Tenaris Announces 2023 Fourth Quarter and Annual Results
Tenaris S.A. announces strong financial results for Q4 2023 and full year 2023, showcasing growth in net sales, operating income, and net income. The company's performance was driven by increased sales volumes, acquisitions, and favorable market conditions. Tenaris plans to propose a dividend and continue its share buyback program in 2024.
Positive
Tenaris reported a 5% sequential increase in net sales for Q4 2023, driven by higher shipments to the Middle East and offshore pipeline projects.
Operating income for Q4 2023 decreased by 6% compared to the previous quarter, mainly due to lower average selling prices in the Americas.
Net income for Q4 2023 saw a significant increase of 110% compared to the same period in 2022, supported by higher results from non-consolidated companies and financial gains.
Free cash flow for Q4 2023 amounted to $669 million after capex payments, with a net cash position of $3.4 billion at the end of the year.
For the full year 2023, Tenaris achieved record levels of net sales, EBITDA, and net income, driven by strong performance in the Americas and the Middle East.
The company plans to propose a dividend of $0.60 per share and continue its share buyback program in 2024, reflecting confidence in future growth prospects.
Negative
Operating income for Q4 2023 decreased by 6%, signaling potential challenges in maintaining margins.
Net sales of tubular products and services declined 8% year on year, indicating pricing pressures in certain regions.
The increase in SG&A expenses may impact overall profitability, despite revenue growth.
The decline in operating margin for tubular products in Q4 2023 raises concerns about cost management.
The financial results reported by Tenaris S.A. for the fourth quarter and full year of 2023 provide a comprehensive view of the company's performance. The increase in net sales by 26% and net income by 55% for the annual results are significant indicators of the company's growth. The expansion of the operating margin from 25.8% to 29.5% suggests enhanced operational efficiency, likely due to a favorable mix of higher prices and volume increases, particularly in the AMEA region and South America.
From a liquidity perspective, the company's record net cash position of $3.4 billion is a strong indicator of financial health. This, coupled with a substantial free cash flow of $3,776 million for the year, reflects a robust capacity for self-financing and potential future investments or shareholder returns. The dividend proposal and the continuation of the share buyback program are likely to be positively received by investors, as these actions typically signal confidence in the company's future prospects and a commitment to returning value to shareholders.
Examining the business environment, Tenaris's performance can be attributed to the stabilization of oil prices and balanced supply and demand dynamics. The long-term outlook for natural gas, especially LNG , is a critical factor supporting drilling activity and thus demand for Tenaris's tubular products. The company's strategic acquisition of Shawcor's pipe coating business is a calculated move to strengthen its service offerings and capitalize on the growing demand for offshore operations and pipeline projects.
The geopolitical and economic volatility in Latin America , however, poses a potential risk to the company's prospects in the region. Despite favorable conditions for drilling activity, such volatility could impact future sales and operations. Investors should monitor regional developments closely, as they could influence Tenaris's performance in this market.
The increase in tubular product sales , particularly in the Asia Pacific, Middle East and Africa regions, aligns with the global energy sector's pivot towards natural gas and LNG. Tenaris's ability to capture market share in these growth areas, reflected in the 98% sales increase in the AMEA region, underscores the company's strategic positioning. The shift in the Americas towards more sustainable price levels post-Covid recovery indicates a normalization of the market, which could lead to more predictable revenue streams for Tenaris.
The company's capital expenditures and acquisitions suggest a focus on expanding capabilities and maintaining technological leadership in pipe manufacturing and coating. This is essential for supporting the anticipated increase in offshore drilling activity. The financial results, therefore, not only reflect past performance but also set the stage for Tenaris's strategic direction in the evolving energy landscape.
02/21/2024 - 04:27 PM
The financial and operational information contained in this press release is based on audited consolidated financial statements presented in U.S. dollars and prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board and adopted by the European Union, or IFRS Accounting Standards. Additionally, this press release includes non-IFRS alternative performance measures i.e., EBITDA, Free Cash Flow, Net cash / debt and Operating working capital days. See exhibit I for more details on these alternative performance measures.
LUXEMBOURG, Feb. 21, 2024 (GLOBE NEWSWIRE) -- Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) (“Tenaris”) today announced its results for the fourth quarter and year ended December 31, 2023 with comparison to its results for the fourth quarter and year ended December 31, 2022.
