Company Announcements

Tenaris Announces 2021 Fourth Quarter and Annual Results

Source: GlobeNewswire
Tenaris Announces 2021 Fourth Quarter and Annual Results

The financial and operational information contained in this press release is based on audited consolidated 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, Net cash / debt and Free Cash Flow. See exhibit I for more details on these alternative performance measures.

LUXEMBOURG, Feb. 16, 2022 (GLOBE NEWSWIRE) -- Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) (“Tenaris”) today announced its results for the fourth quarter and year ended December 31, 2021 with comparison to its results for the fourth quarter and year ended December 31, 2020.

Summary of 2021 Fourth Quarter Results

(Comparison with third quarter of 2021 and fourth quarter of 2020)

 4Q 20213Q 20214Q 2020
Net sales ($ million)2,057 1,754 17%1,131 82%
Operating income ($ million)273 231 18%7 3,600%
Net income ($ million)336 326 3%110 207%
Shareholders’ net income ($ million)370 330 12%107 247%
Earnings per ADS ($)0.63 0.56 12%0.18 247%
Earnings per share ($)0.31 0.28 12%0.09 247%
EBITDA ($ million)483 379 27%192 151%
EBITDA margin (% of net sales)23.5%21.6% 17.0% 


In the fourth quarter of 2021, our sales rose sequentially a further 17%, driven by the ongoing recovery in drilling activity and OCTG prices in North America, where OCTG inventory levels at distributors have fallen below normal levels. Our quarterly EBITDA continues to grow strongly and its margin rose above 23%, despite higher raw material and energy costs. Our operating income, which included a $57 million impairment charge on NKKTubes fixed assets reflecting the forthcoming closure of its facilities during 2022, rose to $273 million. Shareholders’ net income reached $370 million and continues to receive a strong contribution from our investment in Ternium.

With the recovery in activity and the ongoing ramp up of our production facilities in the USA, our working capital rose during the quarter and we recorded a negative free cash flow for the quarter of $23 million. Following interim dividend payments of $153 million in November, we ended the year with a positive net cash balance of $700 million.

Summary of 2021 Annual Results

 12M 202112M 2020Increase/(Decrease)
Net sales ($ million)6,521 5,147 27%
Operating income (loss) ($ million)708 (663)207%
Net income (loss) ($ million)1,053 (642)264%
Shareholders’ net income (loss) ($ million)1,100 (634)273%
Earnings (losses) per ADS ($)1.86 (1.07)273%
Earnings (losses) per share ($)0.93 (0.54)273%
EBITDA* ($ million)1,359 638 113%
EBITDA margin (% of net sales)20.8%12.4% 

*EBITDA is defined as operating (loss) income plus depreciation, amortization and impairment charges / (reversals). EBITDA includes severance charges of $29 million in 2021 and $142 million in 2020. If these charges were not included EBITDA would have amounted to $1,388 million (21.3%) in 2021 and $780 million (15.2%) in 2020.

In 2021, our results recovered strongly from the worst effects of the pandemic bolstered by the recovery in oil and gas drilling activity in the Americas and the structural measures we took to improve our profitability over the longer term. Our sales rose 27% year on year, while our EBITDA more than doubled with the margin surpassing its pre-pandemic level. At the net income level, our result benefited from an extraordinary contribution from our equity participations in Ternium and Usiminas, reflecting record prices in the flat steel sector, which contrasts with that of 2020, which was impacted by $622 million impairment charges on the carrying value of goodwill and other assets in the United States.

Operating cash flow for the year amounted to $119 million in 2021, compared to $1,520 million in 2020 due to a working capital build of $1.0 billion driven by the ramp up of activity. Although in absolute amounts the build up in working capital in 2021 was similar to the corresponding reduction in 2020, it is lower in terms of days of sales and includes higher raw material and energy costs embedded in inventories. After capital expenditures of $240 million and dividend payments of $319 million during the year, our net cash position declined to $700 million at the end of the year.

