Tenaris Announces 2011 Fourth Quarter and Annual Results

LUXEMBOURG, Feb 23 (MARKET WIRE) --
Tenaris S.A. (NYSE: TS) (BAE: TS) (BVM: TS) (MILAN: TEN) ("Tenaris")
today announced its results for the fourth quarter and year ended
December 31, 2011 with comparison to its results for the fourth quarter
and year ended December 31, 2010.

Summary of 2011 Fourth Quarter Results

(Comparison with third quarter of 2011 and fourth quarter of 2010)

Q4 2011 Q3 2011 Q4 2010
Net sales (US$ million) 2,750.6 2,494.8 10% 2,063.9 33%
Operating income (US$ million) 555.7 485.3 15% 453.8 22%
Net income (US$ million) 426.3 365.5 17% 321.2 33%
Shareholders' net income (US$ million) 399.6 325.0 23% 320.9 25%
Earnings per ADS (US$) 0.68 0.55 23% 0.54 25%
Earnings per share (US$) 0.34 0.28 23% 0.27 25%
EBITDA* (US$ million) 709.6 620.3 14% 515.5 38%
EBITDA margin (% of net sales) 26% 25% 25%

*EBITDA is defined as operating income plus depreciation, amortization and
impairment charges/(reversals)

Our sales in the fourth quarter rose 10% sequentially reflecting an
increase in shipments not only for OCTG products but also for line pipe
and mechanical pipe products. EBITDA and operating income margins
benefited from higher efficiencies in fixed costs resulting from the
increase in shipments. Our net cash position (cash and other current
investments less total borrowings) rose by US$96 million to end the year
at US$324 million, following investment of US$189 million in capital
expenditures and the payment of an interim dividend to shareholders of
US$153 million.

Summary of 2011 Annual Results

Increase/
FY 2011 FY 2010 (Decrease)
Net sales (US$ million) 9,972.5 7,711.6 29%
Operating income (US$ million) 1,894.8 1,573.5 20%
Net income (US$ million) 1,420.7 1,141.0 25%
Shareholders' net income (US$ million) 1,331.2 1,127.4 18%
Earnings per ADS (US$) 2.26 1.91 18%
Earnings per share (US$) 1.13 0.95 18%
EBITDA* (US$ million) 2,449.1 2,013.2 22%
EBITDA margin (% of net sales) 25% 26%

*EBITDA is defined as operating income plus depreciation, amortization and
impairment charges/(reversals)

In 2011, net sales increased by 29% compared to 2010 with increases
in each of our operating segments. Increased oil and gas drilling
activity in North America and most regions except for North Africa led to
higher shipments in our Tubes operating segment. Higher demand for our
premium OCTG products led to improvements in product mix and average
selling prices, particularly in the second half. Sales in our Projects
and Others operating segments benefited from higher demand in Brazil.
EBITDA and operating margins were affected by higher raw material and
fixed costs in the first half but recovered in the second half. Our net
cash position increased by US$48 million to US$324 million at the end of
the year. Capital expenditures amounted to US$863 million, including the
completion of our new rolling mill in Mexico, and investments in working
capital amounted to US$646 million.

Annual Dividend Proposal

The board of directors proposes, for the approval of the annual general
shareholders' meeting to be
held on May 2, 2012, the payment of an
annual dividend of US$0.38 per share (US$0.76 per ADS), or approximately
US$449 million, which includes the interim dividend of US$0.13 per share
(US$0.26 per ADS), or approximately US$153 million, paid in November,
2011. 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 May 24, 2012, with an ex-dividend date of May 21, 2012.

Market Background and Outlook

Global demand for energy, in spite of the difficult economic situation in
Europe, will continue to rise and this is driving energy companies to
increase their investments. Demand for tubular products for complex
applications will grow at a faster pace than that for products for
standard applications as investments will take place in more difficult
operating environments.

In 2012, drilling activity in North America is expected to remain close
to current levels, with lower dry gas drilling activity to a large extent
offset by an increase in oil and liquids directed drilling. In the rest
of the world, drilling activity is expected to continue to increase
supported by current oil and gas prices and led by growth in the
development of deepwater and unconventional reserves as well as complex
conventional gas drilling.

