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 March 2, 2006
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
2005 Fourth Quarter and Annual Results.
Tenaris Announces 2005 Fourth Quarter and Annual Results
LUXEMBOURG--(BUSINESS WIRE)--March 1, 2006--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. (NYSE:TS) (BCBA:TS) (BMV:TS) (BI:TEN) ("Tenaris")
today announced its results for the fourth quarter and year ended
December 31, 2005 with comparison to its results for the fourth
quarter and year ended December 31, 2004.
Summary of 2005 Annual Results
FY 2005 FY 2004 Increase/(Decrease)
Net sales (US$ million) 6,736.2 4,136.1 63%
Operating income (US$
million) 1,948.4 813.5 140%
Net income (US$ million)(1) 1,387.3 805.0 72%
Shareholders' net income
(US$ million) 1,277.5 784.7 63%
Earnings per ADS (US$) 10.82 6.65 63%
Earnings per share (US$) 1.08 0.66 63%
Av. number of shares
(million) 1,180.5 1,180.5
EBITDA(2) (US$ million) 2,162.7 898.6 141%
EBITDA margin (% of net
sales) 32% 22%
(1) As required by IAS 1 (revised) as from January 1, 2005 the income
for the period disclosed in the income statement does not show
minority interest. Earnings per share continue to be calculated on
the net income attributable solely to the equity holders of
Tenaris.
(2) EBITDA equals operating income plus depreciation and amortization
charges but excluding a non-recurring operating income gain of
US$123.0 million recorded in the fourth quarter of 2004 resulting
from an arbitration award.
Our 2005 full year results reflect the strong performance of our
seamless pipe business, where we are the leading supplier of seamless
pipe products to the global oil and gas industry. With the increase in
oil and gas drilling activity, particularly in complex operating
environments, we have been increasing our sales of high-end products,
such as premium connections, sour service and high collapse grades
used in deeper and more corrosive environments and special deepwater
line pipe for risers and flowlines. Net sales of our seamless pipes,
which accounted for 76% of total net sales, rose 57% with particularly
strong growth recorded in the Middle East and Africa region. Our
welded pipe business also enjoyed a good year with strong demand for
welded pipes for gas pipeline projects in its regional markets of
Brazil and Argentina.
Summary of 2005 Fourth Quarter Results
(Comparison with third quarter of 2005 and fourth quarter of 2004)
Q4 2005 Q3 2005 Q4 2004
Net sales (US$ million) 1,898.6 1,640.4 16% 1,272.7 49%
Operating income (US$ million) 576.9 475.2 21% 355.4 62%
Net income (US$ million)(3) 414.8 350.9 18% 479.5 (13%)
Shareholders' net income (US$
million) 381.0 318.9 19% 467.4 (18%)
Earnings per ADS (US$) 3.23 2.70 19% 3.96 (18%)
Earnings per share (US$) 0.323 0.27 19% 0.396 (18%)
EBITDA(4) (US$ million) 634.5 528.1 20% 287.8 120%
EBITDA margin (% of net sales) 33% 32% 23%
(3) As required by IAS 1 (revised) as from January 1, 2005 the income
for the period disclosed in the income statement does not show
minority interest. Earnings per share continue to be calculated on
the net income attributable solely to the equity holders of
Tenaris.
(4) EBITDA equals operating income plus depreciation and amortization
charges but excluding a non-recurring operating income gain of
US$123.0 million recorded in the fourth quarter of 2004 resulting
from an arbitration award.
New quarterly highs were set during the fourth quarter of 2005 for
net sales, operating income and EBITDA. Net sales of our seamless pipe
products rose 16% compared to the third quarter of 2005 and were up
45% compared to the fourth quarter of 2004 and the gross margin
continued to improve. Compared to the third quarter, seamless pipe
sales volumes remained strong in the Middle East & Africa and
increased in the Far East & Oceania as well as in Europe reflecting
our strong global positioning. Free cash flow (net cash provided by
operations less capital expenditures) was US$273.3 million and net
debt (borrowings less cash and cash equivalents and other current
investments) decreased to US$183.0 million.
