PRESS RELEASE

Llodio, 12 November 2008

TUBACEX, the world’s second largest seamless stainless steel tube manufacturer, obtained consolidated net profits of 37.16 million euros between January and September 2008, which means a decrease of 11.9% over the figure obtained in the same period in 2007, 42.18 million euros, according to the information sent by the company to the Spanish National Stock Market Commission (Comisión Nacional del Mercado de Valores - CNMV).

TUBACEX places a very positive evaluation on these results, achieved in a business environment strongly conditioned by the important drop in the price of raw materials, especially nickel.

The gross operating profit (EBITDA) to September stood at 71.25 million euros, 10.7% lower than in 2007, while the operating profit (EBIT) decreased by 12.7% to 58.89 million euros.

Today, external constraints arising out of the general economic crisis that have an important effect on key factors such as the price of oil, the extreme volatility of raw materials or the very operation of the financial credit markets do not and will not mean any problem in the implementation of the investment plans foreseen by the Group, and there is absolute confidence in their successful implementation and development.   
TUBACEX maintains very positive medium- and long-term business prospects, based on a substantial order book (which covers a significant part of 2009), the operational improvements carried out throughout the Group and in important investment projects, already in progress, in the entire oil value chain, as well as in the energy and petrochemical sectors. 

The consolidated sales between January and September amounted to 500.26 million euros, representing a decrease of 4.7% compared to the same period in 2007.

 

PRESS RELEASE

Llodio, 29 September 2008

TUBACEX, the world’s second largest seamless stainless steel tube manufacturer, has bought back 930,171 of the Company’s shares during the present month of September, representing 0.7% of the Company’s share capital, according to the information sent by the Company to the Spanish National Stock Market Commission (Comisión Nacional del Mercado de Valores - CNMV).

The average price per share was 4.689 euros and the total amount paid out was 4.4 million euros.

By doing this, TUBACEX wishes to convey to investors and shareholders its total commitment and confidence in the long-term project it is designing with its new Strategic Plan, whose purpose is to consolidate its leading position in the seamless stainless steel tube sector and become the world’s leading manufacturer. 
 
Including the recently acquired shares, TUBACEX now holds a treasury stock of 2,845,477 shares, accounting for 2.14% of its share capital.

Finally, TUBACEX wishes to highlight that it will continue with these and other measures that it considers appropriate to support its firm commitment to the long-term project that the Company is implementing and to creating value for its shareholders.

 

PRESS RELEASE

There are important oil and gas deposits and reserves in the area

*Significant investment projects are taking place in these countries in the oil, gas, chemical, petrochemical and nuclear sectors

Llodio, 17 September 2008

TUBACEX, the world’s second largest seamless stainless steel tube manufacturer, has opened a new sales office in Moscow, staffed by its own personnel, with the aim of increasing the industrial Group’s activity in Russia and in the countries that make up the Commonwealth of Independent States (CIS).

The new sales office, which is called TUBACEX CIS, will be responsible for coordinating the Group’s sales network in the said area, where there are several countries with significant deposits and substantial reserves of oil and gas. To this effect, it must be emphasised that 40% of the world’s natural gas reserves are concentrated in these countries. In addition to Russia, the CIS is made up of Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Uzbekistan and Ukraine. The Moscow office will also coordinate sales activity in Estonia, Latvia and Lithuania, which are European Union member states.

With this new sales office, TUBACEX will improve its attention to current customers in CIS countries, enable it to be closer to new customers and take advantage of the expected good growth prospects in demand for tubes, because important oil and gas resources are being exploited in the area, significant investment programmes are taking place in these sectors and also in the chemical, petrochemical and energy, including nuclear sectors, and their economies have recorded very important growth rates in recent years.
 
In order to attend to this growing demand, with its new Strategic Plan 2008-2012, which the Company is already implementing, TUBACEX is developing production capabilities in those segments which involve a higher level of specialisation and added value within the oil, gas and energy sectors in which greatest growth is expected, as well as in oil and gas exploration and extraction in difficult conditions (offshore and deep water), power generation in plants using new technology and nuclear energy. The Plan foresees investments for the value of 150 million euros in the next five years.

Moreover, the commercial aspects of the Plan include reinforcing the Group’s presence in those areas where higher growth in demand for tubes is expected in coming years. To this effect, in recent years TUBACEX has opened sales offices in Shanghai (2005), Brazil (2006), Dubai (2007) and now Moscow.

