Tenaris S.A.

Earnings Release • Aug 2, 2017

News Details

Corporate | 2 August 2017 22:32

Tenaris Announces 2017 Second Quarter Results

DGAP-News: Tenaris S.A. / Key word(s): Interim Report

02.08.2017 / 22:32

The issuer is solely responsible for the content of this announcement.

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LUXEMBOURG — (Marketwired) — 08/02/17 — Tenaris S.A. (NYSE: TS)

(BAE: TS) (BMV: TS) (MILAN: TEN) (‘Tenaris’) today announced its

results for the quarter ended June 30, 2017 in comparison with its

results for the quarter ended June 30, 2016.

Summary of 2017 Second Quarter Results

(Comparison with first quarter 2017 and second quarter of 2016, with Conduit

operations reclassified as discontinued operations)

2Q 2017 1Q 2017 2Q 2016

——– ————- ————

Net sales ($ million) 1,243 1,154 8% 1,055 18%

Operating income (loss) ($ million) 51 36 43% (62) 184%

Net income (loss) ($ million) 73 206 (64%) (9) 900%

Shareholders’ net income (loss) ($

million) 75 205 (64%) (13) 662%

Earnings (losses) per ADS ($) 0.13 0.35 (64%) (0.02) 662%

Earnings (losses) per share ($) 0.06 0.17 (64%) (0.01) 662%

EBITDA* ($ million) 200 198 1% 101 98%

EBITDA margin (% of net sales) 16.1% 17.2% 9.6%

*EBITDA includes severance charges of $13 million in Q2 2017, $9

million in Q1 2017 and $43 million in Q2 2016. If these charges were

not included EBITDA would have been $213 million (17%) in Q2 2017,

$207 million (18%) in Q1 2017,and $144 million (14%) in Q2 2016.

Our sales rose by 8% in the second quarter, with sequential increases

in North and South America and a further sequential decline in

shipments to the Middle East. In North America, our Rig Direct(TM)

program continues to gain traction and, even with the Canadian

seasonal effect, our sales rose 16% sequentially. Our EBITDA margin

showed a slight sequential decline and included additional costs

associated with the start up of our Bay City mill, the reopening of

our Prudential mill in Calgary and the preparation of our Confab mill

in Brazil for producing line pipe for the Zohr project. For the third

consecutive quarter we had positive operating and net income.

During the quarter, we had a build up of working capital of $260

million and net cash flow used in operations amounted to $33 million.

After capital expenditures of $155 million and the payment of $331

million in dividends, our net cash position (cash, other current

investments and fixed income investments held to maturity less total

borrowings) declined to $1.1 billion at the end of the quarter.

Market Background and Outlook

The recovery in shale drilling in the USA and Canada continued at a

rapid pace in the first half of the year but is now slowing down as

some operators revise their drilling plans for the second half

following a dip in oil prices below $50 per barrel in June. In the

rest of the world, recovery remains more elusive, as oil and gas

companies continue to focus on strengthening cash flow and their

financial position. In Latin America, however, drilling activity in

Argentina is starting to pick up with various operators moving

forward with investments in the Vaca Muerta shale play, and recent

offshore discoveries in Mexico will provide further impetus to the

energy reform program.

In the second half, we expect growth in demand from Rig Direct(TM)

customers in North America, supported by the start up of our Bay City

mill, and in Argentina, while, in the third quarter, we will have

slower sales in the Middle East and Europe. Pricing conditions

continue to improve gradually but the recent rise in raw material

costs will impact our cost of sales, dampening margin improvements.

Our EBITDA should grow, particularly in the fourth quarter, when our

volumes will be enhanced by shipments for East Mediterranean offshore

gas pipelines.

