Tenaris S.A. (NYSE:TS) Q3 2023 Earnings Call Transcript
Tenaris S.A. (NYSE:TS) Q3 2023 Earnings Call Transcript November 5, 2023
Operator: Good day, and thank you for standing by. Welcome to the Third Quarter 2023 Tenaris S.A. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the 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 turn the call over to the Head of Investor Relations, Mr. Giovanni Sardagna.
Giovanni Sardagna: Thank you, Carmen, and welcome to Tenaris 2023 Third Quarter Conference Call. Before we start, I would like to remind you that we will be discussing forward-looking information in the 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; Gabriel Podskubka, our Chief Operating Officer; and Luca Zanotti, President of our US 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 2023 reached $3.2 billion, up 9% compared to those of the corresponding quarter of last year, but down 21% sequentially, mainly due to lower volumes and prices throughout the Americas, lower quarterly shipments to offshore projects and lower pipeline shipments in Argentina.
Average selling prices in our Tubes operating segment increased 2% compared to the corresponding quarter of last year, but declined 5% sequentially. As anticipated, our EBITDA, excluding a one-off gain of $32 million, fell just short of $1 billion with a margin of 31%. The sequential EBITDA decline was mainly driven by the ongoing price declines in the Americas. Our net income for the quarter at $547 million was affected by non-cash charges of $144 million related to the remeasurement and recycling of CTA to the income statement of our direct and indirect investment in Usiminas. Cash generated by operating activities during the quarter was $1.3 billion, while our free cash flow for the quarter was $1.1 billion, with a further reduction in working capital of $415 million.
Our net cash position at the end of the quarter rose to $3.3 billion. Our Board of Directors approved the payment of an interim dividend of $0.20 per share or $0.40 per ADR to be paid on November 22. The interim dividend is up 18% compared to the interim dividend we paid last year. In addition to the dividend, the Board of Directors also approved a share buyback of $1.2 billion to be executed within the next 12 months. Now, I will ask Paolo to say a few words before we open the call to questions.
Paolo Rocca: Thank you very much, Giovanni, and good morning to all of you. As anticipated, our third quarter results were affected by, among other factors, lower onshore drilling activity and an ongoing adjustment in market price level in the Americas and the lower level of shipment in certain regions following a strong second quarter. On the other hand, we had another extraordinary quarter for cash flow with a generation of $1.1 billion of free cash flow, making the $3.1 billion in the year-to-date. With this cash flow adding to our already-strong financial position, yesterday, we announced the launch of our first share buyback program, together with an 18% increase in our interim dividend. The share buyback program, which is for an amount of up to $1.2 billion, is to be carried over -- carried out over the next 12 months.
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