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:
July 31, 2019
Tenaris,
S.A.
By:
/s/ Cecilia Bilesio
Cecilia
Bilesio
Corporate
Secretary
Giovanni
Sardagna
Tenaris
1-888-300-5432
www.tenaris.com
Tenaris
Announces 2019 Second Quarter Results
The
financial and operational information contained in this press release is based on unaudited consolidated condensed interim financial
statements presented in U.S. dollars and prepared in accordance with International Financial Reporting Standards as issued by
the International Accounting Standard Board and adopted by the European Union, or IFRS.
Additionally,
this press release includes non-IFRS alternative performance measures i.e., EBITDA, Free Cash Flow and Net cash / debt. See exhibit
I for more details on these alternative performance measures.
Luxembourg,
July 31, 2019. -
Tenaris S.A. (NYSE, Buenos Aires and Mexico: TS and MTA Italy: TEN) (“Tenaris”) today announced
its results for the quarter ended June 30, 2019 in comparison with its results for the quarter ended June 30, 2018.
Summary
of 2019 Second Quarter Results
(Comparison
with first quarter 2019 and second quarter of 2018)
|
2Q
2019
|
1Q
2019
|
2Q
2018
|
Net
sales ($ million)
|
1,918
|
1,872
|
2%
|
1,788
|
7%
|
Operating
income ($ million)
|
234
|
259
|
(9%)
|
222
|
5%
|
Net
income ($ million)
|
240
|
243
|
(1%)
|
166
|
44%
|
Shareholders’
net income ($ million)
|
241
|
243
|
(1%)
|
168
|
43%
|
Earnings
per ADS ($)
|
0.41
|
0.41
|
(1%)
|
0.29
|
43%
|
Earnings
per share ($)
|
0.20
|
0.21
|
(1%)
|
0.14
|
43%
|
EBITDA
($ million)
|
370
|
390
|
(5%)
|
363
|
2%
|
EBITDA
margin (% of net sales)
|
19.3%
|
20.9%
|
|
20.3%
|
|
In
the second quarter of 2019, sales rose 2% quarter-on-quarter, as higher sales in Mexico and various Eastern Hemisphere markets
compensated for a seasonal decline in sales in Canada. Operating income declined 9% quarter on quarter resulting from the non-repetition
of the $15 million tariff recovery recorded in the previous quarter and higher maintenance costs associated with a major overhaul
of our facilities in Mexico. Net income amounted to 12.5% of sales.
During
the quarter, our free cash flow amounted to $245 million, as we continued to reduce our working capital in the amount of $147
million. Following a dividend payment of $331 million in May 2019, we maintained a net cash position (i.e., cash, other current
and non-current investments less total borrowings) of $706 million at the end of the quarter.
Appointment
of Chief Financial Officer
As
previously announced on June 11, 2019, effective as of August 5, 2019, Ms. Alicia Mondolo will assume the position of Chief Financial
Officer, replacing Edgardo Carlos.
Market
Background and Outlook
In
the USA, drilling activity has slowed down and is likely to remain around the present level as oil and gas prices have been subdued
and operators maintain a disciplined approach to capital expenditures. In Canada, drilling activity remains well down on last
year with no recovery expected before the end of the year.
In
Latin America, drilling activity is expected to remain at current levels until the end of the year amid uncertainty about elections
in Argentina and the financial position of Pemex.
In
the eastern Hemisphere, drilling activity continues to improve, led by gas developments in the Middle East, and a gradual recovery
in some offshore basins.
In
the third quarter, our sales will be affected by lower average selling prices, seasonal factors and the impact of major maintenance
stoppages amplified by the triennial intervention in Mexico, before recovering in the fourth quarter. We expect to mitigate most
of the impact of lower average selling prices with lower costs and complete the year with an overall EBITDA margin similar to
that of 2018.