Annual Dividend Proposal
The board of directors proposes, for the approval of the annual
general shareholders' meeting to be held on June 7, 2006, the payment
of an annual dividend of US$0.30 per share (US$3.00 per ADS), or
approximately US$354 million. If the annual dividend is approved by
the shareholders, a dividend of US$0.173 per share (US$1.73 per ADS),
or approximately US$204 million, representing the balance of the
annual dividend, will be paid on June 16, 2006 with an ex-dividend
date of June 13, 2006.
Market Background and Outlook
In 2005, further increases in exploration and production spending
by oil and gas companies and increased drilling activity, reflecting
high oil and gas prices and continuing increases in global demand for
oil and gas, led the increase in demand for seamless pipe products.
The international count of active drilling rigs, as published by Baker
Hughes, averaged 929 during the fourth quarter of 2005, an increase of
8% compared to the same quarter of the previous year and an increase
of 9% for the year overall compared to 2004. The corresponding
percentage annual rig count increases in the Canadian and U.S.
markets, which are more sensitive to natural gas prices, were 24% and
16% respectively.
We estimate that global apparent consumption of seamless OCTG (oil
country tubular goods) in 2005 grew approximately 17% compared to
2004, and will grow further in 2006. Demand for other seamless
products also increased contributing to an overall estimated increase
in apparent consumption of seamless pipe products worldwide of some 9%
in 2005 over 2004. Demand from the energy sector for high-end seamless
pipe products, including premium connections, used in complex drilling
and other high-performance applications grew strongly in 2005 and
should grow further in 2006.
Favorable market conditions and increased demand for high-end
seamless pipe products helped us to record strong sales growth and a
higher gross margin for our seamless pipe products as higher average
selling prices were more than sufficient to offset the impact of
higher raw material, energy and labor costs. We expect that the
continuation of favorable market conditions and increased demand for
our high-end seamless pipe products will result in further sales
growth and that we will be able to maintain our operating margins at
the higher levels shown 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. In
2005, demand for our welded pipe products benefited from gas and
mineral slurry pipeline projects in Brazil and from gas pipeline
expansion projects in Argentina. We expect demand for our welded pipe
products in 2006 to be affected by delays to the implementation of
projects in Brazil and Argentina which will result in reduced sales
and margins on welded pipes for the year.
Ternium IPO
On January 31, 2006, Ternium announced that it had placed
248,447,200 newly issued shares (equivalent to 24,844,720 ADSs) in an
initial public offering at US$2.00 per share (US$20 per ADS) and that
its ADSs would trade on the New York Stock Exchange with the TX
ticker. Tenaris received an additional 20,252,338 shares in Ternium
upon the conversion of its US$40.4 million loan to Ternium. Following
the issuance of further shares by Ternium upon the exercise of an
over-allotment option by the Ternium IPO underwriters, Tenaris now
holds an 11.5% equity shareholding in Ternium. As of December 31,
2005, Tenaris recorded the value of its equity investment in Ternium
at US$253.8 million.
Analysis of 2005 Fourth Quarter Results
(metric tons)
Sales volume Q4 2005 Q4 2004 Increase/(Decrease)
North America 192,000 226,000 (15%)
Europe 182,000 185,000 (2%)
Middle East & Africa 147,000 101,000 46%
Far East & Oceania 112,000 98,000 14%
South America 105,000 96,000 9%
Total seamless pipes 738,000 707,000 4%
Welded pipes 110,000 50,000 120%
Total steel pipes 848,000 756,000 12%
Sales volume of seamless pipes increased by 4% to 738,000 tons in
the fourth quarter of 2005 from 707,000 tons in the same period of
2004. Sales volume increased significantly in the Middle East and
Africa region reflecting a general increase in oil and gas drilling
activity in the region led by exploration and production investments
to increase petroleum production capacity in Saudi Arabia and gas
production for LNG processing in Qatar. Sales volume also increased in
the Far East and Oceania, reflecting higher sales of OCTG products in
China, and in South America, reflecting higher sales of OCTG products
in Venezuela and Ecuador. Sales in North America declined reflecting
lower drilling activity in Mexico and lower sales of line pipe
products in the USA.