Summary of 2023 Fourth Quarter Results
4Q 2023 3Q 2023 4Q 2022 Net sales ($ million) 3,415 3,238 5 % 3,620 (6 %) Operating income ($ million) 819 868 (6 %) 1,013 (19 %) Net income ($ million) 1,146 547 110 % 803 43 % Shareholders’ net income ($ million) 1,129 537 110 % 807 40 % Earnings per ADS ($)* 1.92 0.91 110 % 1.37 40 % Earnings per share ($)* 0.96 0.46 110 % 0.68 40 % EBITDA ($ million) 975 1,004 (3 %) 1,269 (23 %) EBITDA margin (% of net sales) 28.6 % 31.0 % 35.1 %
*For the calculation of per share and per ADS data we have used average number of shares outstanding excluding treasury shares.
Our sales in the fourth quarter of 2023 rose 5% sequentially, boosted by a high level of shipments to the Middle East and for offshore pipeline projects, together with the inclusion of our newly acquired Shawcor pipe coating business, which offset the ongoing pricing declines in the Americas. Our EBITDA at $975 million declined mainly due to lower average selling prices in the Americas. Our net income of the quarter, of $1.1 billion was positively affected by: i)$167 million higher result from non-consolidated companies; ii) $26 million higher financial results and iii) net deferred tax gain of $360 million .
Our free cash flow for the quarter amounted to $669 million after capex payments of $167 million . Additionally, during the quarter we paid $161 million (net of cash) for the acquisition of the Shawcor pipe coating business from Mattr. Following dividend payments of $235 million and $214 million spent on share buybacks during the quarter, our net cash position increased to $3.4 billion at December 31, 2023.
Summary of 2023 Annual Results
12M 2023 12M 2022 Increase/(Decrease) Net sales ($ million) 14,869 11,763 26 % Operating income ($ million) 4,316 2,963 46 % Net income ($ million) 3,958 2,549 55 % Shareholders’ net income ($ million) 3,918 2,553 53 % Earnings per ADS ($)* 6.65 4.33 53 % Earnings per share ($)* 3.32 2.16 54 % EBITDA ($ million) 4,865 3,648 33 % EBITDA margin (% of net sales) 32.7 % 31.0 %
*For the calculation of per share and per ADS data we have used average number of shares outstanding excluding treasury shares.
In 2023, our net sales, EBITDA and net income reached record levels. The year was characterized by a first half, in which prices in the Americas reached exceptional levels and we had a high level of pipeline shipments in Argentina, and a second half, in which prices in the Americas started to return to more normal levels while overall sales were supported by good activity and pricing levels in the Middle East and for offshore pipelines.
Operating margins expanded reflecting the higher prices realized on the sales of most of our products, which more than compensated for higher costs of goods sold.
Net income benefited from a net positive deferred tax effect of $194 million as well as positive financial results of $221 million .
Operating cash flow for the year amounted to $4,395 million (including a $182 million reduction in working capital). After capital expenditures of $619 million , business acquisitions of $266 million , dividend payments of $637 million and $214 million spent on share buybacks, our net cash position increased to a record level of $3.4 billion at the end of the year.
Market Background and Outlook
In an environment where oil prices remain relatively stable, oil supply and demand is balanced, and the long term outlook for natural gas, especially LNG, is promising, drilling activity in North America is stabilizing, while continuing to increase in the Middle East and offshore. In this context, and considering our expanded perimeter, with our recent acquisition of the Shawcor pipe coating business, we expect that, in the first half of 2024, our sales will be in line with those of the second half of 2023.
After the exceptional levels they reached in the post-Covid recovery, tubular price levels and margins in the Americas have returned to sustainable levels and should stabilize in the coming months. Prices and margins in the rest of the world should remain at good levels supported by strong demand for offshore operations and pipeline projects.
In Latin America, fundamental conditions remain favorable for the continued expansion of drilling activity and tubular demand, but the high level of political and economic volatility may affect these prospects.
Annual Dividend Proposal; Second Tranche of Share Buyback Program
Upon approval of the Company´s annual accounts in March 2024, the board of directors intends to propose, for approval of the annual general shareholders’ meeting to be held on April 30, 2024, the payment of a dividend per share of $0.60 (in an aggregate amount of approximately $700 million ), which would include the interim dividend per share of $0.20 (approximately $235 million ) paid in November 2023. If the annual dividend is approved by the shareholders, a dividend of $0.40 per share ($0.80 per ADS), or approximately $465 million , will be paid on May 22, 2024, with an ex-dividend date on May 20, 2024 and record date on May 21, 2024.
