Tenaris S.A. (TS) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

November 4, 2022 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day. And thank you for standing by. Welcome to the Q3 2022 Tenaris' Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

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 third 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 third quarter of 2022 reached almost $3 billion, up 70% compared [technical difficulty] those of the previous year, and 6% sequentially, mainly led by further pricing gains which more than offset lower shipments which were affected by lower deliveries to pipeline projects and seasonal factors. Average selling prices in our Tubes operating segment increased 54% compared to the corresponding quarter of 2021, and 12% sequentially. Our EBITDA was up 17% sequentially, to $946 million, while our EBITDA margin was up at around 32% as higher prices more than offset increases in energy and raw material costs.

Our quarterly net income, of $606 million, was slightly down sequentially as it was affected by non-operating items which impacted our results from our equity participation in Ternium and Usiminas, and in our financial expenses. Cash generated by operating activities during the quarter was $242 million. Our free cash flow for the quarter was $113 million after capital expenditure of $129 million, while our net cash position at the end of the quarter increased to $700 million. Our Board of Directors approved the payment of an interim dividend of $0.17 per share or $0.34 per ADR to be paid on November 23. The interim dividend is up 30% compared to the interim dividend we paid last year.