Analysis
of 2019 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
2019
|
1Q
2019
|
2Q
2018
|
Seamless
|
674
|
640
|
5%
|
689
|
(2%)
|
Welded
|
173
|
184
|
(6%)
|
146
|
19%
|
Total
|
846
|
824
|
3%
|
834
|
1%
|
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
2019
|
1Q
2019
|
2Q
2018
|
(Net
sales - $ million)
|
|
|
|
|
|
North
America
|
863
|
893
|
(3%)
|
827
|
4%
|
South
America
|
337
|
330
|
2%
|
310
|
9%
|
Europe
|
194
|
158
|
22%
|
179
|
9%
|
Middle
East & Africa
|
315
|
301
|
5%
|
299
|
5%
|
Asia
Pacific
|
105
|
81
|
29%
|
71
|
47%
|
Total
net sales ($ million)
|
1,814
|
1,763
|
3%
|
1,686
|
8%
|
Operating
income ($ million)
|
216
|
238
|
(9%)
|
197
|
10%
|
Operating
margin (% of sales)
|
11.9%
|
13.5%
|
|
11.7%
|
|
Net
sales of tubular products and services
increased 3% sequentially and 8% year on year. Sales increased in all regions except
North America, in line with the increase in volumes as average selling prices remained flat. In North America sales declined 3%
following the decline in Canada due to the spring break-up season, largely offset by higher sales in Mexico. In South America
we had higher sales of conductor casing in Brazil. In Europe we had a strong quarter in the North Sea and higher sales of line
pipe to distributors. In the Middle East and Africa sales increased due to higher sales in Kuwait, UAE and Northern Africa. In
Asia Pacific, sales increased due to higher sales in China and Indonesia.
Operating
results from tubular products and services
decreased 9% sequentially, from a gain of $238 million in the previous quarter
to a gain of $216 million in the second quarter of 2019. Despite the increase in revenues, our operating margin decreased 160
basis points mainly due to flat average selling prices despite higher costs (resulting principally from the non-repetition of
the $15 million tariff recovery recorded in the previous quarter and higher maintenance costs associated with a major overhaul
of our facilities in Mexico).
Others
The
following table indicates, for our Others business segment, net sales, operating income and operating income as a percentage of
net sales for the periods indicated below:
Others
|
2Q
2019
|
1Q
2019
|
2Q
2018
|
Net
sales ($ million)
|
104
|
109
|
(5%)
|
103
|
1%
|
Operating
income ($ million)
|
18
|
21
|
(12%)
|
25
|
(27%)
|
Operating
income (% of sales)
|
17.7%
|
19.1%
|
|
24.5%
|
|
Net
sales of other products and services
decreased 5% sequentially and increased 1% compared to the second quarter of 2018. The
sequential decrease is mainly related to lower sales of energy and scrap.
Selling,
general and administrative expenses
,
or SG&A
, amounted to $339 million, or 17.7% of net sales, in the second quarter
of 2019, compared to $345 million, 18.5% in the previous quarter and $338 million, 18.9% in the second quarter of 2018. Sequentially
SG&A decreased 2% due to lower allowance for doubtful accounts and logistic costs, partially offset by higher consultancy
fees, general expenses and provisions for contingencies.
Financial
results
amounted to a loss of $6 million in the second quarter of 2019, compared to a gain of $24 million in the previous
quarter and a gain of $39 million in the second quarter of 2018, as during the 2Q 2019 there was a general appreciation of our
most significant currencies versus the U.S. dollar, while in the previous quarter there was a significant depreciation of the
Argentine peso. The loss of the quarter corresponds mainly to an FX loss of $8 million; $5 million loss related to the Japanese
Yen appreciation mainly on newly recorded leasing liabilities (after adoption of IFRS 16), $1 million loss related to the Argentine
peso appreciation on trade, social and fiscal payables at Argentine subsidiaries which functional currency is the U.S. dollar
and $1 million loss on Euro denominated intercompany liabilities due to the appreciation of the Euro.
Equity
in earnings of non-consolidated companies
amounted to $26 million in the second quarter of 2019, compared to $29 million in
the previous quarter and $41 million in the second quarter of last year. These results are mainly derived from our equity investment
in Ternium (NYSE:TX).
Income
tax
charge amounted to $15 million in the second quarter of 2019, compared to $70 million in the previous quarter and $135
million in the second quarter of last year. During the quarter, our income tax charge was reduced mainly by the effect of the
Argentine peso revaluation on the tax base at our Argentine subsidiaries which have U.S. dollar as their functional currency,
and the application of the fiscal inflation adjustment in Argentine subsidiaries(~$25 million).
Cash
Flow and Liquidity of 2019 Second Quarter
Net
cash provided by operating activities during the second quarter of 2019 was $342 million, compared to $548 million in the first
quarter of 2019 and $351 million in the second quarter of last year. During the second quarter of 2019 we generated $147 million
from the reduction in working capital.
Free
cash flow amounted to $245 million after capital expenditures of $97 million. Following a dividend payment of $331 million in
May 2019, we maintained a net cash position (i.e., cash, other current and non-current investments, derivatives hedging borrowings
and investments less total borrowings) of $706 million at the end of the quarter.