The second $300 million tranche of the Company’s previously announced $1.2 billion share buyback program is expected to begin on Monday, February 26, 2024.
Analysis of 2023 Fourth Quarter Results
Tubes Sales volume (thousand metric tons) 4Q 2023 3Q 2023 4Q 2022 Seamless 760 744 2 % 809 (6 %) Welded 246 169 45 % 156 58 % Total 1,006 913 10 % 965 4 %
Tubes 4Q 2023 3Q 2023 4Q 2022 (Net sales - $ million) North America 1,501 1,700 (12 %) 2,105 (29 %) South America 590 608 (3 %) 802 (26 %) Europe 302 231 30 % 185 63 % Asia Pacific, Middle East and Africa 805 556 45 % 373 116 % Total net sales ($ million) 3,198 3,095 3 % 3,466 (8 %) Operating income ($ million) 780 841 (7 %) 980 (20 %) Operating margin (% of sales) 24.4 % 27.2 % 28.3 %
Net sales of tubular products and services increased 3% sequentially but declined 8% year on year. Volumes increased 10% sequentially but average selling prices decreased 6% . In North America, sales decreased 12% sequentially reflecting lower prices and a decline in activity in the U.S. onshore market. In South America sales decreased 3% sequentially, mainly due to lower prices of OCTG in Argentina. In Europe sales increased 30% sequentially due to higher sales for offshore line pipe products in Norway. In the Asia Pacific, Middle East and Africa sales increased 45% reflecting higher sales in Saudi Arabia and for offshore line pipe projects in Qatar and sub-Saharan Africa.
Operating income from tubular products and services, amounted to $780 million in the fourth quarter of 2023, compared to $841 million in the previous quarter and $980 million in the fourth quarter of 2022. During the quarter the operating margin decreased following a 6% decrease in average selling prices only partially compensated by a decrease in average tubes cost of 4% .
Others 4Q 2023 3Q 2023 4Q 2022 Net sales ($ million) 217 143 52 % 154 41 % Operating income ($ million) 39 27 45 % 33 19 % Operating margin (% of sales) 18.1 % 19.0 % 21.4 %
Net sales of other products and services increased 52% sequentially and 41% year on year. The sequential increase is mainly explained by the consolidation of sales in December 2023 of the newly acquired coating business which contributed $77 million , largely related to a major project in Altamira, Mexico.
Selling, general and administrative expenses, or SG&A, amounted to $471 million (13.8% of net sales), compared to $433 million (13.4% ) in the previous quarter and $454 million (12.6% ) in the fourth quarter of 2022. The increase in SG&A is mainly related to higher labor costs and the integration of the newly acquired coating business headcount and amortizations.
Other operating result amounted to a $5 million loss in the fourth quarter of 2023, compared with a $36 million gain in the previous quarter and a $12 million loss in the fourth quarter of 2022. The previous quarter gain was mainly related to a non-recurring gain of $32 million corresponding to the transfer of court awards related to the Company’s Venezuelan nationalized assets.
Financial results were a gain of $93 million in the fourth quarter of 2023, compared with a gain of $67 million in the previous quarter and a gain of $36 million in the fourth quarter of 2022. Results of the quarter are mainly derived from net foreign exchange gains of $144 million , mainly related to the positive effect of the devaluation of the Argentine peso over a net short exposure in that currency. This positive FX results were partially offset by $95 million loss from the change in the fair value of U.S. dollar-denominated Argentine bonds when distributed and disposed abroad. Additionally, our net cash position yield a net interest gain of $44 million in the quarter.
Equity in earnings of non-consolidated companies generated a gain of $57 million in the fourth quarter of 2023, compared to a loss of $110 million in the previous quarter and a gain of $13 million in the same period of 2022. The result of the previous quarter included a non-cash loss of $144 million from our investment in Usiminas.
Income tax result amounted to a gain of $177 million in the fourth quarter of 2023, compared to a charge of $278 million in the previous quarter and $258 million in the fourth quarter of 2022. The gain of the quarter is mainly explained by: i) the recognition of a deferred tax asset of $550 million as a result of new business activities to be carried out at subsidiaries with tax loss carry forwards, ii) a $190 million deferred tax liability recognized mainly related to foreign exchange devaluation in Argentina, due to the decline of the fiscal values related to fixed assets and inventory.