Sales volumes of welded pipes increased by 120% to 110,000 tons in
the fourth quarter of 2005 from 50,000 tons in the same period of
2004. The increase in sales was due to higher demand for welded pipes
for gas pipeline projects in Brazil. Deliveries were made during the
quarter to the Cabiunas-Vitoria, Catu-Carmopolis and Coari-Manaus
projects.
(US$ million)
Net sales Q4 2005 Q4 2004 Increase/(Decrease)
Seamless pipes 1,456.9 1006.2 45%
Welded pipes 208.2 77.7 168%
Energy 163.8 140.6 17%
Others 69.6 48.2 44%
Total 1,898.6 1,272.7 49%
Net sales in the quarter ended December 31, 2005 increased 49% to
US$1,898.6 million, compared to US$1,272.7 million in the
corresponding quarter of 2004. Net sales of seamless pipes rose by
45%, due to higher sales of high-end products and higher selling
prices for all our products. Net sales of welded pipes, which included
US$13 million in sales of metal structures made by our Brazilian
welded pipe subsidiary in the fourth quarter of 2005 and US$17 million
of such sales in the fourth quarter of 2004, rose by 168% due to
higher sales volume and selling prices. Net sales of energy rose by
17% due to higher selling prices for gas and electric energy and
higher sales of natural gas. Net sales of other goods and services
increased 44% due to higher sales of pre-reduced hot briquetted iron
from our plant in Venezuela, which we acquired in July 2004 and which
commenced operations during the fourth quarter of 2004.
(percentage of net sales)
Cost of sales Q4 2005 Q4 2004
Seamless pipes 50% 62%
Welded pipes 63% 72%
Energy 97% 92%
Others 70% 52%
Total 56% 66%
Cost of sales, expressed as a percentage of net sales, decreased
to 56% in the fourth quarter of 2005, compared to 66% in the same
period of 2004 reflecting higher gross margins on our sales of
seamless and welded pipe products. Cost of sales for seamless pipe
products, expressed as a percentage of net sales, decreased to 50% in
the fourth quarter of 2005 compared to 62% in the same period of 2004
as higher average selling prices offset increased raw material, energy
and labor costs and we sold higher volumes of higher margin, high-end
products.
Selling, general and administrative expenses, or SG&A, declined as
a percentage of net sales to 12.6% in the quarter ended December 31,
2005 compared to 15.4% in the corresponding quarter of 2004 but rose
in absolute terms to US$239.0 million compared to US$196.2 million.
Other operating income and expenses. A loss of US$11.7 million was
recorded in the fourth quarter of 2005 compared to a gain of US$116.4
million in the corresponding quarter of 2004. The result recorded in
the fourth quarter of 2004 included a gain of US$123.0 million
deriving from an arbitration settlement.
Net financial expenses rose to US$20.1 million in the fourth
quarter of 2005, compared to a net financial income of US$28.3 million
in the same period of 2004. Net interest expenses decreased to US$4.6
million compared to US$10.6 million, reflecting a lower net debt
position. A loss of US$16.5 million on net foreign exchange
transactions and the fair value of derivative instruments was recorded
in the fourth quarter of 2005, compared to a gain of US$39.6 million
during the fourth quarter of 2004. These gains and losses on net
foreign exchange transactions and the fair value of derivative
instruments are to a large extent offset by changes to our net equity
position and 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$22.4 million in the fourth quarter of 2005, compared to a gain of
US$149.1 million in the fourth quarter of 2004. The gain in the fourth
quarter of 2005 was derived mainly from the 15% equity shareholding in
Ternium we held during the quarter. The gain of US$149.1 million
recorded in the fourth quarter of 2004 was derived mainly from our
previous investment in Sidor (which was exchanged into our investment
in Ternium during September 2005) and included non-recurring gains of
US$117.7 million in respect of the conversion of a subordinated loan
into equity and the reversal of an impairment provision.