Analysis
of 2019 First Half Results
|
6M
2019
|
6M
2018
|
Increase/(Decrease)
|
Net
sales ($ million)
|
3,790
|
3,655
|
4%
|
Operating
income (loss) ($ million)
|
494
|
435
|
14%
|
Net
income ($ million)
|
482
|
402
|
20%
|
Shareholders’
net income ($ million)
|
484
|
403
|
20%
|
Earnings
per ADS ($)
|
0.82
|
0.68
|
20%
|
Earnings
per share ($)
|
0.41
|
0.34
|
20%
|
EBITDA
($ million)
|
760
|
717
|
6%
|
EBITDA
margin (% of net sales)
|
20.1%
|
19.6%
|
|
Our
sales in the first half of 2019 increased 4% compared to the first half of 2018. While volumes sold declined 6%, average selling
prices increased 10% as the proportion of seamless pipes sold increased after completion of deliveries to Zohr project in the
Middle East and Africa region. Sales increased in all regions, except in the Middle East and Africa. EBITDA increased 6% to $760
million in the first half of 2019 compared to $717 million in the first half of 2018, following the increase in sales. Net income
attributable to owners of the parent during the first half of 2019 was $484 million or $0.82 per ADS, which compares with $403
million or $0.68 per ADS in the first half of 2018. The improvement in net income mainly reflects a better operating environment
together with a lower income tax, partially offset by lower financial results and results from associated companies.
Cash
flow provided by operating activities amounted to $890 million during the first half of 2019, including a reduction in working
capital of $346 million. Following a dividend payment of $331 million in May 2019, and capital expenditures of $183 million during
the first half of 2019, we maintained a positive net cash position (i.e., cash, other current and non-current investments, derivatives
hedging borrowings and investments less total borrowings) of $706 million at the end of June 2019.
The
following table shows our net sales by business segment for the periods indicated below:
Net
sales ($ million)
|
6M
2019
|
6M
2018
|
Increase/(Decrease)
|
Tubes
|
3,578
|
94%
|
3,452
|
94%
|
4%
|
Others
|
212
|
6%
|
203
|
6%
|
5%
|
Total
|
3,790
|
100%
|
3,655
|
100%
|
4%
|
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)
|
6M
2019
|
6M
2018
|
Increase/(Decrease)
|
Seamless
|
1,314
|
1,340
|
(2%)
|
Welded
|
357
|
431
|
(17%)
|
Total
|
1,671
|
1,771
|
(6%)
|
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
|
6M
2019
|
6M
2018
|
Increase/(Decrease)
|
(Net
sales - $ million)
|
|
|
|
North
America
|
1,757
|
1,634
|
8%
|
South
America
|
667
|
595
|
12%
|
Europe
|
352
|
331
|
6%
|
Middle
East & Africa
|
616
|
755
|
(18%)
|
Asia
Pacific
|
186
|
137
|
36%
|
Total
net sales ($ million)
|
3,578
|
3,452
|
4%
|
Operating
income ($ million)
|
455
|
391
|
16%
|
Operating
income (% of sales)
|
12.7%
|
11.3%
|
|
Net
sales of tubular products and services
increased 4% to $3,578 million in the first half of 2019, compared to $3,452 million
in the first half of 2018, as a reduction of 6% in volumes was offset by an increase in average selling prices as the proportion
of seamless pipes increased following the completion of deliveries of welded pipes to Zohr project offshore Egypt. The increase
in sales came from all regions, except the Middle East and Africa. In the first half of 2019, the average number of active drilling
rigs, or rig count grew 3% worldwide compared to the first half of 2018. Rig count in the United States and Canada declined 3%,
while in the rest of the world the rig count grew 10% year on year.
Operating
results from tubular products and services
increased 16%, from $391 million in the first half of 2018, to $455 million in
the first half of 2019. Results improved following an increase in sales and in margins due a richer mix of products sold.
Others
The
following table indicates, for our Others business segment, net sales, operating income and operating income as a percentage of
net sales for the periods indicated below:
Others
|
6M
2019
|
6M
2018
|
Increase/(Decrease)
|
Net
sales ($ million)
|
212
|
203
|
5%
|
Operating
income ($ million)
|
39
|
44
|
(11%)
|
Operating
margin (% of sales)
|
18.4%
|
21.6%
|
|
Net
sales of other products and services
increased 5% to $212 million in the first half of 2019, compared to $203 million in the
first half of 2018, mainly due to higher sales of sucker rods.