Sales to oil and gas customers, particularly of premium products, are
expected to increase in 2012 compared to 2011 in all regions but sales to
HPI, power generation and industrial customers will be lower in Europe.
Sales in our Projects operating segment are also expected to increase on
deliveries to a large offshore pipeline in Brazil in the second half of
the year.

Selling prices and costs are stable but operating margins should benefit
from an improving product mix and the lagging impact of lower raw
material costs.

Accordingly, sales and operating income are expected to grow in 2012
compared to 2011. However, sequential growth should not be expected in
the first quarter as our sales will be affected by seasonal maintenance
stoppages and lower shipments in our Projects operating segment.

Analysis of 2011 Fourth Quarter Results

Sales volume (metric tons) Q4 2011 Q3 2011 Q4 2010
Tubes - Seamless 709,000 650,000 9% 555,000 28%
Tubes - Welded 234,000 216,000 8% 221,000 6%
Tubes - Total 943,000 866,000 9% 776,000 22%
Projects - Welded 71,000 53,000 34% 65,000 9%
Total 1,014,000 919,000 10% 841,000 21%

Tubes Q4 2011 Q3 2011 Q4 2010
(Net sales - $ million)
North America 1,174.0 1,034.8 13% 860.2 36%
South America 360.1 338.4 6% 271.2 33%
Europe 268.0 275.3 (3%) 206.3 30%
Middle East & Africa 389.1 358.8 8% 299.6 30%
Far East & Oceania 174.7 143.0 22% 121.8 43%
Total net sales ($ million) 2,365.9 2,150.3 10% 1,759.1 34%
Cost of sales (% of sales) 61% 61% 60%
Operating income* ($ million) 495.5 429.2 15% 401.0 24%
Operating income (% of sales) 21% 20% 23%

*Operating income includes impairment reversals of US$67.3 million in
Q4 2010

Net sales of tubular products and services increased 10% sequentially,
mainly due to an increase in shipments volumes. Year on year, sales
increased 34%, due to a 22% increase in shipments and an 11% increase in
average selling prices. In North America, sales rose sequentially
throughout the region, mainly driven by higher OCTG sales in Canada and
Mexico and line pipe in United States. In South America, sales increased
6% sequentially, mainly driven by Ecuador and Colombia and partially
offset by lower sales on credit issues in Venezuela. In Europe, sales
were negatively affected by weak demand from distributors and Euro
depreciation. In the Middle East and Africa, sales increased sequentially
mainly due to resumption of sales in Libya and higher sales to
hydrocarbon process industry projects. In the Far East and Oceania, sales
grew strongly due to higher shipments of deepwater line pipe.

Operating income from tubular products and services increased 15%
sequentially as sales rose 10% and operating margin increased 100 basis
points, reflecting lower SG&A expenses as a percentage of sales.

Projects Q4 2011 Q3 2011 Q4 2010
Net sales ($ million) 186.0 150.8 23% 146.2 27%
Cost of sales (% of sales) 71% 67% 69%
Operating income ($ million) 28.3 27.3 4% 23.6 20%
Operating income (% of sales) 15% 18% 16%

Net sales of Projects amounted to US$186.0 million in the fourth
quarter of 2011, 23% higher than the third quarter and 27% higher
compared to the fourth quarter of 2010. Sequentially, the increase in
sales was mainly on lower margin shipments made to Peru.

Others Q4 2011 Q3 2011 Q4 2010
Net sales ($ million) 198.6 193.7 3% 158.6 25%
Cost of sales (% of sales) 72% 73% 72%
Operating income ($ million) 32.0 28.7 11% 29.3 9%
Operating income (% of sales) 16% 15% 18%

Net sales of other products and services amounted to US$198.6 million
in the fourth quarter of 2011, 3% higher sequentially and 25% higher
compared to the fourth quarter of 2010. The sequential increase in sales
was mainly due to higher sales at our Brazilian industrial equipment
business and higher sales of excess raw materials and power, partially
offset by lower sales of welded steel pipes for electric conduits.

