysis of 2007 First Half Results Net income attributable to equity holders in the company during the first semester of 2007 was US$976.3 million, or US$0.83 per share (US$1.65 per ADS), which compares with net income attributable to equity holders in the company during the first semester of 2006 of US$891.5 million, or US$0.76 per share (US$1.51 per ADS). Operating income was US$1,538.0 million, or 31% of net sales, compared to US$1,287.2 million, or 37% of net sales. Operating income plus depreciation and amortization was US$1,768.8 million, or 35% of net sales, compared to US$1,397.0 million, or 40% of net sales. - -------------------------- --------- --------- ------------------- Sales volume (metric tons) H1 2007 H1 2006 Increase/(Decrease) - -------------------------- --------- --------- ------------------- Tubes - Seamless 1,497,000 1,480,000 1% Tubes - Welded 466,000 20,000 Tubes - Total 1,963,000 1,500,000 31% Projects - Welded 190,000 127,000 50% Total 2,153,000 1,627,000 32% - ------------------------------- ------- ------- ------------------- Tubes H1 2007 H1 2006 Increase/(Decrease) - ------------------------------- ------- ------- ------------------- (Net sales - US$ million) North America 1,421.6 853.9 66% South America 587.1 457.2 28% Europe 840.3 635.2 32% Middle East & Africa 1,127.2 804.9 40% Far East & Oceania 360.9 348.2 4% Total net sales (US$ million) 4,337.1 3,099.4 40% Cost of sales (% of sales) 50% 47% Operating income (US$ million) 1,441.5 1,249.0 15% Operating income (% of sales) 33% 40% Net sales of tubular products and services rose 40% to US$4,337.1 million in the first half of 2007, compared to US$3,099.4 million in the first half of 2006, due primarily to the incorporation of sales from the former Maverick and Hydril operations. On a like for like basis, average selling prices increased due largely to product mix improvements and volumes registered a marginal increase. - ------------------------------- ------- ------- ------------------- Projects H1 2007 H1 2006 Increase/(Decrease) - ------------------------------- ------- ------- ------------------- Net sales (US$ million) 325.3 201.0 62% Cost of sales (% of sales) 70% 70% Operating income (US$ million) 64.6 27.3 137% Operating income (% of sales) 20% 14% Net sales of pipes for pipeline projects increased 62% to US$325.3 million in the first half of 2007, compared to US$201.0 million in the first half of 2006, reflecting higher sales in Brazil where deliveries for the GASCAC phase of the GASENE project began during the period. - ------------------------------ ------------- Pressure Control H1 2007 - ------------------------------ ------------- Net sales (US$ million) 49.2 Cost of sales (% of sales) 61% Operating income (US$ million) 9.2 Operating income (% of sales) 19% - ------------------------------- ------- ------- ------------------- Others H1 2007 H1 2006 Increase/(Decrease) - ------------------------------- ------- ------- ------------------- Net sales (US$ million) 318.0 162.8 95% Cost of sales (% of sales) 80% 75% Operating income (US$ million) 22.6 10.9 109% Operating income (% of sales) 7% 7% Net sales of other products and services rose 95% to US$318.0 million in the first half of 2007, compared to US$162.8 million in the first half of 2006, reflecting the inclusion of sales of conduit pipes. Selling, general and administrative expenses, or SG&A, increased as a percentage of net sales to 15.6% in the semester ended June 30, 2007 compared to 13.4% in the corresponding semester of 2006 due primarily to an increase in amortization expenses following the incorporation of Maverick and Hydril. Amortization of customer relationships and other intangibles acquired with Maverick and Hydril amounted to US$95 million in the semester, of which US$19 million corresponded to Hydril. Net interest expenses rose to US$83.3 million in the first half of 2007 compared to US$0.5 million in the same period of 2006 reflecting an increased net debt