Operating
income from other products and services
decreased from $44 million in the first half of 2018 to $39 million in the first half
of 2019 due to a decrease in operating margin from 22% to 18%.
Selling,
general and administrative expenses, or SG&A,
amounted to $684 million in the first half of 2019, representing 18% of
sales, and $687 million in the first half of 2018, representing 19% of sales.
Financial
results
amounted to a gain of $18 million in the first half of 2019, compared to a gain of $31 million in the first half of
2018. The gain in the first half of 2019 corresponds mainly to an FX gain of $18 million; $19 million related to the Argentine
peso devaluation on Peso denominated financial, trade, social and fiscal payables at Argentine subsidiaries which functional currency
is the U.S. dollar. The gain in the first half of 2018 corresponds mainly to a gain of $19 million related to the Argentine peso
devaluation and $14 million related to the Euro depreciation on Euro denominated intercompany liabilities (of which $13 million
were offset in the currency translation reserve in equity).
Equity
in earnings of non-consolidated companies
generated a gain of $55 million in the first half of 2019, compared to a gain of
$87 million in the first half of 2018. These results are mainly derived from our equity investment in Ternium (NYSE:TX).
Income
tax
amounted to a charge of $85 million in the first half of 2019, compared to $151 million in the first half of 2018. The
income tax charge in the first half of 2018 was affected by the Mexican and Argentine peso devaluation on the tax base at our
Mexican and Argentine subsidiaries which have the U.S. dollar as their functional currency. During the first half of 2019, our
income tax charge was reduced mainly by the application of the fiscal inflation adjustment in Argentine subsidiaries(~$32 million).
Cash
Flow and Liquidity of 2019 First Half
Net
cash provided by operating activities during the first half of 2019 amounted to $890 million (including a reduction in working
capital of $346 million), compared to cash provided by operations of $322 million (net of an increase in working capital of $358
million) in the first half of 2018.
Capital
expenditures amounted to $183 million in the first half of 2019, compared to $196 million in the first half of 2018. Free cash
flow amounted to $707 million in the first half of 2019.
Following
a dividend payment of $331 million in May 2019, our financial position at June 30, 2019, amounted to a net cash position (i.e.,
cash, other current and non-current investments, derivatives hedging borrowings and investments less total borrowings) of $706
million.
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, 2019 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 1, 2019, at 9:00 a.m. (Eastern Time). Following a
brief summary, the conference call will be opened to questions. To access the conference call dial in +1 866 789 1656 within North
America or +1 630 489 1502 Internationally. The access number is “2147716”. 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 12.00 pm ET on August 1
through 12.00 pm on August 9, 2019. To access the replay by phone, please dial 855 859 2056 or 404 537 3406 and enter passcode
“2147718” 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 U.S. dollars)
|
Three-month
period
ended June 30,
|
Six-month period ended
June 30,
|
|
2019
|
2018
|
2019
|
2018
|
Continuing
operations
|
Unaudited
|
Unaudited
|
|
Net
sales
|
1,917,965
|
1,788,484
|
3,789,724
|
3,654,719
|
Cost
of sales
|
(1,342,819)
|
(1,226,557)
|
(2,614,618)
|
(2,532,063)
|
Gross
profit
|
575,146
|
561,927
|
1,175,106
|
1,122,656
|
Selling,
general and administrative expenses
|
(338,608)
|
(337,574)
|
(683,974)
|
(687,208)
|
Other