Selling, general and administrative expenses, or SG&A, amounted to 17.2%
of net sales in the fourth quarter of 2011, compared to 18.5% in the
previous quarter and 19.7% in the fourth quarter of 2010. The decrease of
SG&A as a percentage of sales was mainly due to the better absorption of
fixed and semi-fixed expenses on higher sales.

Other operating income (expense) amounted to a net gain of US$0.7 million
in the fourth quarter of 2011, compared with a gain of US$1.7 million in
the previous quarter and a gain of US$74.8 million in the fourth quarter
of 2010, mainly due to the reversal of an impairment at our Canadian
welded operations.

Net interest expenses amounted to US$2.0 million in the fourth quarter of
2011, compared to US$8.5 million in the previous quarter and US$4.8
million in the same period of 2010.

Other financial results generated a loss of US$5.4 million during the
fourth quarter of 2011, compared to a gain of US$28.0 million during the
third quarter of 2011 and a loss of US$5.4 million in the same period of
2010. 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. The
gains recorded in the third quarter of 2011, were mainly attributable to
the revaluation of the U.S. dollar against the Brazilian real.

Equity in earnings of associated companies generated a gain of US$13.0
million in the fourth quarter of 2011, compared to a gain of US$1.5
million in the previous quarter and of US$11.7 million in the same period
of 2010. These results mainly derived from our equity investment in
Ternium and reflected higher results at Ternium.

Income tax charges totalled US$135.0 million in the fourth quarter of
2011, equivalent to 25% of income before equity in earnings of associated
companies and income tax, compared to 28% in the previous quarter and 30%
in the same period of 2010. During the fourth quarter of 2011, the tax
rate benefited from a more favorable mix of companies.

Income attributable to non-controlling interests amounted to US$26.8
million in the fourth quarter of 2011, compared to US$40.5 million in the
previous quarter and US$0.3 million in the fourth quarter of 2010. These
results are mainly derived from non-controlling interests at our
Brazilian subsidiary, Confab, and at our Japanese subsidiary, NKKTubes.

Cash Flow and Liquidity of 2011 Fourth Quarter

Net cash provided by operations during the fourth quarter of 2011 was
US$456.2 million, compared to US$336.3 million in the previous quarter
and US$253.8 million in the fourth quarter of 2010. Working capital
increased by US$156.7 million during the fourth quarter of 2011 (mainly
due to an increase in trade receivables), compared to an increase of
US$1.7 million in the previous quarter and of US$152.7 million in the
fourth quarter of 2010.

Capital expenditures amounted to US$188.7 million for the fourth quarter
of 2011, compared to US$212.1 million in the previous quarter and
US$286.1 million in the fourth quarter of 2010.

During the quarter, our net cash position (cash and other current
investments less total borrowings) increased by US$96.0 million to
US$323.6 million at the end of the quarter, following the payment of an
interim dividend of US$153.5 million.

Analysis of 2011 Annual Results

Increase/
Sales volume (metric tons) FY 2011 FY 2010 (Decrease)
Tubes - Seamless 2,613,000 2,206,000 18%
Tubes - Welded 881,000 744,000 18%
Tubes - Total 3,494,000 2,950,000 18%
Projects - Welded 267,000 170,000 57%
Total - Tubes + Projects 3,761,000 3,120,000 21%

Increase/
Tubes FY 2011 FY 2010 (Decrease)
Net sales ($ million)
- North America 4,133.3 3,121.7 32%
- South America 1,344.6 1,110.1 21%
- Europe 1,066.1 746.6 43%
- Middle East & Africa 1,349.4 1,263.6 7%
- Far East & Oceania 587.9 434.4 35%
Total net sales 8,481.3 6,676.4 27%
Cost of sales (% of sales) 61% 60%
Operating income ($ million) 1,618.8 1,403.3 15%
Operating income (% of sales) 19% 21%

Net sales of tubular products and services increased 27% to
US$8,481.3 million in 2011, compared to US$6,676.4 million in 2010,
reflecting an 18% increase in volumes and a 7% increase in average
selling prices. In North America, higher drilling activity in the USA and
Canada led to significantly higher shipments partially offset by lower
demand in Mexico. In South America, sales increased mainly driven by
higher demand in Argentina and Colombia. In Europe, we had higher sales
of OCTG products, as well as higher sales of line pipe and mechanical
products to distributors. In the Middle East and Africa, despite
geopolitical turmoil sales increased led by higher demand for complex
products in the Middle East. In the Far East and Oceania, sales grew
strongly, mainly due to higher sales in Indonesia.