position following the Maverick and Hydril acquisitions. Other financial results recorded a gain of US$2.1 million during the first half of 2007, compared to a gain of US$15.1 million during the first half 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$55.3 million in the first half of 2007, compared to a gain of US$47.1 million in the first half of 2006. These gains were derived mainly from our equity investment in Ternium. Income tax charges totaled US$468.2 million in the first half of 2007, equivalent to 32% of income before equity in earnings of associated companies and income tax, compared to US$415.8 million in the first half of 2006, equivalent to 32% of income before equity in earnings of associated companies and income tax. Income attributable to minority interest rose to US$67.6 million in the first half of 2007, compared to US$46.0 million in the corresponding semester of 2006 reflecting higher operating and financial results at our Confab and NKKTubes subsidiaries. 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 Interim Income Statement --------------------- ----------------------- (all amounts in thousands of U.S. dollars, unless Three-month period Six-month period ended otherwise stated) ended June 30, June 30, --------------------- ----------------------- 2007 2006 2007 2006 ----------- --------- ----------- ----------- Continuing operations (Unaudited) (Unaudited) Net sales 2,604,206 1,841,346 5,029,505 3,463,237 Cost of sales (1,404,558) (903,261) (2,696,056) (1,719,588) ----------- --------- ----------- ----------- Gross profit 1,199,648 938,085 2,333,449 1,743,649 Selling, general and administrative expenses (408,511) (246,142) (782,778) (462,782) Other operating income (expense), net (10,723) (1,880) (12,660) 6,305 ----------- --------- ----------- ----------- Operating income 780,414 690,063 1,538,011 1,287,172 Interest income 20,208 13,221 42,399 25,616 Interest expense (67,996) (14,437) (125,723) (26,076) Other financial results 15,121 5,386 2,078 15,083 ----------- --------- ----------- ----------- Income before equity in earnings of associated companies and income tax 747,747 694,233 1,456,765 1,301,795 Equity in earnings of associated companies 29,398 25,551 55,305 47,072 ----------- --------- ----------- ----------- Income before income tax 777,145 719,784 1,512,070 1,348,867 Income tax (242,659) (225,739) (468,190) (415,765) ----------- --------- ----------- ----------- Income for continuing operations 534,486 494,045 1,043,880 933,102 Discontinued operations Income for discontinued operations - 1,719 - 4,352 ----------- --------- ----------- ----------- Income for the period 534,486 495,764 1,043,880 937,454 ----------- --------- ----------- ----------- Attributable to: Equity holders of the Company 495,950 471,771 976,254 891,459 Minority interest 38,536 23,993 67,626 45,995 ----------- --------- ----------- ----------- 534,486 495,764 1,043,880 937,454 ----------- --------- ----------- ----------- Consolidated Interim Balance Sheet -------------------- -------------------- (all amounts in thousands of U.S. dollars) At June 30, 2007 At December 31, 2006 -------------------- -------------------- (Unaudited) ASSETS Non-current assets Property, plant and equipment, net 3,228,277 2,939,241 Intangible assets, net 4,925,668 2,844,498 Investments in associated companies 478,663 422,958 Other investments 40,829 26,834 Deferred tax assets 337,460 291,641 Receivables 43,879 9,054,776 41,238 6,566,410 --------- --------- Current assets Inventories 2,640,572 2,372,308 Receivables and prepayments 258,930 272,632 Current tax assets 200,650 202,718 Trade receivables 1,818,443 1,625,241 Other investments 169,411 183,604 Cash and cash equivalents 891,159 5,979,165 1,372,329 6,028,832 --------- ---------- --------- ---------- Total assets 15,033,941 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 141,928 3,954 Other reserves 27,931 28,757 Retained earnings 4,019,677 6,097,860 3,397,584 