operating income (expense), net
|
(2,050)
|
(1,917)
|
2,372
|
(815)
|
Operating
income
|
234,488
|
222,436
|
493,504
|
434,633
|
Finance
Income
|
12,736
|
9,609
|
23,197
|
18,982
|
Finance
Cost
|
(11,287)
|
(10,422)
|
(18,269)
|
(20,596)
|
Other
financial results
|
(7,585)
|
39,383
|
13,330
|
32,317
|
Income
before equity in earnings of non-consolidated companies and income tax
|
228,352
|
261,006
|
511,762
|
465,336
|
Equity
in earnings of non-consolidated companies
|
26,289
|
40,920
|
55,424
|
86,946
|
Income
before income tax
|
254,641
|
301,926
|
567,186
|
552,282
|
Income
tax
|
(14,942)
|
(135,454)
|
(84,898)
|
(150,576)
|
Income
for the period
|
239,699
|
166,472
|
482,288
|
401,706
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
Owners
of the parent
|
241,486
|
168,328
|
484,365
|
403,311
|
Non-controlling
interests
|
(1,787)
|
(1,856)
|
(2,077)
|
(1,605)
|
|
239,699
|
166,472
|
482,288
|
401,706
|
|
|
|
|
|
|
Consolidated
Condensed Interim Statement of Financial Position
(all
amounts in thousands of U.S. dollars)
|
At
June 30, 2019
|
|
At
December 31, 2018
|
|
Unaudited
|
|
|
ASSETS
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
Property,
plant and equipment, net
|
6,173,577
|
|
|
6,063,908
|
|
Intangible
assets, net
|
1,575,561
|
|
|
1,465,965
|
|
Right-of-use
assets, net
|
230,084
|
|
|
-
|
|
Investments
in non-consolidated companies
|
862,905
|
|
|
805,568
|
|
Other
investments
|
26,941
|
|
|
118,155
|
|
Deferred
tax assets
|
205,806
|
|
|
181,606
|
|
Receivables,
net
|
156,173
|
9,231,047
|
|
151,905
|
8,787,107
|
Current
assets
|
|
|
|
|
|
Inventories,
net
|
2,432,657
|
|
|
2,524,341
|
|
Receivables
and prepayments, net
|
133,878
|
|
|
155,885
|
|
Current
tax assets
|
125,412
|
|
|
121,332
|
|
Trade
receivables, net
|
1,481,076
|
|
|
1,737,366
|
|
Derivative
financial instruments
|
16,696
|
|
|
9,173
|
|
Other
investments
|
360,694
|
|
|
487,734
|
|
Cash
and cash equivalents
|
1,201,987
|
5,752,400
|
|
428,361
|
5,464,192
|
Total
assets
|
|
14,983,447
|
|
|
14,251,299
|
EQUITY
|
|
|
|
|
|
Capital
and reserves attributable to owners of the parent
|
|
11,941,498
|
|
|
11,782,882
|
Non-controlling
interests
|
|
208,698
|
|
|
92,610
|
Total
equity
|
|
12,150,196
|
|
|
11,875,492
|
LIABILITIES
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
Borrowings
|
49,375
|
|
|
29,187
|
|
Lease
liabilities
|
193,057
|
|
|
-
|
|
Deferred
tax liabilities
|
355,302
|
|
|
379,039
|
|
Other
liabilities
|
240,749
|
|
|
213,129
|
|
Provisions
|
37,828
|
876,311
|
|
36,089
|
657,444
|
Current
liabilities
|
|
|
|
|
|
Borrowings
|
844,926
|
|
|
509,820
|
|
Lease
liabilities
|
34,431
|
|
|
-
|
|
Derivative
financial instruments
|
1,960
|
|
|
11,978
|
|
Current
tax liabilities
|
121,101
|
|
|
250,233
|
|
Other
liabilities
|
241,704
|
|
|
165,693
|
|
Provisions
|
32,023
|
|
|
24,283
|
|
Customer
advances
|
44,075
|
|
|
62,683
|
|
Trade
payables
|
636,720
|
1,956,940
|
|
693,673
|
1,718,363
|
Total
liabilities
|
|
2,833,251
|
|
|
2,375,807
|
Total
equity and liabilities
|
|
14,983,447
|
|
|
14,251,299
|
Consolidated
Condensed Interim Statement of Cash Flows
|
|
Three-month
period ended
June 30,
|
Six-month
period ended
June 30,
|
(all
amounts in thousands of U.S. dollars)
|
|
2019
|
2018
|
2019
|
2018
|
Cash
flows from operating activities
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
|
Income
for the period
|
|
239,699
|
166,472
|
482,288
|
401,706
|
Adjustments
for:
|
|
|
|
|
|
Depreciation
and amortization
|
|
135,220
|
140,401
|
266,555
|
282,203
|
Income
tax accruals less payments
|
|
(164,370)
|
92,667
|
(154,419)
|
67,851
|
Equity
in earnings of non-consolidated companies
|
|
(26,289)
|
(40,920)
|
(55,424)
|
(86,946)
|
Interest
accruals less payments, net
|
|
(855)
|
6,155
|
(295)
|
6,775
|
Changes
in provisions
