Summary of 2007 Fourth Quarter Results
(Comparison with third quarter of 2007 and fourth quarter of 2006)
Q4 2007 Q3 2007 Q4 2006
------- ------- -------
Net sales (US$ million) 2,628.0 2,433.8 8% 2,460.9 7%
Operating income (US$ million) 756.7 671.7 13% 812.6 (7%)
Net income (US$ million) 595.8 436.4 37% 612.0 (3%)
Shareholders’ net income (US$
million) 546.5 401.0 36% 574.8 (5%)
Earnings per ADS (US$) 0.93 0.68 36% 0.97 (5%)
Earnings per share (US$) 0.46 0.34 36% 0.49 (5%)
EBITDA (US$ million) 890.9 804.5 11% 901.6 (1%)
EBITDA margin (% of net sales) 34% 33% 37%
Following the agreement to sell the Hydril pressure control business to GE,
the pressure control segment was reclassified in our financial statements
as a discontinued operation.
Our fourth quarter results show a partial recovery at the operating level
compared to the third quarter, with operating income returning to the
levels recorded in the first two quarters of the year but remaining below
the strong level recorded in the fourth quarter of 2006. Our net income for
the quarter further benefitted from a reduced income tax charge and a gain
recorded on the sale of our remaining 25% interest in Dalmine Energie. Free
cash flow (net cash provided by operations less capital expenditures)
totaled US$118.1 million, and net debt at December 31, 2007 was US$2,970.2
million following the payment of an interim dividend.
Summary of 2007 Annual Results
Increase/
FY 2007 FY 2006 (Decrease)
Net sales (US$ million) 10,042.0 7,727.7 30%
Operating income (US$ million) 2,957.2 2,792.5 6%
Net income (US$ million) 2,076.1 2,059.4 1%
Shareholders’ net income (US$ million) 1,923.7 1,945.3 (1%)
Earnings per ADS (US$) 3.26 3.30 (1%)
Earnings per share (US$) 1.63 1.65 (1%)
EBITDA (US$ million) 3,449.3 3,045.6 13%
EBITDA margin (% of net sales) 34% 39%
Following several years of strong growth, earnings per share declined
marginally in 2007 compared to 2006. Net sales, EBITDA and operating
income, on the other hand continued to grow, up 30%, 13% and 6%
respectively. These stable results reflect steady overall demand for our
products and services from the global oil and gas industry. They were
achieved in a context of rising costs and a severe decline in Canadian gas
drilling activity.
We expect our sales to increase in 2008, led by higher sales of
specialized, high-end OCTG products, and that the increase in sales should
result in higher operating and net income. However, increased volatility in
economic conditions and raw material and commodity prices could affect
market conditions for our products and services and, consequently, our
results for the second half of the year.
Annual Dividend Proposal
The board of directors proposes, for the approval of the annual general
shareholders' meeting to be held on June 4, 2008, the payment of an annual
dividend of US$0.38 per share (US$0.76 per ADS), or approximately US$450
million, which includes the interim dividend of US$0.13 per share (US$0.26
per ADS) paid on November 22, 2007. This would represent an increase of 27%
over the annual dividend paid for the 2006 fiscal year. If the annual
dividend is approved by the shareholders, a dividend of US$0.25 per share
(US$0.50 per ADS), or approximately US$295 million will be paid on June 26,
2008 with a record date of June 25, 2008 and an ex-dividend date of June
23, 2008.
Market Background and Outlook
In 2007, global demand for oil and gas continued to rise reflecting
economic growth and the importance of oil and gas in the energy matrix.
Encouraged by continuing high levels of oil prices, oil and gas companies
in most regions of the world continued to increase their level of spending
and drilling activity to offset declining rates of production from mature
fields and to explore and develop new reserves. In Canada, however, subdued
North American gas prices affected gas drilling activity.
The international count of active drilling rigs, as published by Baker
Hughes, after rising steadily in the first three quarters of the year
dipped marginally in the fourth quarter to average 1017, an increase of 7%
compared to the same quarter of the previous year. The average increase for
the full year, compared to 2006, was 9%.
The corresponding rig count in the USA, which is more sensitive to North
American gas prices, also showed a positive, though decelerating, trend
during the year. It showed an average annual increase of 7% in 2007
compared to 2006 and in the fourth quarter of 2007 was up 4% compared to
the fourth quarter of 2006. The corresponding rig count in Canada, however,
which began to decline in the second half of 2006, showed an average annual
decline of 27% compared to 2006 and a decline of 19% in the fourth quarter
compared to the same period of 2006.