Income tax charges totalled US$164.4 million in the fourth quarter
of 2005, equivalent to 30% of income before equity in earnings of
associated companies and income tax.
Income attributable to minority interest rose to US$33.9 million
in the fourth quarter of 2005, compared to US$12.1 million in the
corresponding quarter of 2004 reflecting an improvement in operating
and financial results at our Confab and NKKTubes subsidiaries.
Cash Flow and Liquidity
Net cash provided by operations during the fourth quarter of 2005
was US$363.4 million (US$1,295.3 million during the year). Working
capital increased by US$132.6 million during the fourth quarter due to
an increase in trade receivables associated with higher sales and a
reduction in customer advances on sales of welded pipe products
partially offset by a reduction in inventories. The increase in
working capital for the year was US$433.9 million.
Capital expenditures increased to US$90.0 million for the fourth
quarter compared to US$60.8 million in the fourth quarter of 2004 as
we began to implement a two-year investment program to increase
capacity for high-end products. Capital expenditure for the full year
increased to US$284.5 million compared to US$183.3 million in 2004.
During 2005, total financial debt decreased by US$249.0 million to
US$1,010.3 million at December 31, 2005 from US$1,259.3 million at
December 31, 2004. Net financial debt during 2005 decreased by
US$645.1 million to US$183.0 million at December 31, 2005.
Analysis of 2005 Results
Results for the fiscal year ended December 31, 2005 with
comparison to the results for the corresponding period of 2004.
(metric tons)
Sales volume FY 2005 FY 2004 Increase/(Decrease)
North America 843,000 757,000 11%
Europe 666,000 679,000 (2%)
Middle East & Africa 524,000 421,000 24%
Far East & Oceania 404,000 412,000 (2%)
South America 433,000 377,000 15%
Total seamless pipes 2,870,000 2,646,000 8%
Welded pipes 501,000 316,000 59%
Total steel pipes 3,371,000 2,963,000 14%
Sales volume of seamless pipes increased by 8% to 2,870,000 tons
in 2005 from 2,646,000 tons in 2004. Demand for our seamless pipe
products from oil and gas customers was particularly strong reflecting
increased investment in oil and gas exploration and production
activity whereas demand from industrial and automotive customers was
more constrained.
-- North America. In North America, demand for our seamless pipe
products increased due to higher exploration and production
activity in Canada, including SAGD projects, and increased
sales of OCTG products in the USA.
-- Europe. In Europe, the decrease in sales was primarily due to
lower sales to industrial customers reflecting a reduction in
mill capacity allocation to lower margin industrial products
in response to increased demand from the energy sector. Sales
of OCTG and line pipe products to oil and gas customers and
for process and power plant construction increased.
-- Middle East & Africa. In the Middle East and Africa, demand
increased due to higher oil and gas exploration and production
activity in the Middle East, particularly in Saudi Arabia, and
higher sales of flowlines and risers for West African
deepwater projects.
-- Far East & Oceania. In the Far East and Oceania, the decrease
in sales was primarily due to lower sales of line pipe for
process and power plant construction as well as to lower sales
to industrial customers in Japan. Sales of OCTG products
increased particularly in Indonesia and China.
-- South America. In South America, demand increased reflecting
higher levels of drilling activity in the region, particularly
in Venezuela and Ecuador.
Sales volume of welded pipe products increased 59% to 501,000 tons
in 2005 from 316,000 tons in 2004. This increase reflects
substantially higher sales for gas pipeline projects in the Brazilian
and Argentine markets.