Climate Change

After establishing our mid-term target for reducing the intensity of carbon emissions from our tubular operations worldwide by 30% compared to a 2018 baseline by the year 2030, we made good progress towards this strategic objective during 2021. By focusing on energy efficiency measures and the reduction of the use of pig iron in our electric furnaces, the carbon emissions intensity of our tubular operations have declined to 1.2 tons of CO2 per ton of steel processed, which compares with the 1.4 tons of CO2 per ton of steel processed in 2018 and 1.3 tons of CO2 per ton of steel processed in 2020. These figures use worldsteel methodology with local emission factors for purchased electricity.

These reductions have been principally in our Scope 3 emissions. Now, we are looking to reduce the intensity of our Scope 2 emissions by increasing the use of renewable energy in a number of our facilities around the world. In this respect, our Board of Directors has approved an investment plan to build a wind farm in Argentina at a cost of $190 million which would reduce our CO2 emissions in that country by around 150,000 tons per year, and supply close to 50% of the electric energy requirements at our Siderca integrated seamless pipe mill. This investment is expected to be completed during 2023.

Market Background and Outlook

The global economy has rebounded strongly this year and, with it demand for energy including oil and gas. Oil and gas production increases have not kept pace with increases in consumption resulting in lower inventory levels and higher prices. Prices for oil exceed pre-pandemic levels and prices for LNG reached unprecedented levels during the fourth quarter of 2021.

Although investments in oil and gas drilling are expected to increase during 2022, from their low levels over the past two years, the level of spending is unlikely to return to pre-pandemic levels, as the oil and gas majors and publicly-listed US shale producers prioritize capital discipline and returns to shareholders, while OPEC+ countries continue to manage production level increases.

Drilling activity is increasing around the world. Over the past year, the increase has been led by the U.S. and Canada where it will continue at a lower pace. Latin America is leading the recovery in offshore drilling activity, with rises in Brazil, Mexico and Guyana, while onshore drilling activity should step up in the Vaca Muerta shale in Argentina if country investment conditions allow. In the Eastern Hemisphere, the more recent recovery in drilling activity should extend further through the year, led by the Middle East.

In the first half of 2022, we anticipate further increases in sales on higher prices in North America and shipments to an offshore pipeline in Europe. In the second quarter, we should see a significant recovery of sales in the Middle East and Africa. Despite higher energy costs in Europe, our EBITDA margin should also continue to increase in the first half.

Annual Dividend Proposal

Upon approval of the Company´s annual accounts in March 2022, the board of directors intends to propose, for approval of the annual general shareholders’ meeting to be held on May 3, 2022, the payment of dividends in an aggregate amount of approximately $484 million, which would include the interim dividend of approximately $153 million paid in November 2021. If the annual dividend is approved by the shareholders, a dividend of $0.28 per share ($0.56 per ADS), or approximately $331 million, will be paid on May 25, 2022, with an ex-dividend date on May 23, 2022 and record date on May 24, 2022.

Analysis of 2021 Fourth Quarter Results

Tubes Sales volume (thousand metric tons)4Q 20213Q 20214Q 2020
Seamless7316758%42373%
Welded6871(4%)103(34%)
Total7997467%52652%


Tubes4Q 20213Q 20214Q 2020
(Net sales - $ million)     
North America1,118 901 24%391 186%
South America341 314 8%160 113%
Europe167 141 19%137 22%
Middle East & Africa209 199 5%294 (29%)
Asia Pacific75 52 44%68 10%
Total net sales ($ million)1,910 1,607 19%1,050 82%
Operating income ($ million)245 200 22%3 8,059%
Operating margin (% of sales)12.8%12.4% 0.3% 

Net sales of tubular products and services increased 19% sequentially and 82% year on year. Volumes increased 7% sequentially and 52% year on year while average selling prices increased 11% sequentially and 20% year on year. In North America, sales increased 24% sequentially reflecting higher prices and volumes for OCTG throughout the region following higher drilling activity and declining market inventory levels. In South America, we had higher sales in Argentina with increased activity in Vaca Muerta but lower sales of connectors and offshore line pipes in Brazil. In Europe sales increased 19% sequentially due to higher sales of offshore line pipes, with the first deliveries to the Sakarya project in Turkey, and higher prices on mechanical pipe sales to distributors. In the Middle East and Africa sales remained at low levels, particularly in Kuwait pending the transition to the new contract, however Rig Direct® sales in U.A.E. are ramping up. In Asia Pacific sales increased 44% sequentially, mainly due to higher sales of high alloy products in China.

