Tenaris Q2 income up 42% to US$127mn

Luxembourg-based steel tube group Tenaris (NYSE: TS) reported US$127mn in net income second quarter this year, up 42.0% from same period last year, as seamless pipe sales grew in Argentina, Mexico and Venezuela. Net sales grew 14.7% during the quarter to US$997mn and operating income was up 36.7% to US$154mn, the company said in a statement. Total steel pipe sales grew 4% to 769,000t, with North America up 32% to 194,000t and South America up 21% to 92,000t. The company's seamless pipes sales grew 25% to US$798mn while welded pipes dropped 24% to US$89.8mn. Raw material costs for steelmaking "surged" first quarter this year but fell back "briefly" during the second quarter. Prices are now rising again and will likely impact production costs for the remainder of 2004, Tenaris said. "For the rest of the year, demand for our seamless pipes is expected to remain favorable but will be affected by seasonal factors and sales volumes, on a comparable basis, are unlikely to match those of the first half," the company said. Argentina's Techint group owns 60% of Tenaris, which has annual production capacity of 3Mt of seamless and 850,000t of welded pipes. It makes seamless steel tubes at Algoma (Canada), Dalmine (Italy), NKKTubes (Japan), Siderca (Argentina), Tamsa (Mexico) and Tavsa (Venezuela). Tenaris' welded pipes are produced at Confab (Brazil) and Siat (Argentina).