Sales of electric energy in Italy decreased 3% to 2.9 TWh in 2005
from 3.0 TWh in 2004 and sales of natural gas increased by 44% to 941
million scm in 2005 from 652 million scm in 2004.
Net sales in 2005 increased 63% compared to 2004, which primarily
reflects strong sales growth in our seamless pipes business and a good
year for our welded pipes business, but sales of energy and other
products also increased.
(US$ million)
Net sales FY 2005 FY 2004 Increase/(Decrease)
Seamless pipes 5,124.0 3,273.3 57%
Welded pipes 845.1 348.1 143%
Energy 526.4 417.9 26%
Others 240.7 96.8 149%
Total 6,736.2 4,136.1 63%
Seamless Pipes. Net sales of seamless pipes rose by 57%,
reflecting strong market demand for our products, particularly for
high-end products used in demanding applications. Average selling
prices for seamless pipes increased by 44% to US$1,785 per ton in 2005
from US$1,237 per ton in 2004.
Welded Pipes. Net sales of welded pipes, which included US$60
million in sales of metal structures made by our Brazilian welded pipe
subsidiary in 2005 and US$68 million of such sales in 2004, increased
143% reflecting increased demand from gas pipeline projects in Brazil
and Argentina and higher average selling prices.
Net sales of electricity and natural gas by Dalmine Energie
increased by 26% reflecting higher prices for electricity and natural
gas and higher sales of natural gas. Net sales of other goods and
services increased 149% due to sales of pre-reduced hot briquetted
iron from the plant in Venezuela that we acquired in July 2004 and
higher sales of sucker rods used in oil extraction.
(percentage of net sales)
Cost of sales FY 2005 FY 2004
Seamless pipes 53% 63%
Welded pipes 66% 72%
Energy 98% 95%
Others 63% 56%
Total 59% 67%
Cost of sales, expressed as a percentage of net sales, decreased
to 59% in 2005, compared to 67% in 2004 due primarily to higher gross
margins on our sale of seamless pipe products. Cost of sales for
seamless pipe products, expressed as a percentage of net sales,
decreased to 53% in 2005 compared to 63% in 2004 as higher average
selling prices offset increased raw material, energy and labor costs
and we sold higher volumes of higher margin, high-end products. Cost
of sales for welded pipe products, expressed as a percentage of net
sales, decreased to 66% in 2005, compared to 72% in 2004, as higher
average selling prices and volume-related efficiencies offset
increased raw material prices.
Selling, general and administrative expenses, or SG&A, declined as
a percentage of net sales to 12.5% in 2005 compared to 16.3% in 2004
but rose in absolute terms to US$842.6 million compared to US$672.4
million. SG&A rose in absolute terms due to higher labor costs and
taxes included in SG&A and higher commission, freight and other
selling expenses.
Net financial expenses totalled US$109.7 million in 2005, compared
to net financial income of US$5.8 million in 2004. Net interest
expenses decreased to US$29.2 million compared to US$32.7 million, as
the decrease in the net debt position offset the impact of increases
in interest rates. Tenaris recorded a loss of US$86.6 million on net
foreign exchange transactions and the fair value of derivative
instruments in 2005, compared to a gain of US$33.1 million in 2004.
These gains and losses on net foreign exchange transactions and the
fair value of derivative instruments are to a large extent offset by
changes to our net equity position and 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$117.4 million in 2005, compared to a gain of US$206.0 million in
2004. These gains were derived mainly from our equity investment in
Sidor which was exchanged for an investment in Ternium in September
2005. The gain of US$206.0 million recorded in 2004 included
non-recurring gains of US$135.0 million in respect of the conversion
of a subordinated loan into equity and the reversal of an impairment
provision.
Income tax charges of US$568.8 million were recorded during 2005,
equivalent to 31% of income before equity in earnings of associated
companies and income tax, compared to income tax charges of US$220.4
million, equivalent to 27% of income before equity in earnings of
associated companies and income tax, during 2004.