5,338,619 --------- ---------- --------- ---------- Minority interest 427,557 363,011 ---------- ---------- Total equity 6,525,417 5,701,630 ---------- ---------- LIABILITIES Non-current liabilities Borrowings 3,955,243 2,857,046 Deferred tax liabilities 1,358,852 991,945 Other liabilities 218,543 186,724 Provisions 92,899 92,027 Trade payables 343 5,625,880 366 4,128,108 --------- --------- Current liabilities Borrowings 867,049 794,197 Current tax liabilities 397,853 565,985 Other liabilities 261,535 187,701 Provisions 24,453 26,645 Customer advances 488,649 352,717 Trade payables 843,105 2,882,644 838,259 2,765,504 Total liabilities 8,508,524 6,893,612 Total equity and liabilities 15,033,941 12,595,242 Consolidated Interim Cash Flow Statement ---------------------- --------------------- Three-month period Six-month period ended June 30, ended June 30, ---------------------- --------------------- (all amounts in thousands of U.S. dollars) 2007 2006 2007 2006 ----------- --------- ----------- --------- (Unaudited) (Unaudited) Cash flows from operating activities Income for the period 534,486 495,764 1,043,880 937,454 Adjustments for: Depreciation and amortization 130,284 55,115 230,771 109,790 Income tax accruals less payments (375,170) (173,618) (249,793) (90,160) Equity in earnings of associated companies (29,398) (25,551) (55,305) (47,072) Interest accruals less payments, net (40,564) (6,756) 4,865 (1,464) Income from disposal of investment - - - (6,933) Changes in provisions 3,750 4,800 (3,480) 5,531 Changes in working capital (34,846) (195,284) (125,365) (219,541) Other, including currency translation adjustment 22,560 15,525 53,803 26,472 ----------- --------- ----------- --------- Net cash provided by operating activities 211,102 169,995 899,376 714,077 ----------- --------- ----------- --------- Cash flows from investing activities Capital expenditures (109,237) (99,572) (229,149) (169,101) Acquisitions of subsidiaries and minority interest (1,925,432) (9,301) (1,927,182) (39,110) Other disbursements relating to the acquisition of Hydril (71,580) - (71,580) - Decrease in subsidiaries - - (1,195) - Proceeds from disposal of property, plant and equipment and intangible assets 1,903 1,568 4,596 3,388 Dividends received 11,496 - 11,496 - Changes in restricted bank deposits - (21) - 627 Investments in short terms securities 19,277 1,120 14,193 (176,530) ----------- --------- ----------- --------- Net cash used in investing activities (2,073,573) (106,206) (2,198,821) (380,726) ----------- --------- ----------- --------- Cash flows from financing activities Dividends paid (354,161) (204,233) (354,161) (204,233) Dividends paid to minority interest in subsidiaries (36,563) (8,420) (39,922) (16,001) Proceeds from borrowings 2,159,852 133,478 2,208,026 234,563 Repayments of borrowings (657,814) (115,558) (1,018,713) (270,159) ----------- --------- ----------- --------- Net cash provided by (used in) financing activities 1,111,314 (194,733) 795,230 (255,830) ----------- --------- ----------- --------- (Decrease) Increase in cash and cash equivalents (751,157) (130,944) (504,215) 77,521 Movement in cash and cash equivalents At beginning of the period 1,614,686 887,222 1,365,008 680,591 Effect of exchange rate changes 19,513 (4,019) 22,249 (5,853) (Decrease) Increase in cash and cash equivalents (751,157) (130,944) (504,215) 77,521 At June 30, 883,042 752,259 883,042 752,259 ----------- --------- ----------- --------- At June 30, At June 30, ---------------------- --------------------- Cash and cash equivalents 2007 2006 2007 2006 Cash and bank deposits 891,159 776,146 891,159 776,146 Bank overdrafts (8,096) (22,466) (8,096) (22,466) Restricted bank deposits (21) (1,421) (21) (1,421) 883,042 752,259 883,042 752,259 Non-cash financing activity 2007 2006 2007 2006 Conversion of debt to equity in subsidiaries 35,140 - 35,140 - CONTACT: Tenaris Nigel Worsnop, 1-888-300-5432 www.tenaris.com -----END PRIVACY-ENHANCED MESSAGE-----