Analysis of 2017 Second Quarter Results

Tubes

The following table indicates, for our Tubes business segment, sales

volumes of seamless and welded pipes for the periods indicated below:

Tubes Sales volume (thousand metric tons) 2Q 2017 1Q 2017 2Q 2016

——- ——– ——–

Seamless 529 509 4% 395 34%

Welded 96 74 29% 80 20%

Total 624 583 7% 475 31%

The following table indicates, for our Tubes business segment, net

sales by geographic region, operating income and operating income as

a percentage of net sales for the periods indicated below:

Tubes 2Q 2017 1Q 2017* 2Q 2016

——- ———– ————-

(Net sales – $ million)

North America 548 472 16% 266 105%

South America 227 203 12% 245 (7%)

Europe 132 115 15% 162 (28%)

Middle East & Africa 212 249 (15%) 276 (16%)

Asia Pacific 55 46 21% 36 55%

Total net sales ($ million) 1,175 1,085 8% 985 19%

Operating income (loss) ($ million) 46 31 48% (65) (171%)

Operating margin (% of sales) 3.9% 2.8% (6.6%)

*Includes inter-regional reclassifications

Net sales of tubular products and services increased 8% sequentially

and 19% year on year. The sequential increase reflects a volume

increase of 7% and an average price increase of 1%. In North America

we had higher sales in the United States onshore market, reflecting

an increase in drilling activity, and in Mexico to private operators

participating in the energy reform, partially offset by lower sales

in Canada due to the spring break-up season. In South America we had

higher sales in Argentina (Vaca Muerta) and in the Andean region,

partially offset by lower sales of connectors in Brazil following

shipment advancements in the previous quarter. In Europe we had

higher sales to the European industrial sector. In the Middle East

and Africa sales were down 15% sequentially reflecting further

declines in shipments to Middle East and North African customers. In

Asia Pacific, sales increased due to higher offshore line pipe sales.

Operating results from tubular products and services increased 48%

sequentially, from a gain of $31 million in the previous quarter to a

gain of $46 million in the second quarter of 2017. In addition to the

effect of higher sales, the increase in shipments improved the

utilization of production capacity and therefore the absorption of

fixed costs, positively impacting costs and margins and offsetting

the increase in the cost of steel scrap and other steelmaking raw

materials.

Others

The following table indicates, for our Others business segment, net

sales, operating income and operating income as a percentage of net

sales for the periods indicated below:

Others 2Q 2017 1Q 2017 2Q 2016

——- ——– ———

Net sales ($ million) 68 68 0% 70 (3%)

Operating income ($ million) 6 5 5% 4 60%

Operating income (% of sales) 8.3% 7.9% 5.0%

Net sales of other products and services remained flat sequentially

and declined 3% year on year. Operating income increased sequentially

mainly due to improved results at our coiled tubing business.

Selling, general and administrative expenses, or SG&A, amounted to

$327 million, or 26.3% of net sales, in the second quarter of 2017,

compared to $294 million, 25.5% in the previous quarter and $333

million, 31.6% in the second quarter of 2016. SG&A during the quarter

increased due to higher logistic costs and a lower recovery of

doubtful accounts, partially offset by lower amortization of

intangibles following the full amortization of Hydril intangibles

acquired ten years ago.

Financial results amounted to a loss of $16 million in the second

quarter of 2017, compared to a loss of $4 million in the previous

quarter and a gain of $10 million in the second quarter of 2016. The

reason for the loss in the second quarter of 2017 is an FX loss of

$23 million, the great majority corresponding to the Euro

appreciation on Euro denominated intercompany liabilities, fully

offset in the currency translation reserve in equity.

Equity in earnings of non-consolidated companies amounted to $30

million in the second quarter of 2017, compared to $35 million in the

previous quarter and $19 million in the second quarter of last year.

These results are mainly derived from our equity investment in

Ternium (NYSE: TX).

Income tax amounted to a gain of $7 million in the second quarter of

2017, primarily reflecting the effect of the Mexican peso revaluation

on the tax base used to calculate deferred taxes at our Mexican

subsidiaries which have the U.S. dollar as their functional currency.

Cash Flow and Liquidity of 2017 Second Quarter

Net cash used by operating activities during the second quarter of

2017 was $33 million, compared to cash provided by operations of $26

million in the first quarter of 2017 and $380 million in the second

quarter of last year. During the second quarter of 2017 we used $260

million for the increase in working capital related to the increase

in shipments and production.

Capital expenditures amounted to $155 million for the second quarter

of 2017, compared to $139 million in the previous quarter and $211

million in the second quarter of 2016. Capital expenditures mainly

relates to the progress in the construction of the greenfield

seamless facility in Bay City, Texas.

Following a dividend payment of $331 million in May 2017, we

maintained a net cash position (i.e., cash, other current investments

and fixed income investments held to maturity less total borrowings)

of $1.1 billion at the end of the quarter.