We estimate that global apparent demand for OCTG in 2007 remained similar
to that in 2006, following strong growth in the previous three years, as an
increase in operative consumption was offset by inventory adjustments. We
expect growth in apparent demand to resume in 2008 based on continued
growth in oil and gas drilling activity outside North America and the
maintenance of current levels of drilling activity in North America.
However, the annual growth rate is expected to be lower than in the period
2004-2006 and may be affected by market volatility and inventory
adjustments in some markets.
Demand for our large diameter pipes for pipeline projects in South America
was strong in 2007 as major gas pipeline infrastructure projects in Brazil
and Argentina, which had previously been delayed, went forward. Orders for
new projects in Brazil and Colombia have been received and we expect to
maintain a strong level of sales in this segment in 2008.
Steelmaking raw material costs rose in 2007 and are expected to rise more
steeply in 2008. Energy and labor costs also rose during 2007, and may rise
further in 2008, with labor costs being affected primarily by
currency-related factors. Steel costs for our welded pipe products also
rose and are expected to increase further in 2008.
Analysis of 2007 Fourth Quarter Results
Increase/
Sales volume (metric tons) Q4 2007 Q4 2006 (Decrease)
Tubes - Seamless 714,000 730,000 (2%)
Tubes - Welded 259,000 264,000 (2%)
Tubes - Total 973,000 994,000 (2%)
Projects - Welded 157,000 98,000 60%
Total 1,130,000 1,092,000 3%
Increase/
Tubes Q4 2007 Q4 2006 (Decrease)
(Net sales - $ million)
- North America 756.0 770.8 (2%)
- South America 324.0 244.9 32%
- Europe 460.8 363.8 27%
- Middle East & Africa 458.7 613.4 (25%)
- Far East & Oceania 153.5 139.5 10%
Total net sales ($ million) 2,153.0 2,132.5 1%
Cost of sales (% of sales) 53% 49%
Operating income ($ million) 656.9 760.9 (14%)
Operating income (% of sales) 31% 36%
Net sales of tubular products and services rose 1% to US$2,153.0 million in the fourth quarter of 2007, compared to US$2,132.5 million in the fourth quarter of 2006, as an increase in our average selling price for tubular products and services offset a 2% decline in sales volume. Sales rose strongly in South America, led by increased sales of OCTG products in Venezuela, and in Europe, where average selling prices increased due to a stronger product mix and the appreciation of the euro against the U.S. dollar. Sales declined in Middle East and Africa compared to the strong level of sales recorded in the fourth quarter of 2006 due primarily to lower sales in Saudi Arabia. In North America, an increase in sales in USA was offset by a decline in sales in Canada, where gas drilling activity continues to decline year on year, and in Mexico, where weather conditions affected drilling activity.
Increase/
Projects Q4 2007 Q4 2006 (Decrease)
Net sales ($ million) 315.4 172.4 83%
Cost of sales (% of sales) 71% 72%
Operating income ($ million) 78.1 27.3 186%
Operating income (% of sales) 25% 16%
Net sales of pipes for pipeline projects rose 83% to US$315.4 million in
the fourth quarter of 2007, compared to US$172.4 million in the fourth
quarter of 2006, reflecting a high level of deliveries to gas pipeline
projects in Brazil and the partial resumption of deliveries to the loops
expansion project in Argentina. Operating income in this segment in the
fourth quarter of 2007 included other operating income of US$16.4 million
in respect of the sale of surplus office space.
Increase/
Others Q4 2007 Q4 2006 (Decrease)
Net sales ($ million) 159.6 156.3 2%
Cost of sales (% of sales) 71% 77%
Operating income ($ million) 21.7 24.3 (11%)
Operating income (% of sales) 14% 16%
Net sales of other products and services rose 2% to US$159.6 million in the
fourth quarter of 2007, compared to US$156.3 million in the fourth quarter
of 2006, as higher sales of metallic equipment offset lower sales of hot
briquetted iron from our plant in Venezuela.
Selling, general and administrative expenses, or SG&A, increased as a
percentage of net sales to 15.7% in the quarter ended December 31, 2007
compared to 14.1% in the corresponding quarter of 2006 due primarily to an
increase in amortization expenses following the incorporation of Hydril.
Amortization of customer relationships and other intangibles acquired with
Hydril amounted to US$19.8 million in the quarter, or 0.8% of net sales.
