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Note 11 - Investments in Non-consolidated Companies | 12 Months Ended
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Dec. 31, 2018
Statement Line Items [Line Items] |
Disclosure of interests in other entities [text block] |
| 11 | Investments in non-consolidated companies
|  | Year ended December 31, |
|  | 2018 |  |  | 2017 |
At the beginning of the year |  |  | 640,294 |  |  |  | 557,031 |
Translation differences |  |  | 1,848 |  |  |  | (9,548 | )
Equity in earnings of non-consolidated companies |  |  | 193,994 |  |  |  | 116,140 |
Dividends and distributions received (*) |  |  | (26,581 | ) |  |  | (22,971 | )
Decrease / increase in equity reserves and others |  |  | (3,987 | ) |  |  | (358 | )
At the end of the year |  |  | 805,568 |  |  |  | 640,294 |
(*)Related to Ternium and Usiminas of which 25.7 were collected during the year. The principal non-consolidated companies are:
|  |  |  | % ownership at December 31, |  | Value at December 31, |
Company |  | Country of incorporation |  | 2018 |  | 2017 |  | 2018 |  |  | 2017 |
a) Ternium (*) |  | Luxembourg |  | 11.46% |  | 11.46% |  |  | 725,548 |  |  |  | 563,735 |
b) Usiminas (**) |  | Brazil |  | 3.07% |  | 3.08% |  |  | 72,988 |  |  |  | 70,642 |
Others |  | - |  | - |  | - |  |  | 7,032 |  |  |  | 5,917 |
|  |  |  |  |  |  |  |  | 805,568 |  |  |  | 640,294 |
(*) Including treasury shares. (**)At December 31, 2018 and 2017 the voting rights were 5.2%. a) Ternium Ternium, is a steel producer with production facilities in Mexico, Argentina, Brazil, Colombia, United States and Guatemala and is one of Tenaris’s main suppliers of round steel bars and flat steel products for its pipes business. At December 31, 2018, the closing price of Ternium’s ADSs as quoted on the New York Stock Exchange was $27.1 per ADS, giving Tenaris’s ownership stake a market value of approximately $622.5 million. At December 31, 2018, the carrying value of Tenaris’s ownership stake in Ternium, based on Ternium’s IFRS Financial Statements, was approximately $725.5 million. As of December 31, 2018 the Company concluded that the carrying amount does not exceed the recoverable value of the investment. Summarized selected financial information of Ternium, including the aggregated amounts of assets, liabilities, revenues and profit or loss is as follows:
|  | Ternium |
|  | 2018 |  |  | 2017 |
Non-current assets |  |  | 8,121,824 |  |  |  | 7,727,283 |
Current assets |  |  | 4,426,038 |  |  |  | 4,395,283 |
Total assets |  |  | 12,547,862 |  |  |  | 12,122,566 |
Non-current liabilities |  |  | 3,236,756 |  |  |  | 3,442,521 |
Current liabilities |  |  | 1,826,530 |  |  |  | 2,827,275 |
Total liabilities |  |  | 5,063,286 |  |  |  | 6,269,796 |
Non-controlling interests |  |  | 1,091,321 |  |  |  | 842,347 |
Revenues |  |  | 11,454,807 |  |  |  | 9,700,296 |
Gross profit |  |  | 2,971,479 |  |  |  | 2,297,271 |
Net income for the year attributable to owners of the parent |  |  | 1,506,647 |  |  |  | 886,219 |
Total comprehensive income for the year, net of tax, attributable to owners of the parent |  |  | 1,176,964 |  |  |  | 815,434 |
| 11 | Investments in non-consolidated companies (Cont.)
b) Usiminas Usiminas is a Brazilian producer of high quality flat steel products used in the energy, automotive and other industries. As of December 31, 2018, the closing price of the Usiminas’ ordinary and preferred shares, as quoted on the B3 - Brasil Bolsa Balcão S.A, was BRL11.44 ( $2.95 ) and BRL9.22 ( $2.38 ), respectively, giving Tenaris’s ownership stake a market value of approximately $110.8 million. As that date, the carrying value of Tenaris’s ownership stake in Usiminas was approximately $73 million. Summarized selected financial information of Usiminas, including the aggregated amounts of assets, liabilities, revenues and profit or loss is as follows:
|  | Usiminas |
|  | 2018 |  |  | 2017 |
Non-current assets |  |  | 4,696,896 |  |  |  | 5,661,947 |
Current assets |  |  | 2,148,322 |  |  |  | 2,193,096 |
Total assets |  |  | 6,845,218 |  |  |  | 7,855,043 |
Non-current liabilities |  |  | 1,933,207 |  |  |  | 2,344,042 |
Current liabilities |  |  | 860,862 |  |  |  | 920,924 |
Total liabilities |  |  | 2,794,069 |  |  |  | 3,264,966 |
Non-controlling interests |  |  | 369,333 |  |  |  | 425,988 |
Revenues |  |  | 3,766,241 |  |  |  | 3,367,937 |
Gross profit |  |  | 612,156 |  |  |  | 513,712 |
Net income for the year attributable to owners of the parent |  |  | 194,381 |  |  |  | 74,019 |
c) Techgen Techgen is a Mexican company that operates a natural gas-fired combined cycle electric power plant in the Pesquería area of the State of Nuevo León, Mexico. The company started producing energy on December 1, 2016 and has a power capacity of 900 megawatts. As of December 31, 2018, Tenaris held 22% of Techgen’s share capital, and its affiliates, Ternium and Tecpetrol International S.A. (a wholly-owned subsidiary of San Faustin S.A., the controlling shareholder of both Tenaris and Ternium), held 48% and 30% respectively. Techgen is a party to transportation capacity agreements for a purchasing capacity of 150,000 MMBtu/Gas per day starting on August 1, 2016 and ending on July 31, 2036, and a party to a contract for the purchase of power generation equipment and other services related to the equipment. As of December 31, 2018, Tenaris’s exposure under these agreements amounted to $55.1 million and $1.8 million respectively. Furthermore, during the quarter, Techgen entered a contract for the purchase of clean energy certificates. As of December 31, 2018 Tenaris’s exposure under this agreement amounted to $17.1 million. Tenaris issued a corporate guarantee covering 22% of the obligations of Techgen under a syndicated loan agreement between Techgen and several banks, which was used in the construction of the facility. The main covenants under the corporate guarantee are Tenaris’s commitment to maintain its participation in Techgen or the right to purchase at least 22% of Techgen’s firm energy, and compliance with a maximum permitted leverage ratio. As of December 31, 2018, the amount outstanding under the loan agreement was $600 million and, as a result, the amount guaranteed by Tenaris was approximately $132 million. For a description of the recently agreed-upon refinancing of the syndicated loan agreement and the release of Tenaris’s corporate guarantee, see “Subsequent events – Techgen refinancing.” During 2018 the shareholders of Techgen made additional investments, in Techgen, in form of subordinated loans, which in case of Tenaris amounted to $14.7 million. In the same period, there were repayments of these loans for $9.4 million. As of December 31, 2018, the aggregate outstanding principal amount under these loans was $98.6 million.

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