The TUBACEX Group has seamless stainless steel tube manufacturing plants in Spain, Austria and the U.S.A., as well as a worldwide sales network. With the new office now open in Moscow, the Company has a total of fourteen sales offices in thirteen countries and also has exclusive sales agents in another thirty countries spread throughout the world, thereby providing a response to the internationalisation process initiated several years ago, which has enabled the company to become the second largest seamless stainless steel tube manufacturer in the world.

 

PRESS RELEASE

Tubacex’s new Strategic Plan 2008-2012 envisages 150 million euros in investments

Llodio, 29 July 2008

TUBACEX, the world’s second largest seamless stainless steel tube manufacturer, is already working on its new Strategic Plan, which will take in the period up to and including 2012. Some of the Plan’s main courses of action were announced at the last Annual General meeting of Shareholders. This Plan envisages investments for the amount of 150 million euros over the next five years and seeks to increase the Company’s current operating profitability levels by 80% by the end of this period.

The goal of the Group’s new Strategic Plan is to consolidate its leadership position in the seamless stainless steel tube sector and become the world’s largest manufacturer of these items. To achieve this, TUBACEX is developing production capabilities in those segments which involve a higher level of specialisation and added value within the oil, gas and energy sectors in which highest growth is expected, as well as in oil and gas exploration and extraction in critical conditions (offshore and deep water), power generation in plants using new technology and nuclear energy. The new Plan contemplates inorganic growth projects outside the current geographical production area (Europe and the U.S.A.).

In the first half of 2008, TUBACEX has obtained a consolidated net profit of 28 million euros, as the Company has disclosed in its information sent to the Spanish National Stock Market Commission (Comisión Nacional del Mercado de Valores - CNMV). This figure represents a reduction of 7% compared to the net profit obtained in the first half of 2007, a period characterised by an extraordinary increase in the nickel price. It also represents, however, an increase of 6% over the net profit obtained in the second half of 2007.

TUBACEX places a very positive evaluation on these figures, obtained in a period affected by the consequences of the transport strike on invoicing in June, fewer days of industrial activity than in the same period of 2007, the strong correction experienced in the price of nickel (an average of 39% lower than in the same period in 2007) and the noticeable slowdown due to the strength of the euro against the US dollar.

Consolidated sales between January and June amounted to 355.9 million euros, representing a decrease of 3.2% over the first half of 2007, when the figure achieved was 367.5 million euros.

The gross operating profit (EBITDA) to June stood at 54.2 million euros, 7.9% lower than in 2007, while the operating profit (EBIT) decreased by 9.7% to 45.2 million euros.

In this current difficult macroeconomic scenario, the Company’s fundamental factors remain solid and the forecasts for financial year 2008 as a whole are very positive, in view of the very strong world demand for seamless stainless steel tubes, the major operating improvements implemented in all the Group and the volume and quality of the current order book.

 

				2008	2007		% 2008/2007
Sales				355.86	367.49		-3.2%
Gross operating profit (EBITDA)				54.23	58.91		-7.9%
Operating profit (EBIT)				45.19	50.05		-9.7%
Net profit				27.97	30.20		-7.4%

Figures in millions of euros. Unaudited provisional data.

PRESS RELEASE

The biggest dividend ever paid out in the Company’s history

Llodio, 26 June 2008

TUBACEX, the world’s second largest seamless stainless steel tube manufacturer, is to pay its shareholders a dividend of 0.1513 euros gross per share on 15 July next, to be drawn from profits obtained in fiscal year 2007.

Payment of this dividend, which is to be carried out through the Banco Santander S.A., was approved at the Annual General Meeting of Shareholders of the company held on 22 May last.

The total amount of this dividend is 19.83 million euros and represents a pay-out of 35% of the net profits obtained in financial year 2007, which totalled 56.66 million euros. This is the biggest dividend ever paid by TUBACEX to its shareholders and represents an increase of 60.2% over the dividend paid out last year.

 

PRESS RELEASE

12.5% Increase

Llodio, 22 May 2007

The Ordinary General Meeting of Shareholders of TUBACEX, meeting today at the Company headquarters in the locality of Llodio, Álava, Spain, has approved the distribution of a dividend for an amount of 0.1513 euros gross per share, to be paid out of the profits of financial year 2007.

TUBACEX, the world’s second largest seamless stainless steel tube manufacturer, will allocate a total of 19.83 million euros to paying out this dividend, a dividend payout of 35% of net profits for 2007, which totalled 56.66 million euros.

This is the largest dividend paid by TUBACEX to its shareholders and represents an increase of 60.2% over the dividend paid out last year.

 

The AGM also approved the appointment of Juan José Iribecampos Zubia to the board, as a proprietary director, at the proposal of Bagoeta, S.L.