Operating income from tubular products and services, amounted to $245 million in the fourth quarter of 2021, compared to $200 million in the previous quarter and $3 million in the fourth quarter of 2020. Operating results of the quarter include a $57 million impairment charge on NKKTubes fixed assets. During the quarter the operating margin increased following an 11% increase in average selling prices while cost of sales per ton increased 9% as higher raw materials and energy costs were offset by higher prices mainly in North America thanks to an increase in drilling activity and lower market inventory levels. SG&A as a percentage of sales also declined sequentially.

Others4Q 20213Q 20214Q 2020
Net sales ($ million)147 147 0%81 82%
Operating income ($ million)29 31 (9%)4 609%
Operating margin (% of sales)19.4%21.4% 5.0% 

Net sales of other products and services remained flat sequentially while they increased 82% year on year. Sequentially, a steep decline in sales and operating income at our industrial equipment business in Brazil was offset mainly by an improvement in sales and results from the sale of energy and excess raw materials and of pipes for construction activities from our Piombino facility in Italy.

Selling, general and administrative expenses, or SG&A, amounted to $338 million (16.4% of net sales), compared to $317 million (18.1%) in the previous quarter and $242 million (21.4%) in the fourth quarter of 2020. While SG&A expenses increased sequentially, mainly due to higher selling expenses, labor costs and services and fees, partially offset by a decrease in the provision for contingencies, they declined as a percentage of sales.

Impairment charge. In December, 2021, as a result of the expected termination of our NKKTubes joint venture, we recorded a $57 million impairment on its fixed assets.

Other operating income amounted to $12 million in the fourth quarter of 2021, compared with $8 million in the previous quarter and $14 million in the fourth quarter of 2020. The result of the quarter is mainly explained by a $7 million gain from the sale of the Geneva structural pipe business in the United States on November 1, 2021.

Financial results were a gain of $2 million in the fourth quarter of 2021, close to zero in the previous quarter and a loss of $14 million in the fourth quarter of 2020. Result of the quarter is mainly explained by a $1 million net interest expense offset by a $3 million net foreign exchange gain.

Equity in earnings of non-consolidated companies generated a gain of $133 million in the fourth quarter of 2021, compared to $154 million in the previous quarter and $81 million in the same period of 2020. These positive results are mainly derived from our equity investment in Ternium (NYSE:TX) and Usiminas.

Income tax charge amounted to $72 million in the fourth quarter of 2021, compared to $59 million in the previous quarter and $35 million in the fourth quarter of 2020. Taxes increased during the quarter due to the better results at several subsidiaries following the improvement in activity.

Cash Flow and Liquidity of 2021 Fourth Quarter

Net cash provided by operations during the fourth quarter of 2021 was $46 million, compared with $53 million in the previous quarter and $139 million in the fourth quarter of 2020. As activity continues to recover working capital continues to rise showing a $373 million increase during the quarter, mainly driven by higher inventories and trade receivables.

With capital expenditures of $69 million for the fourth quarter of 2021 ($74 million in the previous quarter and $38 million in the fourth quarter of 2020), during the quarter we had a negative free cash flow of $23 million.

Following dividend payments of $153 million during the quarter, we maintained a positive net cash position of $700 million at December 31, 2021.

Analysis of 2021 Annual Results  

Tubes Sales volume (thousand metric tons)12M 202112M 2020Increase/(Decrease)
Seamless2,5141,91831%
Welded289480(40%)
Total2,8032,39817%


Tubes12M 202112M 2020Increase/(Decrease)
(Net sales - $ million)   
North America3,240 2,108 54%
South America1,051 660 59%
Europe622 566 10%
Middle East & Africa832 1,194 (30%)
Asia Pacific249 315 (21%)
Total net sales ($ million)5,994 4,844 24%
Operating income (loss) ($ million)613 (616)200%
Operating margin (% of sales)10.2%(12.7%) 