Income attributable to minority interest rose to US$109.8 million
in 2005, compared to US$20.3 million 2004 reflecting an improvement in
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 prices and their impact on
investment programs by oil companies.
Consolidated Income Statement
(all amounts in Three-month period Fiscal year ended
thousands of U.S. ended December 31, December 31,
dollars, unless
otherwise stated) 2005 2004 2005 2004
----------- ---------- ----------- -----------
Net sales 1,898,574 1,272,711 6,736,197 4,136,063
Cost of sales (1,070,927) (837,531) (3,942,758) (2,776,936)
----------- ---------- ----------- -----------
Gross profit 827,647 435,180 2,793,439 1,359,127
Selling, general and
administrative
expenses (239,044) (196,162) (842,574) (672,449)
Other operating income
& expenses (11,684) 116,358 (2,419) 126,840
----------- ---------- ----------- -----------
Operating income 576,919 355,376 1,948,446 813,518
Financial income
(expenses), net (20,147) 28,257 (109,738) 5,802
----------- ---------- ----------- -----------
Income before equity
in earnings of
associated companies
and income tax 556,772 383,633 1,838,708 819,320
Equity in earnings of
associated companies 22,433 149,068 117,377 206,037
----------- ---------- ----------- -----------
Income before income
tax 579,205 532,701 1,956,085 1,025,357
Income tax (164,361) (53,192) (568,753) (220,376)
----------- ---------- ----------- -----------
Net Income (1) 414,844 479,509 1,387,332 804,981
----------- ---------- ----------- -----------
Net Income
Attributable to (1):
Equity holders of the
Company 380,960 467,422 1,277,547 784,703
Minority interest 33,884 12,087 109,785 20,278
----------- ---------- ----------- -----------
414,844 479,509 1,387,332 804,981
----------- ---------- ----------- -----------
(1) Prior to December 31, 2004 minority interest was shown in the
income statement before net income, as required by International
Financial Reporting Standards in effect. For periods beginning on
or after January 1, 2005, IAS 1 (revised) requires that income for
the period as shown on the income statement not exclude minority
interest. Earnings per share, however, continue to be calculated
on the basis of net income attributable solely to the equity
holders of the Company.
Consolidated Balance Sheet
(all amounts in
thousands of
US,dollars) At December 31, 2005 At December 31, 2004
ASSETS
Non-current assets
Property, plant and
equipment, net 2,230,038 2,164,601
Intangible assets, net 159,099 49,211
Investments in
associated companies 257,234 99,451
Other investments 25,647 24,395
Deferred tax assets 194,874 161,173
Receivables 65,852 2,932,744 151,365 2,650,196
---------- ----------
Current assets
Inventories 1,376,113 1,269,470
Receivables and
prepayments 143,282 279,450
Current tax assets 102,455 94,996
Trade receivables 1,324,171 936,931
Other investments 119,907 119,666
Cash and cash
equivalents 707,356 3,773,284 311,579 3,012,092
---------- ---------- ---------- ----------
Total assets 6,706,028 5,662,288
EQUITY AND LIABILITIES
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
Other distributable
reserve - 82
Currency translation
adjustments (59,743) (30,020)
Other reserves 2,718 -
---------- ----------
Retained earnings 1,656,503 3,507,802 617,538 2,495,924
---------- ----------
Minority interest 268,071 165,271
---------- ----------
Total equity 3,775,873 2,661,195
---------- ----------
LIABILITIES
Non-current liabilities
Borrowings 678,112 420,751
Deferred tax
liabilities 353,395 371,975
Other liabilities 154,378 172,442
Provisions 43,964 31,776
Trade payables 1,205 1,231,054 4,303 1,001,247
---------- ----------
Current liabilities
Borrowings 332,180 838,591
Current tax
liabilities 452,534 222,735
Other liabilities 138,875 194,945