Moreover, the Meeting agreed to re-appoint KPMG Auditores S.L. for a further year as approved auditor of TUBACEX S.A. and its consolidated Group.

 

The AGM also approved the setting up of a long-term variable remuneration system, in company shares, aimed at executives of TUBACEX, S.A and its group of companies.

 

With regard to financial year 2007, whose annual accounts have been approved today by the General Meeting of Shareholders, Álvaro Videgain, President of TUBACEX, described it as excellent because the Company’s figures for production, sales and profits all set new records. Factors which have contributed to this situation have been, on the one hand, the positive circumstances of the world economy and, on the other hand, the activation of investment projects in the oil and gas, petrochemical, chemical and energy sectors, the main buyers of the products manufactured by the Company, seamless stainless steel tubes.

Consequently, consolidated sales rose to 696.73 million euros, a figure 29.2% higher than in the preceding financial period. The performance on the European market must be highlighted, because turnover growth was 39.8% higher than the previous year, and also North America, where sales grew by 12.6%, in spite of the strength of the euro against the dollar penalising the sales of European exporters.

The gross operating profit reached 106.17 million euros, representing growth of 65.8%.

The consolidated net profit reached 56.66 million euros, which means an increase of 83.1% with regard to the profit obtained the previous year.

 

During 2007 TUBACEX made investments for the amount of 18.37 million euros in its different subsidiaries, a figure 62% higher than the investments undertaken in 2006, when investments totalled 11.34 million euros.
 
The Group continues to implement a rigorous policy of investment selection, based on exhaustive analysis as regards expected profitability. The aims of investments are still to achieve continuous improvement in the competitive position, as well as adaptation to current and future market conditions.

In the 1998-2007 period, TUBACEX has invested a total of 124.95 million euros in extending and improving its factory facilities, which means an average annual investment of 12.5 million euros.

Among the investments carried out in financial year 2007 we can highlight the ones made in TTI to improve the cold rolling and finishing facilities, to optimise the layout of the Amurrio plant and to increase the finished product warehousing facilities. A new crane was installed in Acerálava to transport steel from the casting furnace.
 
The other investments, carried out in other Group subsidiaries, are allocated to different improvements related with the efficiency of key facilities in the manufacturing process of the different plants, to the maintenance and replacement of industrial equipment, to improving quality, to increasing the added value of products and to respecting the environment.

 

Application of the Competitiveness Scheme that TUBACEX has been implementing in recent years has played a determining role in achieving these positive results on the financial period. The purpose of this Scheme is to capitalise on industrial synergies and maximise the economies of scale deriving from the Group’s industrial configuration, with the aim of improving operating margins and achieving a differentiated competitive position in productivity and costs.

Through implementation of the Scheme in 2007, important increases have been obtained in the competitiveness of key facilities in the Group’s manufacturing process. Standing out among these have been the increase in production of the steel mill, the improvement in the productivity of the extrusion presses and of the cold rolling of tubes, as well as the reduction of maintenance costs. These processes will continue to be implemented throughout 2008.

 

Moreover, development of the Strategic Plan that defines the business project of TUBACEX up to a time horizon of 2010 continued throughout the financial year. The purpose of this Plan is to guarantee future growth and profitability and to convert the Company into the leading seamless stainless steel tube manufacturer in the world.

The Plan is committed to profitable organic growth, minimises investment requirements and maximises value creation for shareholders.

In addition, the Plan is driving the growth of the company through optimising use of the capabilities of the current production structure and by means of the quest for commercial excellence, affecting consolidation of the position of leadership and profitability in Europe, growth in traditional areas such as the U.S.A., as well as in those areas where a greater increase in the demand for tubes is taking place, such as in the case of Asia. Plant specialisation, cost reduction, the manufacture of new products and steels, applications with higher added value, together with excellence in customer service, are all other aspects to be emphasised among the aims of the Strategic Plan.

 

A considerable part of the strategic approaches of this Plan, especially those of a financial nature, have already been achieved and even surpassed throughout 2007, leading the Company to decide to promote a new strategic reflection process with a 2012 time frame.

To this effect it must be pointed out that between 2003 and 2007 the consolidated sales almost tripled, as against a growth forecast in the Plan of 65%, while EBITDA increased fourfold, compared to a growth forecast of 125%.

Álvaro Videgain pointed out to the shareholders that this new Plan is going to affect the development and manufacture of products with high economic and technological value in order to meet the growing demand from the oil and energy sectors -in which TUBACEX aims to be positioned as a world reference-, as well as to place the Company as a leading supplier in the nuclear market.