Other operating income included a gain of US$16.4 million in relation to
the sale of surplus office space in Brazil (as mentioned above).
Net interest expense rose to US$41.8 million in the fourth quarter of 2007
compared to a net interest expense of US$33.5 million in the same period of
2006 reflecting an increased net debt position following the Hydril
acquisition.
Other financial results contributed a loss of US$12.0 million during the
fourth quarter of 2007, compared to a gain of US$18.2 million during the
fourth quarter of 2006.
Equity in earnings of associated companies generated a gain of US$39.7
million in the fourth quarter of 2007, compared to a gain of US$17.9
million in the fourth quarter of 2006. The result in the fourth quarter of
2007 included a gain of US$18.4 million recorded on the sale of our
remaining 25% participation in Dalmine Energie and the balance was derived
mainly from our equity investment in Ternium.
Income tax charges totalled US$159.2 million in the fourth quarter of 2007.
This result included reductions in deferred tax liabilities due to tax rate
changes in Canada, Italy and Colombia and net non-recurring tax losses of
US$47.3 million.
Income from discontinued operations amounted to US$12.4 million in the
fourth quarter of 2007. This income corresponds to the Hydril pressure
control business, which was classified as a discontinued operation
following the conclusion of an agreement to sell this business on January
28, 2008.
Income attributable to minority interest rose to US$49.3 million in the
fourth quarter of 2007, compared to US$37.2 million in the corresponding
quarter of 2006 reflecting higher operating and financial results at our
Confab subsidiary.
Cash Flow and Liquidity
Net cash provided by operations during the fourth quarter of 2007 was
US$231.5 million (US$2,020.6 million for the year), compared to US$499.0
million in the fourth quarter of 2006 (US$1,810.9 million during the year).
Working capital increased by US$205.1 million during the fourth quarter
with the value of inventories rising by US$114.8 million and advance
payables, mainly associated with our Project segment, declining by US$36.5
million.
Capital expenditures amounted to US$113.3 million for the fourth quarter of
2007 and US$447.9 million for the year, compared to US$139.4 million in the
fourth quarter of 2006 and US$441.5 million for the year. During 2007 we
completed a two-year investment program to increase capacity for
specialized products and commissioned, among other facilities, new heat
treatment facilities in Mexico and Argentina, a new premium threading
facility in China, a new power generation plant in Italy and a new
components center in Romania.
During 2007, total financial debt increased by US$369.0 million to
US$4,020.2 million at December 31, 2007 from US$3,651.2 million at December
31, 2006, as additional debt was used to finance the acquisition of Hydril
and liquidity (cash and cash equivalents and other current investments) was
reduced. Net financial debt during 2007 increased by US$874.9 million to
US$2,970.2 million at December 31, 2007.
Analysis of 2007 Annual Results
Increase/
Sales volume (metric tons) FY 2007 FY 2006 (Decrease)
Tubes - Seamless 2,870,000 2,919,000 (2%)
Tubes - Welded 965,000 297,000 225%
Tubes - Total 3,835,000 3,216,000 19%
Projects - Welded 474,000 281,000 69%
Total - Tubes + Projects 4,309,000 3,497,000 23%
Increase/
Tubes FY 2007 FY 2006 (Decrease)
Net sales ($ million)
- North America 2,921.7 1,993.0 47%
- South America 1,221.7 960.3 27%
- Europe 1,661.4 1,315.1 26%
- Middle East & Africa 2,057.6 1,895.7 9%
- Far East & Oceania 690.2 662.8 4%
Total net sales 8,552.6 6,826.9 25%
Cost of sales (% of sales) 52% 47%
Operating income ($ million) 2,713.9 2,670.5 2%
Operating income (% of sales) 32% 39%
Net sales of tubular products and services rose 25% to US$8,552.6 million
in 2007, compared to US$6,826.9 million in 2006, due to a higher volume of
welded pipe sales, resulting from the incorporation of the former Maverick
operations acquired in October 2006, and a higher average selling price for
our seamless pipes reflecting an enhanced product mix and increased demand
for our specialized, high-end seamless pipe products used in the world's
more complex drilling operations and other demanding applications. In North
America, sales increased principally due to the incorporation of sales from
the former Maverick and Hydril premium connection operations but, excluding
such effects, there was a substantial decline in sales in Canada reflecting
the decline in drilling activity and consequent inventory adjustments. In
South America, sales increased due primarily to higher sales of OCTG
products in Venezuela as PDVSA began to replenish inventories and increased
sales in Colombia. In Europe, sales increased, with higher average selling
prices and volumes, reflecting higher sales to European-based process and
power plant contractors, a more specialized mix of products sold to
industrial and automotive customers, increased sales of OCTG products in
continental Europe and the appreciation of the Euro with respect to the
U.S. dollar. In the Middle East and Africa, higher average selling prices
more than offset lower volumes which were affected by lower sales of API
OCTG products and inventory adjustments. In the Far East and Oceania, sales
remained stable with higher sales in South-East Asia and South Korea
offsetting lower sales in China.
