Tenaris Announces 2006 Second Quarter Results

Business Wire, August 3, 2006

LUXEMBOURG -- The financial and operational information contained in this press release is based on consolidated condensed interim financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and presented in U.S. dollars.

Tenaris S.A. (NYSE:TS) (BCBA:TS) (BMV:TS) (BI:TEN) ("Tenaris") today announced its results for the second quarter ended June 30, 2006 with comparison to its results for the second quarter ended June 30, 2005.

Summary of 2006 Second Quarter Results

(Comparison with first quarter of 2006 and second quarter of 2005)

                                   Q2 2006    Q1 2006      Q2 2005
Net sales (US$ million)            1,962.3  1,783.2  10% 1,744.3  12%
Operating income (US$ million)       692.8    600.9  15%   490.6  41%
Net income (US$ million)(1)          495.8    441.7  12%   341.6  45%
Shareholders' net income (US$
 million)                            471.8    419.7  12%   313.5  51%
Earnings per ADS (US$)(2)             0.80     0.71  12%    0.53  51%
Earnings per share (US$)              0.40     0.36  12%    0.27  51%
EBITDA (US$ million)                 747.9    655.6  14%   542.4  38%
EBITDA margin (% of net sales)          38%      37%          31%

(1) As required by IAS 1 (revised) as from January 1, 2005 the income
    for the period disclosed in the income statement does not show
    minority interest. Earnings per share continue to be calculated on
    the net income attributable solely to the equity holders of
    Tenaris.

(2) As of April 26, 2006, the ratio of ADSs to ordinary shares was
    changed from 1:10 to 1:2. Earnings per ADS are stated using the
    new ratio.

Our results continue to benefit from strong global demand from the energy industry for our OCTG and other seamless pipe products. Seamless pipe shipments and production were at record highs and reflected incremental improvements in our industrial and supply chain management performance. Higher sales to the Middle East and Africa, which represented 27% of our total seamless pipe sales by volume during the quarter, compensated for lower sales in North America and reflected our strong global positioning as well as the strength of oil and gas investment activity in the region. Net sales, operating income and EBITDA all increased to record levels. Net cash provided by operations, following the payment of income taxes and an increase in working capital associated with higher net sales, was US$170.0 million and our net cash position declined following the payment of a dividend and an increase in capital expenditure.

Market Background and Outlook

Oil and gas companies continue to increase their exploration and production spending in response to sustained high oil and gas prices, declining production at mature fields and projected increases in global demand for oil and gas. This is resulting in increased drilling activity and demand for our seamless OCTG products. The international count of active drilling rigs, as published by Baker Hughes excluding, for comparative purposes, the rig count in Iran and Sudan, averaged 913 during the second quarter of 2006, an increase of 6% compared to the same quarter of the previous year and an increase of 2% compared to the first quarter. The corresponding percentage year on year quarterly rig count increases in the Canadian and U.S. markets, which are more sensitive to natural gas prices, were 17% and 22% respectively.

Favorable market conditions, including relatively stable prices for our raw materials, and strong demand for our high-end seamless pipe products are helping us to record year on year sales growth and improvements in gross margins for our seamless pipe products. We expect these favorable market conditions to continue throughout the remainder of the year.

Demand for our welded pipe products, however, is being affected by delays to gas pipeline projects in Brazil and Argentina. During the second quarter we increased sales to export projects but we expect that demand for our welded pipe products in Brazil and Argentina will continue to be affected by delays to major gas pipeline projects.

Agreement to Acquire Maverick

On June 12, 2006, we entered into a merger agreement pursuant to which we will acquire Maverick Tube Corporation, a leading North American producer of welded OCTG, line pipe and coiled tubing for use in oil and natural gas wells. Maverick has manufacturing facilities in the United States, Canada and Colombia and, in 2005, shipped approximately 1.3 million short tons of welded pipes. The transaction is valued at US$3,185 million, including Maverick's net debt, based on the assumption that the holders of Maverick's convertible notes elect to exercise their conversion rights pursuant to their applicable terms and conditions. We expect to finance the Maverick acquisition mainly through debt and have secured commitments to borrow up to US$2.7 billion.

The transaction has recently received clearances from the Canadian and U.S. competition authorities. Closing, however, remains subject to certain other regulatory approvals, majority approval of Maverick's shareholders and other customary conditions and is expected to occur around the beginning of the fourth quarter.