Provisions 36,945 42,636
Customer advances 113,243 108,847
Trade payables 625,324 1,699,101 592,092 1,999,846
---------- ---------- ---------- ----------
Total liabilities 2,930,155 3,001,093
Total equity and
liabilities 6,706,028 5,662,288
Consolidated Cash Flow Statement
Three-month period Fiscal year ended
ended December 31, December 31,
------------------- ---------------------
(all amounts in thousands
of U.S. dollars) 2005 2004 2005 2004
--------- --------- ----------- ---------
Cash flows from operating
activities
Income for the period 414,844 479,509 1,387,332 804,981
Adjustments for:
Depreciation and
amortization 57,573 57,750 214,227 208,119
Income tax accruals less
payments 45,062 8,723 149,487 44,659
Equity in earnings of
associated companies (22,433) (149,068) (117,377) (206,037)
Interest accruals less
payments, net (1,087) 9,843 1,919 16,973
Power plant impairment - 11,705 - 11,705
Changes in provisions 6,920 4,445 6,497 11,455
Proceeds from Fintecna
arbitration award net of
BHP settlement - (126,126) 66,594 (126,126)
Changes in working capital (132,563) (209,259) (433,939) (621,187)
Other, including currency
translation adjustment (4,966) (35,518) 20,583 (46,254)
--------- --------- ----------- ---------
Net cash provided by
operating activities 363,350 52,004 1,295,323 98,288
--------- --------- ----------- ---------
Cash flows from investing
activities
Capital expenditures (90,046) (60,834) (284,474) (183,312)
Acquisitions of
subsidiaries (290) (40) (48,292) (97,595)
Convertible loan to
associated companies (414) - (40,358) -
Proceeds from disposal of
property, plant and
equipment and intangible
assets 4,582 1,762 9,995 12,054
Dividends and distributions
received from associated
companies - 8,003 59,127 48,598
Changes in restricted bank
deposits 1,392 (13,500) 11,452 (13,500)
Investments in short term
securities 24,752 - (119,907) -
Reimbursement from trust
funds - 20,359 119,666 20,359
--------- --------- ----------- ---------
Net cash used in investing
activities (60,024) (44,250) (292,791) (213,396)
--------- --------- ----------- ---------
Cash flows from financing
activities
Dividends paid (149,928) - (349,439) (135,053)
Dividends paid to minority
interest in subsidiaries (6,394) (8) (14,318) (31)
Proceeds from borrowings 446,931 175,903 1,222,861 632,095
Repayments of borrowings (444,227) (163,390) (1,463,233) (326,453)
--------- --------- ----------- ---------
Net cash (used in)
provided by financing
activities (153,618) 12,505 (604,129) 170,558
--------- --------- ----------- ---------
Increase in cash and cash
equivalents 149,708 20,259 398,403 55,450
Movement in cash and cash
equivalents
At beginning of the period 531,462 276,205 293,824 238,030
Effect of exchange rate
changes (579) (2,640) (11,636) 344
Increase in cash and cash
equivalents 149,708 20,259 398,403 55,450
At December 31, 680,591 293,824 680,591 293,824
Cash and cash equivalents At December, 31 At December, 31
--------------------------------- ----------------- -----------------
2005 2004 2005 2004
--------------------------------- -------- -------- -------- --------
Cash and bank deposits 707,356 311,579 707,356 311,579
--------------------------------- -------- -------- -------- --------
Bank overdrafts (24,717) (4,255) (24,717) (4,255)
--------------------------------- -------- -------- -------- --------
Restricted bank deposits (2,048) (13,500) (2,048) (13,500)
--------------------------------- -------- -------- -------- --------
680,591 293,824 680,591 293,824
--------------------------------- -------- -------- -------- --------
CONTACT: Tenaris
Nigel Worsnop, 1-888-300-5432
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.
Date: March 2, 2006
Tenaris, S.A.
By: /s/ Cecilia Bilesio
-----------------------
Cecilia Bilesio
Corporate Secretary