Operating income from tubular products and services rose 2% to US$2,713.9
million in 2007, from US$2,670.5 million in 2006, as the increase in sales
was substantially offset by a reduction in the gross margin and higher
expenses for the amortization of intangible assets.
Increase/
Projects FY 2007 FY 2006 (Decrease)
Net sales ($ million) 876.3 453.5 93%
Cost of sales (% of sales) 71% 72%
Operating income ($ million) 184.8 56.3 228%
Operating income (% of sales) 21% 12%
Net sales of pipes for pipeline projects rose 93% to US$876.3 million in
2007, compared to US$453.5 million in 2006, due to higher shipments and
average selling prices. Regional demand for pipes for pipeline projects in
South America improved substantially in 2007 as large gas pipeline projects
in Brazil and Argentina that had been delayed in 2006 went ahead and orders
were received for mineral slurry and additional gas pipeline projects in
Brazil.
Operating income from pipes for pipeline projects rose 228% to US$184.8
million in 2007, from US$56.3 million in 2006, due to the increase in net
sales and an increase in the operating margin reflecting a higher
proportion of sales in Brazil where sales from our Brazilian mill have low
logistics costs. Operating income in this segment in 2007 included other
operating income of US$16.4 million in respect of the sale of surplus
office space.
Increase/
Others FY 2007 FY 2006 (Decrease)
Net sales ($ million) 613.1 447.3 37%
Cost of sales (% of net sales) 76% 72%
Operating income ($ million) 58.5 65.6 (11%)
Operating income (% of sales) 10% 15%
Net sales of other products and services rose 37% to US$613.1 million in
2007, compared to US$447.3 million in 2006, as sales from electric conduit
pipe operations acquired in October 2006 were included for a full year.
Sales of metallic structures also increased but sales of excess raw
materials and sucker rods declined.
Selling, general and administrative expenses, or SG&A, increased as a
percentage of net sales to 15.7% in 2007 compared to 13.6% in 2006 due
mainly to increased charges for amortization of intangible assets relating
principally to assets acquired in the Maverick and Hydril acquisitions.
These amortization charges amounted to US$236.0 million in 2007, or 2.4% of
net sales, compared to US$54.8 million, or 0.7% of net sales, in 2006.
Other operating income and expenses resulted in net income of US$4.9
million in 2007, compared to net income of US$3.8 million in 2006. The 2007
result included income of US$16.4 million in relation to the sale of
surplus office space in Brazil and an expense of US$10.3 million relating
to the settlement of redemptions on Maverick's 2005 Notes.
Net interest expenses totalled US$182.3 million in 2007, compared to net
interest expenses of US$31.8 million in 2006. The increase in net interest
expenses reflects the increase in the average net debt position during 2007
compared to 2006, relating to debt contracted for the Maverick and Hydril
acquisitions.
Other financial results contributed a loss of US$22.8 million in 2007,
compared to a gain of US$26.8 million during 2006. These results largely
reflect gains and losses on net foreign exchange transactions and the fair
value of derivative instruments and are to a large extent offset by changes
to our net equity position. They 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$113.3
million in 2007, compared to a gain of US$94.7 million in 2006. These gains
were derived mainly from our equity investment in Ternium but, in 2007,
also included a gain of US$18.4 million recorded on the sale of our
remaining 25% participation in Dalmine Energie.
Income tax charges of US$823.9 million were recorded during 2007,
equivalent to 30% of income before equity in earnings of associated
companies and income tax, compared to income tax charges of US$870.0
million, equivalent to 31% of income before equity in earnings of
associated companies and income tax, during 2006. The result in 2007
included net non-recurring tax losses of US$47.3 million.