Net sales of tubular products and services increased 24% to $5,994 million in 2021, compared to $4,844 million in 2020, reflecting a 17% increase in volumes and a 6% increase in average selling prices. In North America sales increased 54% as there was a recovery in volumes and prices throughout the region, led by the U.S. onshore market. In South America sales increased 59% driven by a recovery in sales in Argentina and the Andean region partially offset by lower sales of connectors in Brazil. In Europe sales increased 10% thanks to a strong growth in sales to the mechanical and automotive sectors partially compensated by lower sales of OCTG products throughout the region. In the Middle East & Africa sales declined 30% as sales in U.A.E. remained stable during the year while sales of OCTG and offshore line pipe declined in the rest of the region. In Asia Pacific sales declined 21% due to lower sales of OCTG throughout the region.

Operating results from tubular products and services, amounted to a gain of $613 million in 2021, compared to a loss of $616 million in 2020. Tubes operating income in 2021 is net of a $57 million impairment charge on NKKTubes fixed assets and severance charges of $27 million, while in 2020 the operating loss includes an impairment charge of $582 million, accelerated depreciations and amortizations of $56 million and severance charges of $139 million. The improvement in operating results was driven by the recovery in sales (volumes and prices), while an increase in raw material and energy costs was partially offset by an improvement in industrial performance due to the increased levels of activity and utilization of production capacity.

Others12M 202112M 2020Increase/(Decrease)
Net sales ($ million)528 303 74%
Operating income (loss) ($ million)95 (47)300%
Operating margin (% of sales)17.9%(15.6%) 

Net sales of other products and services increased 74% from $303 million in 2020 to $528 million in 2021, mainly due to higher sales of energy and excess raw materials and sucker rods, as well as our new oilfield services business in Argentina which offers hydraulic fracturing and coiled tubing services.

Operating results from other products and services, amounted to a gain of $95 million in 2021, compared to a loss of $47 million in 2020. In 2020, Others operating income included an impairment charge of $40 million. The increase in profitability is mainly due to the sucker rods business, our new oil services business and from the sale of excess raw materials and energy.

Selling, general and administrative expenses, or SG&A, amounted to $1,207 million (18.5% of net sales), compared to $1,119 million (21.7%) in 2020. During 2021 SG&A includes $16 million of leaving indemnities, while in 2020 leaving indemnities were $61 million. The 2021 increase in SG&A is mainly due to higher selling expenses, following the increase in sales.

Impairment charge. In December, 2021, as a result of the expected termination of our NKKTubes joint venture, we recorded a $57 million impairment on its fixed assets. In 2020 we recorded an impairment charge of $622 million on the carrying value of goodwill and other assets in the United States.

Other operating results amounted to a gain of $62 million in 2021, compared to a gain of $19 million in 2020. The gain in 2021 is mainly due to a $36 million recognition of fiscal credits in Brazil and the profit from the sale of assets.

Financial results amounted to a gain of $23 million in 2021, compared to a loss of $65 million in 2020. The variation is mainly explained by a $23 million improvement in net interest income, mainly due to interests from fiscal credits in Brazil received in the second quarter, and a $64 million improvement in net foreign exchange results, mainly related to the depreciation of the Euro, the Brazilian real and the Mexican peso in 2020. These results are to a large extent offset by changes to our currency translation reserve.

Equity in earnings of non-consolidated companies generated a gain of $513 million in 2021, compared to $109 million in 2020. These results were mainly derived from our equity investment in Ternium (NYSE:TX) and Usiminas, and reflect the good dynamics at the flat steel sector derived from record high steel prices.

Income tax charge amounted to $189 million in 2021, compared to $23 million in 2020, reflecting better results in several subsidiaries following the increase in activity in 2021.

Net income amounted to $1,053 million in 2021, compared with a net loss of $642 million in 2020. The change in results reflects the recovery in sales (volumes and prices) following the improvement in the operating environment, while an increase in raw material and energy costs was partially offset by an improvement in industrial performance due to the increased levels of activity and utilization of production capacity. Additionally, our results in 2021 were boosted by an extraordinary contribution from our equity participations, mainly Ternium, reflecting the good dynamics in the flat steel sector derived from record high steel prices, while 2020 was impacted by a $622 million impairment on the carrying value of goodwill and other assets in the United States.