Analysis of 2017 First Half Results

Increase/

H1 2017 H1 2016 (Decrease)

——- ——- ———-

Net sales ($ million) 2,397 2,261 6%

Operating income (loss) ($ million) 88 (32) 372%

Net income ($ million) 279 19 1,386%

Shareholders’ net income ($ million) 280 5 5,613%

Earnings per ADS ($) 0.47 0.01 5,613%

Earnings per share ($) 0.24 0.00 5,613%

EBITDA* ($ million) 399 292 36%

EBITDA margin (% of net sales) 16.6% 12.9%

*EBITDA includes severance charges of $22 million in H1 2017 and $56

million in H1 2016. If these charges were not included EBITDA would

have been $420 million (18%) in H1 2017 and $348 million (15%) in H1

Our sales in the first half of 2017 increased 6% compared to the

first half of 2016, mainly due to strong increase in demand in the

USA and Canada, partially offset by lower sales in South America and

in the Middle East and Africa. EBITDA increased 36% to $399 million

in the first half of 2017 compared to $292 million in the first half

of the previous year, following an increase in sales and an

improvement in the EBITDA margin, from 12.9% to 16.6%. EBITDA

includes severance charges, due to the adjustment of the workforce,

which amounted to $22 million in the first half of 2017 and $56

million in the first half of 2016. Net income attributable to owners

of the parent during the first half of 2017 was $280 million or $0.47

per ADS, which compares with $5 million or $0.01 per ADS in the first

half of 2016. The improvement in net income mainly reflects a better

operating environment, where a 22% increase in shipments improved the

utilization of production capacity and therefore the absorption of

fixed costs, a reduction in severance costs, a positive income tax of

$55 million reflecting primarily the effect of the Mexican peso

revaluation on the tax base used to calculate deferred taxes at our

Mexican subsidiaries which have the U.S. dollar as their functional

currency, and a gain of $90 million from the sale of Republic

Conduit.

Cash flow used in operating activities amounted to $7 million during

the first half of 2017 (including an increase in working capital of

$365 million). Following a dividend payment of $331 million in May

2017, and capital expenditures of $294 million during the first half

of 2017, we maintained a positive net cash position (i.e., cash,

other current investments and fixed income investments held to

maturity less total borrowings) of $1.1 billion at the end of June

2017, including the $328 million we collected from the sale of

Republic Conduit.

The following table shows our net sales by business segment for the

periods indicated below:

Increase/

Net sales ($ million) H1 2017 H1 2016 (Decrease)

———- ———- ———-

Tubes 2,260 94% 2,115 94% 7%

Others 137 6% 146 6% (6%)

Total 2,397 100% 2,261 100% 6%

Tubes

The following table indicates, for our Tubes business segment, sales

volumes of seamless and welded pipes for the periods indicated below:

Increase/

Tubes Sales volume (thousand metric tons) H1 2017 H1 2016 (Decrease)

——- ——- ———-

Seamless 1,037 761 36%

Welded 170 226 (25%)

Total 1,207 987 22%

The following table indicates, for our Tubes business segment, net

sales by geographic region, operating income and operating income as

a percentage of net sales for the periods indicated below:

Increase/

Tubes H1 2017 H1 2016 (Decrease)

——- ——- ———-

(Net sales – $ million)

North America 1,021 646 58%

South America 430 595 (28%)

Europe 247 295 (16%)

Middle East & Africa 461 515 (10%)

Asia Pacific 101 64 58%

Total net sales ($ million) 2,260 2,115 7%

Operating income (loss) ($ million)* 76 (44) 274%

Operating income (% of sales) 3.4% (2.1%) 257%

*Tubes operating income includes severance charges of $20 million in

the first half of 2017 and $51 million in the first half of 2016. If

these charges were not included Tubes operating income would have

been $96 million in the first half of 2017 and $8 million in the

first half of 2016.

Net sales of tubular products and services increased 7% to $2,260

million in the first half of 2017, compared to $2,115 million in the

first half of 2016, as a result of a 22% increase in shipment volumes

partially offset by a 13% decline in average selling prices. Sales

grew due to strong increase in demand in the USA and Canada,

partially offset by lower sales in South America and in the Middle

East and Africa. In the first half of 2017, the average number of

active drilling rigs, or rig count, in the United States and Canada

averaged 1,022, a 72% increase when compared to the 594 average in

the first half of 2016. In the rest of the world the rig count

declined 3% year on year, from 979 in the first half of 2016 to 948

in the first half of 2017.