Cost of sales of tubular products and services, expressed as a percentage
of net sales, rose from 60% to 61%, mainly due to an increase in
steelmaking raw materials during the first half of the year.

Operating income from tubular products and services, increased 15% to
US$1,618.8 million in 2011, from US$1,403.3 million in 2010, (in 2010
operating income included a gain of US$67.3 million from the reversal of
an impairment), mainly driven by an 18% increase in shipments volumes.

Increase/
Projects FY 2011 FY 2010 (Decrease)
Net sales ($ million) 724.2 428.8 69%
Cost of sales (% of sales) 68% 67%
Operating income ($ million) 138.8 63.7 118%
Operating income (% of sales) 19% 15%

Net sales of Projects increased 69% to US$724.2 million in 2011,
compared to US$428.8 million in 2010, mainly reflecting an increase in
shipments to gas and other pipeline projects in South America.

Operating income from Projects increased 118% to US$138.8 million in
2011, from US$63.7 million in 2010, reflecting an increase in sales and
higher operating margins, due to a better product mix and lower SG&A
expenses as a percentage of sales.

Increase/
Others FY 2011 FY 2010 (Decrease)
Net sales ($ million) 767.0 606.4 26%
Cost of sales (% of net sales) 70% 72%
Operating income ($ million) 137.1 106.5 29%
Operating income (% of sales) 18% 18%

Net sales of other products and services increased 26% to US$767.0
million in 2011, compared to US$606.4 million in 2010, mainly due to
higher sales of sucker rods, welded pipes for electric conduits and
industrial equipment .

Operating income from other products and services, increased 29% to
US$137.1 million in 2011, from US$106.5 million in 2010, reflecting the
increase in net sales and stable margins.

Selling, general and administrative expenses, or SG&A, decreased as a
percentage of net sales to 18.6% in 2011 compared to 19.7% in 2010,
mainly due to the better absorption of fixed and semi-fixed expenses on
higher sales.

Other operating income and expenses resulted in net income of US$5.0
million in 2011, compared to a net income of US$78.6 million in 2010,
when we recorded a gain of US$67.3 million from the reversal of an
impairment at our Canadian welded operations.

Net interest expenses totalled US$21.6 million in 2011, compared to
US$31.2 million in 2010.

Other financial results generated a gain of US$11.3 million in 2011,
compared to a loss of US$21.3 million during 2010. 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. These losses are mainly attributable
to variations in the exchange rates between our subsidiaries' functional
currencies (other than the US dollar) and the US dollar in accordance
with IFRS.

Equity in earnings of associated companies generated a gain of US$61.5
million in 2011, compared to US$70.1 million in 2010. These gains were
derived mainly from our equity investment in Ternium.

Income tax charges totalled US$525.2 million in 2011, equivalent to 28%
of income before equity in earnings of associated companies and income
tax, compared to US$450.0 million in 2010, equivalent to 30% of income
before equity in earnings of associated companies and income tax.

Net income increased to US$1,420.7 million in 2011, compared to
US$1,141.0 million in 2010, mainly reflecting higher operating results.

Income attributable to equity holders was US$1,331.2 million, or US$1.13
per share (US$2.26 per ADS), in 2011, compared to US$1,127.4 million, or
US$0.95 per share (US$1.91 per ADS) in 2010.

Income attributable to non-controlling interest was US$89.6 million in
2011, compared to US$13.7 million in 2010, mainly reflecting higher
results at our Brazilian subsidiary, Confab.

Cash Flow and Liquidity of 2011

Net cash provided by operations during 2011 was US$1,283.3 million,
compared to US$870.8 million during 2010. Working capital increased by
US$646.4 million during 2011, compared with an increase of US$644.0
million in 2010, reflecting the positive change in the levels of
activity.