Cash Flow and Liquidity of 2021

Net cash provided by operations in 2021 was $119 million (net of $1.046 million used in working capital), compared to $1,520 million (including $1,059 million working capital reduction) in 2020.

With capital expenditures of $240 million, we had a negative free cash flow of $120 million in 2021, compared to a positive free cash flow of $1,327 million in 2020.

Following dividend payments of $319 million during 2021, we maintained a positive net cash position of $700 million at December 31, 2021.

Conference call

Tenaris will hold a conference call to discuss the above reported results, on February 17, 2022, at 10:00 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 “1560918”. Please dial in 10 minutes before the scheduled start time. The conference call will be also available by webcast at ir.tenaris.com/events-and-presentations.

A replay of the conference call will be available on our webpage ir.tenaris.com/events-and-presentations or by phone from 1:00 pm ET on February 17 through 1:00 pm on February 25, 2022. To access the replay by phone, please dial +1 855 859 2056 or +1 404 537 3406 and enter passcode “1560918” 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 Income Statement

(all amounts in thousands of U.S. dollars)Three-month period ended
December 31,
Twelve-month period
ended December 31,
 2021 2020 2021 2020 
Continuing operations   
Net sales2,057,164 1,130,628 6,521,207 5,146,734 
Cost of sales(1,400,370)(895,457)(4,611,602)(4,087,317)
Gross profit656,794 235,171 1,909,605 1,059,417 
Selling, general and administrative expenses(338,050)(242,137)(1,206,569)(1,119,227)
Impairment Charge(57,075)- (57,075)(622,402)
Other operating income (expense), net11,646 14,351 61,548 19,141 
Operating income (loss)273,315 7,385 707,509 (663,071)
Finance Income5,845 7,814 38,048 18,387 
Finance Cost(6,851)(4,587)(23,677)(27,014)
Other financial results2,591 (17,355)8,295 (56,368)
Income (Loss) before equity in earnings of non-consolidated companies and income tax274,900 (6,743)730,175 (728,066)
Equity in earnings of non-consolidated companies133,482 81,360 512,591 108,799 
Income (loss) before income tax408,382 74,617 1,242,766 (619,267)
Income tax(72,246)34,889 (189,448)(23,150)
Income (loss) for continuing operations336,136 109,506 1,053,318 (642,417)
     
Attributable to:    
Owners of the parent370,034 106,557 1,100,191 (634,418)
Non-controlling interests(33,898)2,949 (46,873)(7,999)
 336,136 109,506 1,053,318 (642,417)

Consolidated Statement of Financial Position

(all amounts in thousands of U.S. dollars)At December 31, 2021 At December 31, 2020
ASSETS      
Non-current assets     
Property, plant and equipment, net5,824,801  6,193,181 
Intangible assets, net1,372,176  1,429,056 
Right-of-use assets, net108,738  241,953 
Investments in non-consolidated companies1,383,774  957,352 
Other investments320,254  247,082 
Derivative financial instruments7,080  - 
Deferred tax assets245,547  205,590 
Receivables, net205,8889,468,258 154,3039,428,517
Current assets     
Inventories, net2,672,593  1,636,673 
Receivables and prepayments, net96,276  77,849 
Current tax assets193,021  136,384 
Trade receivables, net1,299,072  968,148 
Derivative financial instruments4,235  11,449 
Other investments397,849  872,488 
Cash and cash equivalents318,1274,981,173 584,6814,287,672
Total assets 14,449,431   13,716,189
EQUITY      
Capital and reserves attributable to owners of the parent 11,960,578  11,262,888
Non-controlling interests 145,124  183,585
Total equity 12,105,702   11,446,473
LIABILITIES      
Non-current liabilities     
Borrowings111,432  315,739 
Lease liabilities82,694  213,848 
Deferred tax liabilities274,721  254,801 
Other liabilities231,681  245,635 
Provisions83,556784,084 73,2181,103,241
Current liabilities     
Borrowings219,501  303,268 
Lease liabilities34,591  43,495 
Derivative financial instruments11,328  3,217 
Current tax liabilities143,486  90,593 
Other liabilities203,725  202,826 
Provisions9,322  12,279 
Customer advances92,436  48,692 
Trade payables845,2561,559,645 462,1051,166,475
Total liabilities 2,343,729   2,269,716
Total equity and liabilities 14,449,431   13,716,189


