Tenaris SA (TS) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

April 28, 2022 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day. Thank you for standing by. Welcome to the Q1 2022 Tenaris S.A. Earnings Conference Call. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Giovanni Sardagna. Please go ahead.

Giovanni Sardagna

Thank you, Gigi, and welcome to Tenaris 2022 first quarter conference call. Before we start, I would like to remind you that we will be discussing forward-looking information in this call and that our actual results may vary from those expressed or implied during this call. With me on the call today are Paolo Rocca, our Chairman and CEO; Alicia Mondolo, our Chief Financial Officer; Guillermo Vogel, Vice Chairman and Member of our Board of Directors; German Cura, Vice Chairman and Member of our Board of Directors; Gabriel Podskubka, President of our Eastern Hemisphere Operations; and Luca Zanotti, President of our U.S. Operations.

Before passing over the call to Paolo for his opening remarks, I would like to briefly comment our quarterly results. Our sales in the first quarter of 2022 reached $2.4 billion, doubling those of the previous year and up 15% sequentially, mainly driven by higher prices in the Americas and higher shipments of line pipe in Europe and South America. Average selling prices in our Tubes operating segment increased 41% compared to the corresponding quarter of 2021 and 12% sequentially.

Our EBITDA for the quarter, which included $12 million of severance charges related to the discontinuation of our industrial equipment business in Brazil and the closure of NKKTubes in Japan was up 30% sequentially to $627 million. Our EBITDA margin reached 26.5% as higher prices more than offset increases in energy and raw material costs.

During the quarter, working capital increased by $609 million, mainly reflecting higher trade receivables following the increase in sales and higher inventories, partially offset by an increase in trade payables. With the negative operating cash flow of $27 million and capital expenditure of $67 million, our free cash flow for the quarter was negative for $94 million, but at the end of the quarter, our net cash position was $562 million.

Now I will ask Paolo to say a few words before we open the call to questions.

Paolo Rocca

Thank you very much, Giovanni. Good morning to all of you. We are pleased to have our team here in Luxembourg for this conference call after more than two years of pandemic-induced travel restriction. We are visiting customer again. And all around Tenaris, our teams are meeting up, while we maintain the benefit of flexible working routine.