The Plan also foresees continued profitable growth in the current product segments, strengthening its presence in Asia and exploring all market possibilities, which include possible acquisitions in geographical areas and in the key processes in the value chain.

The President of TUBACEX added that this is an ambitious plan, which will entail new investments and whose aim is “to situate us as number one in the world and significantly raise the value of the Company”.

 

As regards the current financial year, Álvaro Videgain told the AGM that 2008 “is also going to be a good financial year”, in which sales and profits figures will again be beaten, because “our sector is still benefiting from the important investments being carried out in the entire oil value chain”, brought about by the high prices being paid for crude, and also in the energy and petrochemical sectors.

The months of the financial year which have already lapsed are confirming this positive market situation. In the first quarter, sales have increased by 3.3% to reach 178.10 million euros, while net profit has risen to 13.89 million euros, making it 12.5% higher than in the first quarter of 2007.

 

				2007	2006		2005	2004	2003
Sales				696,73	539,07		430,50	347,45	258,92
Gross operating profit (EBITDA)				106,17	64,03		52,65	40,14	23,07
Operating profit (EBIT)				89,47	47,29		37,00	25,06	10,20
Net profit				56,66	30,95		25,42	15,38	6,04
Net cash flow				73,35	47,69		41,06	30,46	21,13
Total assets				603,08	539,62		456,93	388,87	341,24
Net worth				265,85	225,22		206,02	186,82	173,93
Financial debts				202,79	197,35		147,33	115,63	101,58
Financial profit				(12,26)	(6,11)		(3,82)	(5,30)	(3,24)
Share capital				59,84	59,84		59,84	59,84	59,84
Operating profit / sales (%)				12,84	8,77		8,59	7,21	3,94
Net profit / sales (%)				8,13	5,74		5,90	4,43	2,33
EBITDA / sales (%)				15,24	11,88		12,23	11,55	8,91
Profit / equity (ROE) (%)				21,31	13,74		12,34	8,23	3,47
Profit / assets (ROA) (%)				9,40	5,74		5,56	3,96	1,77
Profits per share (PPS) in euros				0,426	0,233		0,191	0,116	0,045
Cash flow / share (CFPS) in euros				0,552	0,359		0,309	0,229	0,159
Book value /share in euros				2,00	1,69		1,55	1,40	1,31
Dividend (in euros per share)				0,094	0,078		0,052	0,018	0,043
Market capitalisation				888,30	656,92		476,06	251,33	188,83
Price / book value (times)				3,34	2,92		2,31	1,35	1,09
PER (times)				15,68	21,23		18,73	16,34	31,26
EV/EBITDA (times) (1)				10,03	12,93		11,44	8,85	12,00
Average workforce				1.909	1.771		1.628	1.517	1.485
Employees in Spain				1.206	1.093		963	904	871
Employees abroad				703	678		665	613	614

Figures in millions of euros. ( ) Negative balances and figures. (1) Market capitalisation plus net financial debt / EBITDA.

PRESS RELEASE

12.5% Increase

Llodio, 8 May 2008

TUBACEX, the world’s second largest seamless stainless steel tube manufacturer, obtained consolidated net profits of 13.89 million euros during the first quarter of 2008, according to the information sent by the company to the Spanish National Stock Market Commission (Comisión Nacional del Mercado de Valores - CNMV).

This figure represents an increase of 12.5% with regard to the net profits obtained in the same period of 2007, when this figure was 12.35 million euros.

Consolidated sales between January and March amounted to 178.10 million euros, representing an increase of 3.3% over the preceding year, when the figure achieved was 172.34 million euros.

The gross operating profit (EBITDA) to March stood at 27.55 million euros, 4.5% higher than in 2007, while the operating profit (EBIT) grew by 5.3% to reach 23.01 million euros.

TUBACEX places a very positive evaluation on these results, which demonstrate the strength of world demand for seamless stainless steel tubes, driven by current and forecast investments in the entire oil value chain, as well as in the energy and petrochemical sectors. This dynamic market situation, together with the important improvements in productivity, industrial specialisation and competitiveness carried out in all the Group, leads to very positive prospects for financial year 2008 as a whole, when new profits records are expected to be reached.

The Annual General Meeting of Shareholders is to be held in Llodio on 22 May next.

 

				2008	2007		%2008/2007
SALES				178.10	172.34		+3.3%
GROSS OPERATING PROFIT (EBITDA)				27.55	26.35		+4.5%
OPERATING PROFIT (EBIT)				23.01	21.85		+5.3%
NET PROFIT				13.89	12.35		+12.5%

Figures in millions of euros