Consolidated Statement of Cash Flows

  Three-month period
ended December 31,
Twelve-month period
ended December 31,
(all amounts in thousands of U.S. dollars) 2021 2020 2021 2020 
Cash flows from operating activities     
Income (loss) for the period 336,136 109,506 1,053,318 (642,417)
Adjustments for:     
Depreciation and amortization 152,160 185,024 594,721 678,806 
Impairment charge 57,075 - 57,075 622,402 
Income tax accruals less payments 23,972 (59,631)35,602 (117,214)
Equity in earnings of non-consolidated companies (133,482)(81,360)(512,591)(108,799)
Interest accruals less payments, net 1,174 (2,080)(11,363)(538)
Changes in provisions (6,835)(3,192)7,381 (13,175)
Result of sale of subsidiaries (6,768)- (6,768)- 
Changes in working capital (373,195)(38,074)(1,045,907)1,059,135 
Currency translation adjustment and others (4,207)29,261 (52,393)42,183 
Net cash provided by operating activities 46,030 139,454 119,075 1,520,383 
      
Cash flows from investing activities     
Capital expenditures (68,647)(38,166)(239,518)(193,322)
Changes in advance to suppliers of property, plant and equipment (655)(1,857)(5,075)(1,031)
Proceeds from sale of subsidiaries, net of cash 24,332 - 24,332 - 
Acquisition of subsidiaries, net of cash acquired - - - (1,025,367)
Investment in companies under cost method - - (692)- 
Proceeds from disposal of property, plant and equipment and intangible assets 8,380 2,710 22,735 14,394 
Dividends received from non-consolidated companies 26,798 - 75,929 278 
Changes in investments in securities 111,763 (323,988)390,186 (887,216)
Net cash provided (used in) by investing activities  101,971 (361,301)267,897 (2,092,264)
      
Cash flows from financing activities     
Dividends paid (153,469)(82,637)(318,744)(82,637)
Dividends paid to non-controlling interest in subsidiaries - (5,301)(3,355)(5,301)
Changes in non-controlling interests - - - 2 
Payments of lease liabilities (10,252)(12,740)(48,473)(48,553)
Proceeds from borrowings 267,970 99,804 843,668 658,156 
Repayments of borrowings (446,728)(198,834)(1,121,053)(896,986)
Net cash used in financing activities (342,479)(199,707)(647,957)(375,319)
      
Decrease in cash and cash equivalents (194,478)(421,554)(260,985)(947,200)
Movement in cash and cash equivalents     
At the beginning of the year 513,665 1,004,398 584,583 1,554,275 
Effect of exchange rate changes (1,120)1,739 (5,531)(22,492)
Decrease in cash and cash equivalents (194,478)(421,554)(260,985)(947,200)
At December 31, 318,067 584,583 318,067 584,583 

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).

(all amounts in thousands of U.S. dollars)Three-month period ended
December 31,
Twelve-month period ended
December 31,
 2021202020212020 
Operating income (Loss)273,3157,385707,509(663,071)
Depreciation and amortization152,160185,024594,721678,806 
Impairment57,075-57,075622,402 
EBITDA482,550192,4091,359,305638,137 

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 December 31,
 2021 2020 
Cash and cash equivalents318,127 584,681 
Other current investments397,849 872,488 
Non-current investments312,619 239,422 
Derivatives hedging borrowings and investments2,325 7,869 
Current Borrowings(219,501)(303,268)
Non-current borrowings(111,432)(315,739)
Net cash / (debt)699,987 1,085,453 

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
December 31,
Twelve-month period ended
December 31,
 2021 2020 2021 2020 
Net cash provided by operating activities46,030 139,454 119,075 1,520,383 
Capital expenditures(68,647)(38,166)(239,518)(193,322)
Free cash flow(22,617)101,288 (120,443)1,327,061 

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