Income from discontinued operations amounted to US$34.5 million, compared
to US$47.2 million in 2006. The 2007 income corresponds to the Hydril
pressure control business, which was classified as a discontinued operation
following the conclusion of an agreement to sell this business on January
28, 2008. The 2006 income corresponds to our former Dalmine Energie energy
supply subsidiary, in which we sold a majority participation in December
2006.
Net income rose marginally to US$2,076.1 million in 2007, compared to
US$2,059.4 million in 2006, as an increase in operating income was largely
offset by an increase in net interest expenses.
Income attributable to equity holders was US$1,923.7 million, or US$1.63
per share (US$3.26 per ADS), in 2007, compared to US$1,945.3 million, or
US$1.65 per share (US$3.30 per ADS) in 2006.
Income attributable to minority interest was US$152.3 million in 2007,
compared to US$114.1 million in 2006. The increase was due primarily to
higher income attributable to minority interest at our Confab subsidiary.
Registered Major Holders
Pursuant to recent Luxembourg legislation implementing the EU Transparency
Directive, San Faustín N.V. has notified the Company that it owns
713,605,187 shares in the Company (representing 60.4% of the Company's
capital and voting rights). San Faustín N.V. owns all of its shares in the
Company through its wholly-owned subsidiary I.I.I. Industrial Investments
Inc. Rocca & Partners S.A. controls a significant portion of the voting
power of San Faustín N.V. and has the ability to influence matters
affecting, or submitted to a vote of the shareholders of, San Faustín N.V.,
such as the election of directors, the approval of certain corporate
transactions and other matters concerning the company's policies. There are
no controlling shareholders for Rocca & Partners.
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 Three-month period
of U.S. dollars) ended December 31, Year ended December 31,
====================== ======================
2007 2006 2007 2006
========== ========== ========== ==========
Continuing operations
Net sales 2,627,968 2,460,910 10,042,008 7,727,745
Cost of sales (1,474,215) (1,298,328) (5,515,767) (3,884,226)
========== ========== ========== ==========
Gross profit 1,153,753 1,162,582 4,526,241 3,843,519
Selling, general and
administrative expenses (413,041) (347,871) (1,573,949) (1,054,806)
Other operating income
(expense), net 16,012 (2,085) 4,933 3,773
========== ========== ========== ==========
Operating income 756,724 812,626 2,957,225 2,792,486
Interest income 28,375 17,495 93,392 60,798
Interest expense (70,211) (51,018) (275,648) (92,576)
Other financial results (12,029) 18,225 (22,754) 26,826
========== ========== ========== ==========
Income before equity in
earnings of associated
companies and income tax 702,859 797,328 2,752,215 2,787,534
Equity in earnings of
associated companies 39,691 17,942 113,276 94,667
========== ========== ========== ==========
Income before income tax 742,550 815,270 2,865,491 2,882,201
Income tax (159,156) (243,679) (823,924) (869,977)
========== ========== ========== ==========
Income for continuing
operations 583,394 571,591 2,041,567 2,012,224
Discontinued operations
Income for discontinued
operations 12,421 40,403 34,492 47,180
========== ========== ========== ==========
Income for the period 595,815 611,994 2,076,059 2,059,404
========== ========== ========== ==========
Attributable to:
Equity holders of the
Company 546,542 574,750 1,923,748 1,945,314
Minority interest 49,273 37,244 152,311 114,090
========== ========== ========== ==========
595,815 611,994 2,076,059 2,059,404
========== ========== ========== ==========
Consolidated Balance Sheet
(all amounts in thousands of
U.S. dollars) At December 31, 2007 At December 31, 2006
===================== =====================
ASSETS
Non-current assets
Property, plant and
equipment, net 3,269,007 2,939,241
Intangible assets, net 4,542,352 2,844,498
Investments in associated
companies 509,354 422,958
Other investments 35,503 26,834
Deferred tax assets 310,590 291,641
Receivables 63,738 8,730,544 41,238 6,566,410
========== ==========
Current assets
Inventories 2,598,856 2,372,308
Receivables and prepayments 222,410 272,632
Current tax assets 242,757 202,718
Trade receivables 1,748,833 1,625,241
Other investments 87,530 183,604
Cash and cash equivalents 962,497 5,862,883 1,372,329 6,028,832