Cash Flow and Liquidity of 2023 Fourth Quarter
Net cash provided by operations during the fourth quarter of 2023 was $836 million , compared with $1,297 million in the previous quarter and $524 million in the fourth quarter of 2022. Working capital during the quarter increased by $66 million , mainly due to the increase in trade receivables, however operating working capital days declined to 134 at year end compared to 138 at the end of the previous quarter.
With capital expenditures of $167 million for the fourth quarter of 2023 ($170 million in the previous quarter and $108 million in the fourth quarter of 2022), during the quarter we had a positive free cash flow of $669 million . Additionally, during the quarter we paid $161 million (net of cash) for the acquisition of Mattr’s pipe coating business unit.
Following dividend payments of $235 million and share buybacks of $214 million during the quarter, our positive net cash position increased to $3.4 billion at December 31, 2023.
Analysis of 2023 Annual Results
Net sales ($ million) 12M 2023 12M 2022 Increase/(Decrease) Tubes 14,185 95 % 11,133 95 % 27 % Others 684 5 % 630 5 % 9 % Total 14,869 11,763 26 %
Tubes Sales volume (thousand metric tons) 12M 2023 12M 2022 Increase/(Decrease) Seamless 3,189 3,146 1 % Welded 953 387 146 % Total 4,141 3,533 17 %
Tubes 12M 2023 12M 2022 Increase/(Decrease) (Net sales - $ million) North America 7,572 6,796 11 % South America 3,067 2,213 39 % Europe 1,055 867 22 % Asia Pacific, Middle East and Africa 2,491 1,257 98 % Total net sales ($ million) 14,185 11,133 27 % Operating income ($ million) 4,183 2,867 46 % Operating margin (% of sales) 29.5 % 25.8 %
Net sales of tubular products and services increased 27% to $14,185 million in 2023, compared to $11,133 million in 2022, reflecting a 17% increase in volumes and a 9% increase in average selling prices. Volumes increased mainly in the AMEA region following the increase in activity and in South America mainly due to the delivery of welded line pipe for a gas pipeline in Argentina. Prices were higher in all regions.
Operating results from tubular products and services , amounted to a gain of $4,183 million in 2023, compared to a gain of $2,867 million in 2022 (which was net of a $63 million impairment charge). The improvement in operating results was driven by the recovery in shipment volumes and in prices which help to compensate the increase in costs.
Others 12M 2023 12M 2022 Increase/(Decrease) Net sales ($ million) 684 630 9 % Operating income ($ million) 133 96 39 % Operating margin (% of sales) 19.5 % 15.2 %
Net sales of other products and services increased 9% from $630 million in 2022 to $684 million in 2023, which includes $77 million from the pipe coating business unit acquired from Mattr on November 30, 2023. Additionally, in 2023 we had higher sales from our oilfield services business in Argentina, sucker rods and coiled tubing services, which offset the decline in sales of excess raw materials and energy and pipes for plumbing applications in Italy.
Operating results from other products and services , amounted to a gain of $133 million in 2023, compared to $96 million in 2022. Results were mainly derived from our sucker rods business and our oilfield services business in Argentina.
Selling, general and administrative expenses , or SG&A, amounted to $1,919 million (12.9% of net sales), compared to $1,635 million (13.9% ) in 2022. The 2023 increase in SG&A is mainly due to higher labor costs and logistic costs (freights and taxes), while they decrease as a percentage of sales.
Financial results amounted to a gain of $221 million in 2023, compared to a loss of $6 million in 2022. 2023 results are mainly derived from net foreign exchange gains of $209 million , mainly related to the positive effect of the devaluation of the Argentine peso over a net short exposure in that currency. These positive FX results were partially offset by a $95 million loss from the change in the fair value of U.S. dollar-denominated Argentine bonds when distributed and disposed abroad. Additionally, our net cash position yield a net interest gain of $107 million in the year.
Equity in earnings of non-consolidated companies generated a gain of $95 million in 2023, compared to $209 million in 2022. These results were mainly derived from our equity investment in Ternium (NYSE:TX). The result of 2023 includes a non-cash loss of $144 million from our investment in Usiminas ($26 million from our direct investment in Usiminas and $118 million from our indirect investment in Usiminas through Ternium), related to the fair value measurement of the shares and the result of recycling Ternium´s negative accumulated currency translation reserve to the income statement. In 2022 they included $34 million impairment charges on our participations in the joint venture with Severstal ($15 million ) and in Usiminas ($19 million ).