Operating results from tubular products and services increased from a

loss of $44 million in the first half of 2016, to a gain of $76

million in the first half of 2017. Results improved following a 22%

increase in shipment volumes, increasing sales and the utilization of

production capacity and therefore the absorption of fixed costs.

Additionally, severance charges were lower as market conditions

improved.

Others

The following table indicates, for our Others business segment, net

sales, operating income and operating income as a percentage of net

sales for the periods indicated below:

Increase/

Others H1 2017 H1 2016 (Decrease)

——- ——- ———-

Net sales ($ million) 137 146 (6%)

Operating income ($ million) 11 12 (6%)

Operating margin (% of sales) 8.1% 8.0%

Net sales of other products and services decreased 6% to $137 million

in the first half of 2017, compared to $146 million in the first half

of 2016, mainly due to lower sales of industrial equipment in Brazil.

Operating income from other products and services decreased 6%, in

line with the decline in sales as margins remained flat.

Selling, general and administrative expenses, or SG&A, amounted to

$622 million in the first half of 2017 and $612 million in the first

half of 2016, representing 26% of sales in 2017 and 27% in 2016.

Direct selling expenses, like freights, increased due to higher

shipment volumes but were partially offset by lower labor costs

(lower severance costs). Amortization of intangibles also declined

following the full amortization of Hydril intangibles acquired ten

years ago.

Financial results amounted to a loss of $20 million in the first half

of 2017, compared to a loss of $5 million in the first half of 2016.

The main reason for the loss in the first half of 2017 is an FX loss

of $33 million, mainly due to the Euro appreciation on Euro

denominated intercompany liabilities, fully offset in the currency

translation reserve in equity.

Equity in earnings of non-consolidated companies generated a gain of

$65 million in the first half of 2017, compared to a gain of $30

million in the first half of 2016. These results are mainly derived

from our equity investment in Ternium (NYSE: TX).

Income tax amounted to a gain of $55 million in the first half of

2017, compared to a gain of $4 million in the first half of 2016. In

the first half of 2017 this result reflects primarily the effect of

the Mexican peso revaluation on the tax base used to calculate

deferred taxes at our Mexican subsidiaries which have the U.S. dollar

as their functional currency.

Results attributable to non-controlling interests amounted to a loss

of $1 million in the first half of 2017, compared to a gain of $14

million in the first half of 2016. Results during the first half of

2016 were mainly attributable to our pipe coating subsidiary in

Nigeria.

Cash Flow and Liquidity of 2017 First Half

Net cash used in operating activities during the first half of 2017

amounted to $7 million (net of an increase in working capital of $365

million, related to the increase in shipments and production),

compared to cash provided by operations of $689 million in the first

half of 2016 (including working capital reductions of $410 million).

Capital expenditures amounted to $294 million in the first half of

2017, compared to $441 million in the first half of 2016, as we

continue progressing in the construction of the greenfield seamless

facility in Bay City, Texas.

Following a dividend payment of $331 million in May 2017, our

financial position at June 30, 2017, amounted to a net cash position

(i.e., cash, other current investments and fixed income investments

held to maturity less total borrowings) of $1.1 billion, including

the $328 million we collected from the sale of Republic Conduit.

Tenaris Files Half-Year Report

Tenaris S.A. announces that it has filed its half-year report for the

six-month period ended June 30, 2017 with the Luxembourg Stock

Exchange. The half-year report can be downloaded from the Luxembourg

Stock Exchange’s website at www.bourse.lu and from Tenaris’s website

at www.tenaris.com/investors.

Holders of Tenaris’s shares and ADSs, and any other interested

parties, may request a hard copy of the half-year report, free of

charge, at 1-888-300-5432 (toll free from the United States) or

52-229-989-1159 (from outside the United States).

Conference call

Tenaris will hold a conference call to discuss the above reported

results, on August 3, 2017, at 8:00 a.m. (Eastern Time). Following a

brief summary, the conference call will be opened to questions. To

access the conference call dial in +1 877 730 0732 within North

America or +1 530 379 4676 Internationally. The access number is

‘59393286’. Please dial in 10 minutes before the scheduled start

time. The conference call will be also available by webcast at

www.tenaris.com/investors

A replay of the conference call will be available on our webpage

http://ir.tenaris.com/ or by phone from 11:00 am ET on Aug 3, through

11:59 pm on Aug 11, 2017. To access the replay by phone, please dial

+1 855 859 2056 or +1 404 537 3406 and enter passcode ‘59393286’ when

prompted.