========== ========== ========== ==========
Current and non current
assets held for sale 651,160
Total assets 15,244,587 12,595,242
EQUITY
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
Currency translation
adjustments 266,049 3,954
Other reserves 18,203 28,757
Retained earnings 4,813,701 7,006,277 3,397,584 5,338,619
========== ==========
Minority interest 523,573 363,011
========== ==========
Total equity 7,529,850 5,701,630
========== ==========
LIABILITIES
Non-current liabilities
Borrowings 2,869,466 2,857,046
Deferred tax liabilities 1,233,836 991,945
Other liabilities 185,410 186,724
Provisions 97,912 92,027
Trade payables 47 4,386,671 366 4,128,108
========== ==========
Current liabilities
Borrowings 1,150,779 794,197
Current tax liabilities 341,028 565,985
Other liabilities 252,204 187,701
Provisions 19,342 26,645
Customer advances 449,829 352,717
Trade payables 847,842 3,061,024 838,259 2,765,504
========== ========== ========= ==========
Liabilities associated with
current and non-current
assets held for sale 267,042
========== ========== ========= ==========
Total liabilities 7,714,737 6,893,612
Total equity and liabilities 15,244,587 12,595,242
Consolidated Cash Flow Statement
Three-month period
(all amounts in thousands ended December 31, Year ended December 31,
of U.S. dollars) 2007 2006 2007 2006
========== ========== ========== ==========
Cash flows from operating
activities
Income for the period 595,815 611,994 2,076,059 2,059,404
Adjustments for:
Depreciation and
amortization 143,173 88,996 514,820 255,004
Income tax accruals less
payments (172,473) 54,889 (393,055) 56,836
Equity in earnings of
associated companies (21,303) (17,942) (94,888) (94,667)
Interest accruals less
payments, net (84,821) 20,453 (21,302) 21,909
Income from disposal of
investment and other (18,388) (39,548) (18,388) (46,481)
Changes in provisions 3,858 687 (421) 8,894
Changes in working capital (205,094) (218,863) (110,425) (469,517)
Other, including currency
translation adjustment (9,274) (1,622) 68,224 19,474
========== ========== ========== ==========
Net cash provided by
operating activities 231,493 499,044 2,020,624 1,810,856
========== ========== ========== ==========
Cash flows from investing
activities
Capital expenditures (113,349) (139,395) (447,917) (441,472)
Acquisitions of
subsidiaries and minority
interest (35) (2,347,772) (1,927,262) (2,387,249)
Other disbursements
relating to the
acquisition of Hydril - - (71,580) -
Decrease in subsidiaries /
associated 28,516 52,995 27,321 52,995
Proceeds from disposal of
property, plant and
equipment and intangible
assets 17,118 (1,221) 24,039 15,347
Dividends and distributions
received from associated
companies 674 - 12,170 -
Changes in restricted bank
deposits 21 - 21 2,027
Investments in short terms
securities 126,916 (48,953) 96,074 (63,697)
========== ========== ========== ==========
Net cash provided by (used
in) investing activities 59,861 (2,484,346) (2,287,132) (2,822,049)
========== ========== ========== ==========
Cash flows from financing
activities
Dividends paid (153,470) - (507,631) (204,233)
Dividends paid to minority
interest in subsidiaries (14,948) (3,573) (60,263) (23,194)
Proceeds from borrowings 266,301 2,739,385 2,718,264 3,033,230
Repayments of borrowings (1,099,730) (661,770) (2,347,054) (1,105,098)
========== ========== ========== ==========
Net cash (used in) provided
by financing activities (1,001,847) 2,074,042 (196,684) 1,700,705
========== ========== ========== ==========
(Decrease) Increase in cash
and cash equivalents (710,493) 88,740 (463,192) 689,512
Movement in cash and cash
equivalents
At the beginning of the
period 1,648,554 1,276,412 1,365,008 680,591
Effect of exchange rate
changes 16,242 (144) 52,487 (5,095)
(Decrease) Increase in cash
and cash equivalents (710,493) 88,740 (463,192) 689,512
At December 31, 954,303 1,365,008 954,303 1,365,008
========== ========== ========== ==========
At December 31, At December 31,
========== ========== ========== ==========
Cash and cash equivalents 2007 2006 2007 2006
Cash and bank deposits 962,497 1,372,329 962,497 1,372,329
Bank overdrafts (8,194) (7,300) (8,194) (7,300)
Restricted bank deposits - (21) - (21)
954,303 1,365,008 954,303 1,365,008
Non-cash financing activity 2007 2006 2007 2006
Conversion of debt to
equity in subsidiaries - - 35,140 -
Contact Information: Nigel Worsnop Tenaris 1-888-300-5432 www.tenaris.com