Capital expenditures amounted to US$862.7 million in 2011, compared to
US$847.3 million in 2010, as we continued with the investments to
complete the new small diameter rolling mill at our Veracruz facility in
Mexico.

Dividends paid, including dividends paid to minority shareholders in
subsidiaries, amounted to US$424.1 million in 2011, of which US$248
million were paid to equity holders in respect of the 2010 fiscal year,
while US$153 million were paid to equity holders in November 2011, as an
interim dividend in respect of the dividend corresponding to the 2011
fiscal year. This compares to US$433.3 million paid in 2010, with the
same amount of dividends paid to equity holders.

During 2011, total financial debt decreased by US$313.6 million to
US$930.9 million at December 31, 2011 from US$1,244.5 million at December
31, 2010. Liquidity (cash and cash equivalents and other current
investments) decreased by US$265.6 million to US$1,254.5 million at
December 31, 2011 from US$1,520.1 million at December 31, 2010. Net cash
during 2011 increased by US$48.1 million to US$323.6 million at December
31, 2011, from US$275.6 million at December 31, 2010.

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 of U.S. Three-month period ended Year ended
dollars) December 31, December 31,
------------------------- -------------------------
2011 2010 2011 2010
----------- ----------- ----------- -----------
Continuing
operations
Net sales 2,750,551 2,063,873 9,972,478 7,711,598
Cost of sales (1,722,894) (1,277,755) (6,229,526) (4,700,810)
----------- ----------- ----------- -----------
Gross profit 1,027,657 786,118 3,742,952 3,010,788
Selling, general and
administrative
expenses (472,714) (407,072) (1,853,244) (1,515,870)
Other operating
income (expenses)
net 747 74,772 5,050 78,629
----------- ----------- ----------- -----------
Operating income 555,690 453,818 1,894,758 1,573,547
Interest income 11,093 7,387 30,840 32,855
Interest expense (13,045) (12,142) (52,407) (64,103)
Other financial
results (5,401) (5,405) 11,268 (21,305)
----------- ----------- ----------- -----------
Income before equity
in earnings of
associated
companies and
income tax 548,337 443,658 1,884,459 1,520,994
Equity in earnings
of associated
companies 12,990 11,668 61,509 70,057
----------- ----------- ----------- -----------
Income before income
tax 561,327 455,326 1,945,968 1,591,051
Income tax (134,994) (134,166) (525,247) (450,004)
----------- ----------- ----------- -----------
Income for the
period / year 426,333 321,160 1,420,721 1,141,047
=========== =========== =========== ===========

Attributable to:
Equity holders of
the Company 399,574 320,908 1,331,157 1,127,367
Non-controlling
interests 26,759 252 89,564 13,680
----------- ----------- ----------- -----------
426,333 321,160 1,420,721 1,141,047
=========== =========== =========== ===========

Consolidated Statement of Financial Position

(all amounts in thousands of
U.S. dollars) At December 31, 2011 At December 31, 2010
--------------------- ---------------------

ASSETS
Non-current assets
Property, plant and
equipment, net 4,053,653 3,780,580
Intangible assets, net 3,375,930 3,581,816
Investments in associated
companies 670,248 671,855
Other investments 2,543 43,592
Deferred tax assets 234,760 210,523
Receivables 133,280 8,470,414 120,429 8,408,795
---------- ---------- ---------- ----------

Current assets
Inventories 2,806,409 2,460,384
Receivables and prepayments 241,801 282,536
Current tax assets 168,329 249,317
Trade receivables 1,900,591 1,421,642
Available for sale assets 21,572 21,572
Other investments 430,776 676,224
Cash and cash equivalents 823,743 6,393,221 843,861 5,955,536
---------- ---------- ---------- ----------
Total assets 14,863,635 14,364,331
========== ==========

EQUITY
Capital and reserves
attributable to the Company's
equity holders 10,506,227 9,902,359
Non-controlling interests 666,716 648,221
---------- ----------
Total equity 11,172,943 10,550,580
========== ==========