|
|
2,844
|
(7,148)
|
974
|
(5,621)
|
Changes
in working capital
|
|
146,556
|
(28,220)
|
346,045
|
(357,655)
|
Currency
translation adjustment and others
|
|
9,496
|
21,835
|
4,193
|
13,362
|
Net
cash provided by operating activities
|
|
342,301
|
351,242
|
889,917
|
321,675
|
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
|
Capital
expenditures
|
|
(97,378)
|
(103,793)
|
(183,064)
|
(195,731)
|
Changes
in advance to suppliers of property, plant and equipment
|
|
1,535
|
4,632
|
2,036
|
4,218
|
Acquisition
of subsidiaries, net of cash acquired
|
|
-
|
-
|
(132,845)
|
-
|
Loan
to non-consolidated companies
|
|
-
|
(1,320)
|
-
|
(3,520)
|
Repayment
of loan by non-consolidated companies
|
|
-
|
3,520
|
40,470
|
5,470
|
Proceeds
from disposal of property, plant and equipment and intangible assets
|
|
474
|
1,224
|
736
|
2,708
|
Dividends
received from non-consolidated companies
|
|
28,974
|
25,722
|
28,974
|
25,722
|
Changes
in investments in securities
|
|
163,129
|
311,462
|
229,906
|
396,078
|
Net
cash (used in) provided by investing activities
|
|
96,734
|
241,447
|
(13,787)
|
234,945
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
Dividends
paid
|
|
(330,550)
|
(330,550)
|
(330,550)
|
(330,550)
|
Dividends
paid to non-controlling interest in subsidiaries
|
|
(672)
|
(1,108)
|
(672)
|
(1,108)
|
Changes
in non-controlling interests
|
|
-
|
(1)
|
1
|
(1)
|
Payments
of lease liabilities
|
|
(9,276)
|
-
|
(19,447)
|
-
|
Proceeds
from borrowings
|
|
460,320
|
298,296
|
644,716
|
576,007
|
Repayments
of borrowings
|
|
(274,042)
|
(448,811)
|
(413,094)
|
(696,852)
|
Net
cash (used in) financing activities
|
|
(154,220)
|
(482,174)
|
(119,046)
|
(452,504)
|
|
|
|
|
|
|
Increase
in cash and cash equivalents
|
|
284,815
|
110,515
|
757,084
|
104,116
|
Movement
in cash and cash equivalents
|
|
|
|
|
|
At
the beginning of the period
|
|
897,502
|
324,741
|
426,717
|
330,090
|
Effect
of exchange rate changes
|
|
700
|
(8,000)
|
(784)
|
(6,950)
|
Increase
in cash and cash equivalents
|
|
284,815
|
110,515
|
757,084
|
104,116
|
At
June 30,
|
|
1,183,017
|
427,256
|
1,183,017
|
427,256
|
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).
|
Three-month
period
ended June 30,
|
Six-month
period
ended June 30,
|
|
2019
|
2018
|
2019
|
2018
|
Operating
income
|
234,488
|
222,436
|
493,504
|
434,633
|
Depreciation
and amortization
|
135,220
|
140,401
|
266,555
|
282,203
|
EBITDA
|
369,708
|
362,837
|
760,059
|
716,836
|
Free
Cash Flow
Free
cash flow is a measure of financial performance, calculated as operating cash flow less capital expenditures. FCF represents the
cash that a company is able to generate after spending the money required to maintain or expand its asset base.
Free
cash flow is calculated in the following manner:
Free
cash flow = Net cash (used in) provided by operating activities - Capital expenditures.
(all
amounts in thousands of U.S. dollars)
|
Three-month
period ended June 30,
|
Six-month
period ended June 30,
|
|
2019
|
2018
|
2019
|
2018
|
Net
cash provided by (used in) operating activities
|
342,301
|
351,242
|
889,917
|
321,675
|
Capital
expenditures
|
(97,378)
|
(103,793)
|
(183,064)
|
(195,731)
|
Free
cash flow
|
244,923
|
247,449
|
706,853
|
125,944
|
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 and Non-Current)+/- Derivatives hedging borrowings and investments–
Borrowings (Current and Non-Current).
(all
amounts in thousands of U.S. dollars)
|
At
June 30,
|
|
2019
|
2018
|
Cash
and cash equivalents
|
1,201,987
|
427,960
|
Other
current investments
|
360,694
|
730,240
|
Non-current
Investments
|
22,800
|
192,613
|
Derivatives
hedging borrowings and investments
|
15,051
|
(87,806)
|
Borrowings
– current and non-current
|
(894,301)
|
(840,495)
|
Net
cash / (debt)
|
706,231
|
422,512
|