Some of the statements contained in this press release are

‘forward-looking statements’. Forward-looking statements are based on

management’s current views and assumptions and involve known and

unknown risks that could cause actual results, performance or events

to differ materially from those expressed or implied by those

statements. These risks include but are not limited to risks arising

from uncertainties as to future oil and gas prices and their impact

on investment programs by oil and gas companies.

Consolidated Condensed Interim Income Statement

(all amounts in thousands of Three-month period Six-month period ended

U.S. dollars) ended June 30, June 30,

2017 2016 2017 2016

———————————————-

Continuing operations Unaudited Unaudited

Net sales 1,242,804 1,054,917 2,396,664 2,261,267

Cost of sales (865,729) (779,623) (1,689,585) (1,676,685)

———————————————-

Gross profit 377,075 275,294 707,079 584,582

Selling, general and

administrative expenses (327,132) (333,160) (621,563) (612,008)

Other operating income

(expense), net 1,547 (3,644) 1,988 (4,774)

———————————————-

Operating income (loss) 51,490 (61,510) 87,504 (32,200)

Finance Income 11,059 24,212 23,986 44,107

Finance Cost (6,020) (4,814) (11,958) (9,118)

Other financial results (20,667) (9,830) (32,082) (39,928)

———————————————-

Income (loss) before equity

in earnings of non-

consolidated companies and

income tax 35,862 (51,942) 67,450 (37,139)

Equity in earnings of non-

consolidated companies 30,201 18,612 65,401 30,339

———————————————-

Income (loss) before income

tax 66,063 (33,330) 132,851 (6,800)

Income tax 7,357 10,416 54,602 3,975

———————————————-

Income (loss) for continuing

operations 73,420 (22,914) 187,453 (2,825)

———————————————-

Discontinued operations

Result for discontinued

operations – 13,737 91,542 21,598

———————————————-

Income (loss) for the period 73,420 (9,177) 278,995 18,773

———————————————-

Attributable to:

Owners of the parent 74,524 (13,266) 279,651 4,895

Non-controlling interests (1,104) 4,089 (656) 13,878

———————————————-

73,420 (9,177) 278,995 18,773

———————————————-

Consolidated Condensed Interim Statement of Financial Position

(all amounts in thousands of

U.S. dollars) At June 30, 2017 At December 31, 2016

Unaudited

ASSETS

Non-current assets

Property, plant and equipment,

net 6,124,342 6,001,939

Intangible assets, net 1,761,686 1,862,827

Investments in non-

consolidated companies 601,712 557,031

Available for sale assets 21,572 21,572

Other investments 284,738 249,719

Deferred tax assets 149,849 144,613

Receivables, net 198,233 9,142,132 197,003 9,034,704

———– ———–

Current assets

Inventories, net 1,988,820 1,563,889

Receivables and prepayments,

net 186,950 124,715

Current tax assets 180,624 140,986

Trade receivables, net 1,024,453 954,685

Other investments 1,431,881 1,633,142

Cash and cash equivalents 271,224 5,083,952 399,737 4,817,154

———– ———–

Assets of disposal group

classified as held for sale – 151,417

———– ———-

Total assets 14,226,084 14,003,275

———– ———-

EQUITY

Capital and reserves

attributable to owners of the

parent 11,341,154 11,287,417

Non-controlling interests 106,155 125,655

———– ———-

Total equity 11,447,309 11,413,072

———– ———-

LIABILITIES

Non-current liabilities

Borrowings 32,015 31,542

Deferred tax liabilities 536,157 550,657

Other liabilities 220,176 213,617

Provisions 42,914 831,262 63,257 859,073

———– ———–

Current liabilities

Borrowings 820,850 808,694

Current tax liabilities 97,818 101,197

Other liabilities 215,587 183,887

Provisions 23,179 22,756

Customer advances 80,334 39,668

Trade payables 709,745 1,947,513 556,834 1,713,036

———– ———–

Liabilities of disposal group

classified as held for sale – 18,094

———– ———-

Total liabilities 2,778,775 2,590,203

———– ———-

Total equity and liabilities 14,226,084 14,003,275

———– ———-

Consolidated Condensed Interim Statement of Cash Flows

Three-month period Six-month period ended

ended June 30, June 30,

(all amounts in thousands of

U.S. dollars) 2017 2016 2017 2016

———————————————-

Cash flows from operating

activities Unaudited Unaudited

Income for the period 73,420 (9,177) 278,995 18,773

Adjustments for:

Depreciation and

amortization 148,848 163,963 311,066 327,118

Income tax accruals less

payments (36,888) (52,560) (129,818) (68,731)

Equity in earnings of non-

consolidated companies (30,201) (18,612) (65,401) (30,339)

Interest accruals less

payments, net 7,349 (227) 4,889 (12,906)

Changes in provisions (2,082) 1,373 (19,920) 8,171

Income from the sale of

Conduit business – – (89,694) –

Changes in working capital (260,284) 307,317 (365,222) 410,232

Other, including currency

translation adjustment 67,008 (12,349) 68,409 36,557

———————————————-

Net cash (used in)

providedby operating

activities (32,830) 379,728 (6,696) 688,875

———————————————-

Cash flows from investing

activities

Capital expenditures (155,191) (211,174) (293,806) (441,423)

Changes in advance to

suppliers of property,

plant and equipment 826 20,094 4,329 34,352

Proceeds from disposal of

Conduit business – – 327,631 –

Investment in non-

consolidated companies – (17,108) – (17,108)

Loan to non-consolidated

companies – (13,464) (9,006) (23,848)

Investment in companies

under cost method (3,681) – (3,681) –

Proceeds from disposal of

property, plant and

equipment and intangible

assets 916 2,256 2,878 3,979

Dividends received from non-

consolidated companies 22,971 20,674 22,971 20,674

Changes in investments in

securities 218,540 195,754 170,071 325,682

———————————————-

Net cash provided by (used

in) investing activities 84,381 (2,968) 221,387 (97,692)

———————————————-

Cash flows from financing

activities

Dividends paid (330,550) (354,161) (330,550) (354,161)

Dividends paid to non-

controlling interest in

subsidiaries (19,200) – (19,200) (4,311)

Acquisitions of non-

controlling interests (13) (111) (31) (477)

Proceeds from borrowings (*) 438,188 242,471 1,062,371 495,942

Repayments of borrowings (*) (297,816) (407,071) (1,060,486) (627,904)

———————————————-

Net cash (used in) financing

activities (209,391) (518,872) (347,896) (490,911)

———————————————-

———————————————-

(Decrease) increase in cash

and cash equivalents (157,840) (142,112) (133,205) 100,272

———————————————-

Movement in cash and cash

equivalents

At the beginning of the

period 426,741 530,743 398,580 286,198

Effect of exchange rate

changes 1,936 4,012 5,462 6,173

———————————————-

(Decrease) increase in cash

and cash equivalents (157,840) (142,112) (133,205) 100,272

———————————————-

At June 30, 270,837 392,643 270,837 392,643

———————————————-

Exhibit I – Alternative performance measures

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 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= Operating results + Depreciation and amortization +

Impairment charges/(reversals).

(all amounts in thousands of Three-month period Six-month period

U.S. dollars) ended June 30, ended June 30,

——————— ———————

2017 2016 2017 2016

Operating income 51,490 (61,510) 87,504 (32,200)

Depreciation and amortization 148,848 163,963 311,066 327,118

Depreciation and amortization

from discontinued operations – (1,366) – (2,728)

———- ———- ———- ———-

EBITDA 200,338 101,087 398,570 292,190

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)+

Fixed income investments held to maturity – Borrowings (Current and

Non-current).

(all amounts in thousands of U.S. dollars) At June 30,

——————–

2017 2016

——— ———

Cash and cash equivalents 271,224 394,351

Other current investments 1,431,881 1,879,082

Fixed income investments held to maturity 279,232 329,182

Borrowings – current and non-current (852,865) (820,046)

——— ———

Net cash / (debt) 1,129,472 1,782,569

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02.08.2017 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.

The issuer is solely responsible for the content of this announcement.

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Language:	English
Company:	Tenaris S.A.
	Luxemburg
ISIN:	LU0156801721

End of News	DGAP News Service