Income tax charge amounted to $675 million in 2023, compared to $617 million in 2022, reflecting the improvement in results in several subsidiaries and a net positive deferred tax effect of $194 million .
Cash Flow and Liquidity of 2023
Net cash provided by operations in 2023 was $4,395 million (including a $182 million reduction in working capital), compared to $1,167 million (net of $2,131 million used in working capital) in 2022.
With capital expenditures of $619 million , we had a positive free cash flow of $3,776 million in 2023, compared to $789 million in 2022. Additionally, in 2023 we invested $266 million in the acquisition of Mattr’s pipe coating business unit plus other acquisitions.
Following dividend payments of $637 million and share buybacks of $214 million during 2023, our positive net cash position increased to $3.4 billion at December 31, 2023 compared to $921 million at December 31, 2022.
Conference call
Tenaris will hold a conference call to discuss the above reported results, on February 22, 2024, at 09:30 a.m. (Eastern Time). Following a brief summary, the conference call will be opened to questions. To listen to the conference please join through one of the following options: ir.tenaris.com/events-and-presentations or https://edge.media-server.com/mmc/p/384xrvok If you wish to participate in the Q&A session please register at the following link:
https://register.vevent.com/register/BIdf892e810d2749faba59c1f70a41aba7
Please connect 10 minutes before the scheduled start time. A replay of the conference call will also be available on our webpage at :ir.tenaris.com/events-and-presentations
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 Income Statement (all amounts in thousands of U.S. dollars) Three-month period ended December 31, Twelve-month period ended December 31, 2023 2022 2023 2022 Net sales 3,414,930 3,620,210 14,868,860 11,762,526 Cost of sales (2,120,591 ) (2,063,969 ) (8,668,915 ) (7,087,739 ) Gross profit 1,294,339 1,556,241 6,199,945 4,674,787 Selling, general and administrative expenses (470,542 ) (454,478 ) (1,919,307 ) (1,634,575 ) Impairment charge - (76,725 ) - (76,725 ) Other operating income (expense), net (4,834 ) (11,987 ) 35,770 (212 ) Operating income 818,963 1,013,051 4,316,408 2,963,275 Finance income 63,621 37,756 213,474 80,020 Finance cost (19,759 ) (20,237 ) (106,862 ) (45,940 ) Other financial results 49,249 18,127 114,365 (40,120 ) Income before equity in earnings of non-consolidated companies and income tax 912,074 1,048,697 4,537,385 2,957,235 Equity in earnings of non-consolidated companies 56,859 12,701 95,404 208,702 Income before income tax 968,933 1,061,398 4,632,789 3,165,937 Income tax 176,848 (258,226 ) (674,956 ) (617,236 ) Income for the period 1,145,781 803,172 3,957,833 2,548,701 Attributable to: Shareholders' equity 1,129,098 807,318 3,918,065 2,553,280 Non-controlling interests 16,683 (4,146 ) 39,768 (4,579 ) 1,145,781 803,172 3,957,833 2,548,701
Consolidated Statement of Financial Position (all amounts in thousands of U.S. dollars) At December 31, 2023 At December 31, 2022 ASSETS Non-current assets Property, plant and equipment, net 6,078,179 5,556,263 Intangible assets, net 1,377,110 1,332,508 Right-of-use assets, net 132,138 111,741 Investments in non-consolidated companies 1,608,804 1,540,646 Other investments 405,631 119,902 Deferred tax assets 789,615 208,870 Receivables, net 185,959 10,577,436 211,720 9,081,650 Current assets Inventories, net 3,921,097 3,986,929 Receivables and prepayments, net 228,819 183,811 Current tax assets 256,401 243,136 Trade receivables, net 2,480,889 2,493,940 Derivative financial instruments 9,801 30,805 Other investments 1,969,631 438,448 Cash and cash equivalents 1,637,821 10,504,459 1,091,527 8,468,596 Total assets 21,081,895 17,550,246 EQUITY Shareholders' equity 16,842,972 13,905,709 Non-controlling interests 187,465 128,728 Total equity 17,030,437 14,034,437 LIABILITIES Non-current liabilities Borrowings 48,304 46,433 Lease liabilities 96,598 83,616 Derivative financial instruments 255 - Deferred tax liabilities 631,605 269,069 Other liabilities 271,268 230,142 Provisions 101,453 1,149,483 98,126 727,386 Current liabilities Borrowings 535,133 682,329 Lease liabilities 37,835 28,561 Derivative financial instruments 10,895 7,127 Current tax liabilities 488,277 376,240 Other liabilities 422,645 260,614 Provisions 35,959 11,185 Customer advances 263,664 242,910 Trade payables 1,107,567 2,901,975 1,179,457 2,788,423 Total liabilities 4,051,458 3,515,809 Total equity and liabilities 21,081,895 17,550,246