LIABILITIES
Non-current liabilities
Borrowings 149,775 220,570
Deferred tax liabilities 828,545 934,226
Other liabilities 233,653 193,209
Provisions 72,975 83,922
Trade payables 2,045 1,286,993 3,278 1,435,205
---------- ---------- ---------- ----------

Current liabilities
Borrowings 781,101 1,023,926
Current tax liabilities 344,932 207,652
Other liabilities 286,762 233,590
Provisions 33,605 25,101
Customer advances 55,564 70,051
Trade payables 901,735 2,403,699 818,226 2,378,546
---------- ---------- ---------- ----------
Total liabilities 3,690,692 3,813,751
---------- ----------
Total equity and liabilities 14,863,635 14,364,331
========== ==========

Consolidated Statement of Cash Flows

(all amounts in
thousands of U.S. Three-month period ended Year ended
dollars) December 31, December 31,
2011 2010 2011 2010
----------- ----------- ----------- -----------

Cash flows from
operating activities
Income for the period /
year 426,333 321,160 1,420,721 1,141,047
Adjustments for:
Depreciation and
amortization 153,880 129,012 554,345 506,902
Income tax accruals less
payments 10,625 9,563 117,633 (57,979)
Equity in earnings of
associated companies (12,990) (11,172) (61,509) (70,057)
Interest accruals less
payments, net 3,575 (2,613) (24,880) 17,700
Changes in provisions (12,762) (5,644) (2,443) (364)
Impairment reversal - (67,293) - (67,293)
Changes in working
capital (156,683) (152,658) (646,369) (644,050)
Other, including
currency translation
adjustment 44,266 33,484 (74,194) 44,914
----------- ----------- ----------- -----------
Net cash provided by
operating activities 456,244 253,839 1,283,304 870,820
=========== =========== =========== ===========

Cash flows from
investing activities
Capital expenditures (188,728) (286,098) (862,658) (847,316)
Acquisitions of
subsidiaries and
associated companies (11,254) (302) (11,254) (302)
Proceeds from disposal
of property, plant and
equipment and
intangible assets 3,092 2,329 6,431 9,290
Dividends and
distributions received
from associated
companies - 302 17,229 14,034
Changes in investments
in short terms
securities 203,462 (34,226) 245,448 (96,549)
----------- ----------- ----------- -----------
Net cash provided by
(used in) investing
activities 6,572 (317,995) (604,804) (920,843)
=========== =========== =========== ===========

Cash flows from
financing activities
Dividends paid (153,470) (153,470) (401,383) (401,383)
Dividends paid to non-
controlling interest in
subsidiaries (10,996) (12,862) (22,695) (31,881)
Acquisitions of non-
controlling interests (27) (57) (16,606) (3,018)
Proceeds from borrowings 12,671 277,890 726,189 647,608
Repayments of borrowings (238,151) (129,053) (953,413) (862,921)
----------- ----------- ----------- -----------
Net cash used in
financing activities (389,973) (17,552) (667,908) (651,595)
=========== =========== =========== ===========

=========== =========== =========== ===========
Increase / (Decrease) in
cash and cash
equivalents 72,843 (81,708) 10,592 (701,618)
=========== =========== =========== ===========

Movement in cash and
cash equivalents
At the beginning of the
period / year 754,116 900,769 820,165 1,528,707
Effect of exchange rate
changes (13,763) 1,104 (17,561) (6,924)
Increase due to business
combinations 1,836 - 1,836 -
Increase / (Decrease) in
cash and cash
equivalents 72,843 (81,708) 10,592 (701,618)
----------- ----------- ----------- -----------
At December 31, 815,032 820,165 815,032 820,165
=========== =========== =========== ===========

At December 31, At December 31,
------------------------ ------------------------
Cash and cash
equivalents 2011 2010 2011 2010
----------- ----------- ----------- -----------
Cash and bank deposits 823,743 843,861 823,743 843,861
Bank overdrafts (8,711) (23,696) (8,711) (23,696)
----------- ----------- ----------- -----------
815,032 820,165 815,032 820,165
=========== =========== =========== ===========

Giovanni Sardagna
Tenaris
1-888-300-5432
www.tenaris.com

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