Consolidated Statement of Cash Flows Three-month period ended December 31, Twelve-month period ended December 31, (all amounts in thousands of U.S. dollars) 2023 2022 2023 2022 Cash flows from operating activities Income for the year 1,145,781 803,172 3,957,833 2,548,701 Adjustments for: Depreciation and amortization 156,347 179,135 548,510 607,723 Impairment charge - 76,725 - 76,725 Income tax accruals less payments (277,559 ) 139,061 (143,391 ) 257,651 Equity in earnings of non-consolidated companies (56,859 ) (12,701 ) (95,404 ) (208,702 ) Interest accruals less payments, net (8,554 ) (3,672 ) (53,480 ) 1,480 Changes in provisions (651 ) 7,164 21,284 16,433 Reclassification of currency translation adjustment reserve (878 ) - (878 ) (71,252 ) Changes in working capital (65,697 ) (682,115 ) 182,428 (2,131,245 ) Others, including net exchange differences (56,195 ) 17,173 (21,829 ) 69,703 Net cash provided by operating activities 835,735 523,942 4,395,073 1,167,217 Cash flows from investing activities Capital expenditures (166,820 ) (107,646 ) (619,445 ) (378,446 ) Changes in advance to suppliers of property, plant and equipment 834 (13,108 ) 1,736 (18,901 ) Acquisition of subsidiaries, net of cash acquired (161,238 ) - (265,657 ) (4,082 ) Investment in companies under cost method (1,126 ) - (1,126 ) - Additions to associated companies - - (22,661 ) - Loan to joint-ventures (1,092 ) - (3,754 ) - Proceeds from disposal of property, plant and equipment and intangible assets 3,858 1,690 12,881 48,458 Dividends received from non-consolidated companies 25,268 20,674 68,781 66,162 Changes in investments in securities 740,153 38,079 (1,857,272 ) 123,254 Net cash provided by (used in) investing activities 439,837 (60,311 ) (2,686,517 ) (163,555 ) Cash flows from financing activities Dividends paid (235,128 ) (200,658 ) (636,511 ) (531,242 ) Dividends paid to non-controlling interest in subsidiaries - - (18,967 ) (10,432 ) Changes in non-controlling interests - 2,099 3,772 (1,407 ) Acquisition of treasury shares (213,739 ) - (213,739 ) - Payments of lease liabilities (15,524 ) (13,560 ) (51,492 ) (52,396 ) Proceeds from borrowings 365,455 161,785 1,723,677 1,511,503 Repayments of borrowings (406,774 ) (300,783 ) (1,931,747 ) (1,094,370 ) Net cash used in financing activities (505,711 ) (351,117 ) (1,125,007 ) (178,344 ) Increase in cash and cash equivalents 769,861 112,514 583,549 825,318 Movement in cash and cash equivalents At the beginning of the year 864,012 990,803 1,091,433 318,067 Effect of exchange rate changes (17,276 ) (11,883 ) (58,385 ) (51,952 ) Increase in cash and cash equivalents 769,861 112,514 583,549 825,318 At December 31, 1,616,597 1,091,434 1,616,597 1,091,433
Exhibit I – Alternative performance measures
Alternative performance measures should be considered in addition to, not as substitute for or superior to, other measures of financial performance prepared in accordance with IFRS.
EBITDA, Earnings before interest, tax, depreciation and amortization.
EBITDA provides an analysis of the operating results excluding depreciation and amortization and impairments, as they are recurring non-cash variables which can vary substantially from company to company depending on accounting policies and the accounting value of the assets. EBITDA is an approximation to pre-tax operating cash flow and reflects cash generation before working capital variation. EBITDA is widely used by investors when evaluating businesses (multiples valuation), as well as by rating agencies and creditors to evaluate the level of debt, comparing EBITDA with net debt.
EBITDA is calculated in the following manner:
EBITDA = Net income for the period + Income tax charges +/- Equity in Earnings (losses) of non-consolidated companies +/- Financial results + Depreciation and amortization +/- Impairment charges/(reversals)
EBITDA is a non-IFRS alternative performance measure.
(all amounts in thousands of U.S. dollars) Three-month period ended December 31, Twelve-month period ended December 31, 2023 2022 2023 2022 Income for the period 1,145,781 803,172 3,957,833 2,548,701 Income tax charge / (credit) (176,848 ) 258,226 674,956 617,236 Equity in earnings of non-consolidated companies (56,859 ) (12,701 ) (95,404 ) (208,702 ) Financial results (93,111 ) (35,646 ) (220,977 ) 6,040 Depreciation and amortization 156,347 179,135 548,510 607,723 Impairment charge - 76,725 - 76,725 EBITDA 975,310 1,268,911 4,864,918 3,647,723
Free Cash Flow
Free cash flow is a measure of financial performance, calculated as operating cash flow less capital expenditures. FCF represents the cash that a company is able to generate after spending the money required to maintain or expand its asset base.
Free cash flow is calculated in the following manner:
Free cash flow = Net cash (used in) provided by operating activities - Capital expenditures.
Free cash flow is a non-IFRS alternative performance measure.
(all amounts in thousands of U.S. dollars) Three-month period ended December 31, Twelve-month period ended December 31, 2023 2022 2023 2022 Net cash provided by operating activities 835,735 523,942 4,395,073 1,167,217 Capital expenditures (166,820 ) (107,646 ) (619,445 ) (378,446 ) Free cash flow 668,915 416,296 3,775,628 788,771
Net Cash / (Debt)
This is the net balance of cash and cash equivalents, other current investments and fixed income investments held to maturity less total borrowings. It provides a summary of the financial solvency and liquidity of the company. Net cash / (debt) is widely used by investors and rating agencies and creditors to assess the company’s leverage, financial strength, flexibility and risks.
Net cash/ debt is calculated in the following manner:
Net cash = Cash and cash equivalents + Other investments (Current and Non-Current)+/- Derivatives hedging borrowings and investments - Borrowings (Current and Non-Current).
Net cash/debt is a non-IFRS alternative performance measure.
(all amounts in thousands of U.S. dollars) Year ended December 31, 2023 2022 Cash and cash equivalents 1,637,821 1,091,527 Other current investments 1,969,631 438,448 Non-current investments 398,220 113,574 Derivatives hedging borrowings and investments - 6,480 Current borrowings (535,133 ) (682,329 ) Non-current borrowings (48,304 ) (46,433 ) Net cash / (debt) 3,422,235 921,267
Operating working capital days
Operating working capital is the difference between the main operating components of current assets and current liabilities. Operating working capital is a measure of a company’s operational efficiency, and short-term financial health.
Operating working capital days is calculated in the following manner:
Operating working capital days = [(Inventories + Trade receivables – Trade payables – Customer advances) / Annualized quarterly sales ] x 365
Operating working capital days is a non-IFRS alternative performance measure.
(all amounts in thousands of U.S. dollars) Three-month period ended December 31, 2023 2022 Inventories 3,921,097 3,986,929 Trade receivables 2,480,889 2,493,940 Customer advances (263,664 ) (242,910 ) Trade payables (1,107,567 ) (1,179,457 ) Operating working capital 5,030,755 5,058,502 Annualized quarterly sales 13,659,720 14,480,840 Operating working capital days 134 128
Giovanni Sardagna Tenaris 1-888-300-5432 www.tenaris.com
What were Tenaris' net sales for Q4 2023?
Tenaris reported net sales of $3,415 million for Q4 2023.
How did Tenaris' operating income change in Q4 2023?
Operating income for Q4 2023 decreased by 6% compared to the previous quarter.
What was the net income for Tenaris in Q4 2023?
Tenaris reported a net income of $1.146 billion for Q4 2023.
What is the proposed dividend per share for Tenaris in 2024?
Tenaris plans to propose a dividend of $0.60 per share for 2024.
What was the free cash flow for Tenaris in Q4 2023?
Tenaris had a free cash flow of $669 million for Q4 2023.