Good day, ladies and gentlemen. And welcome to the Fourth Quarter 2013 Tenaris SA Earnings Conference Call. My name is Jornada, and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I will now like to turn the conference over to Mr. Giovanni Sardagna, Investor Relations Director. Please proceed.

Thank you, Jornada. And welcome to Tenaris 2013 fourth quarter and annual results conference call. Before we start, I would like to remind you that we will be discussing forward-looking information in the call and that our actual results may vary from those expressed or implied herein. Factors that could affect those results include those mentioned in the company 20-F and other documents filed with the SEC. With me on the call today are Paolo Rocca, our Chairman and CEO; Guillermo Vogel, Vice President of Finance and member of our Board of Director; Edgardo Carlos, our CFO; German Cura, Managing Director of our North American Operation; and Gabriel Podskubka, our Eastern Hemisphere Managing Director. Before passing over the call Paolo for his opening remarks, I would like to briefly comment our quarterly results. During the fourth quarter of 2013 sales reached almost $2.7 billion, down 3% versus the corresponding quarter of the previous year, but up 11% sequentially. Mainly thanks to unexceptional level of sales in the Middle East and for sub-Saharan Africa deepwater projects. Our EBITDA reached $745 million, which was 2% higher than the corresponding quarter of 2012 and 20% higher sequentially. Our EBITDA margin up almost 28% was 2 percentage points higher sequentially due to a rich mix of high end value premium products and efficiency improvements. Average selling prices in our two operating segments were 3% compared to corresponding quarter of last and 2% sequentially. During the quarter, our sales of high end seamless products were at 62% of our total seamless volume. During the fourth quarter, our net cash position increased by $125 million, to end the year up over $900 million, following investment of $184 million in capital expenditure and payment of interim dividend to shareholders of $163 million. Now I will ask Paolo to say a few words before opening the call to questions.

Thank you, Giovanni, and good morning to all of you. I consider that Tenaris had a good year in 2013, achieving important progress in many areas. I will start with safety, our Safe Hour program continued to deliver improvement in our indicator. Over the past three years the rate of accident resulted in injuries has declined over 40% and we still consider that we have wide room for improvement. Safety is an essential element of our competitor’s determination in the eyes of our customers, of our worker and the communities which we operate. Let me now turn to our financial results for the year. We maintained our EBITDA and our industry leading margin in line with those of the previous year. Despite a slowdown in a North American markets and decline in prices for our less differentiated products. These four months was driven by transformation in our product mix towards the high value premium OCTG product, our positioning in Eastern Hemisphere and the performance of our industrial system. Earning per share declined 9% affected by higher tax charges relating to our operation in Argentina and Mexico. During the year we generated $2.4 billion of operating cash, resulting in net cash position at the end of the year above $900 million. We are proposing to maintain for this year the annual dividend at last year level. Sales of our premium connection product continued to rise strongly, 17% year-on-year by volume and our Dopeless technology continues to penetrate new markets and grew 24% again year-on-year. We strengthen our premium connection portfolio with introduction of new product for the most complex deepwater and high pressure, high temperature applications. This month our new BlueDock connector for conductor and surface casing were successfully run by Petrobras in offshore well with excellent results. Our operation in…

(Operator Instructions) Your first question comes from the line of Ole Slorer with Morgan Stanley. Please proceed.

Thank you very much. I wonder if you could share with us your thoughts about the outcome of the trade case in U.S. and what the next steps would be if any?

Thank you, Ole. I think, basically, I said this in my opening remarks, the preliminary determination the Department of Commerce made clear that they didn’t take into full consideration some relevant aspect and some data that they will take it definitely into consideration in preparing the final determination. I am talking about Korea, the decision running around Korea, which is a very important aspect of this determination. We are confident that these will be taken into consideration in the final statement. Now, anyway, these -- the way the preliminary determination has been determine will have an impact on the market and this is something that I checked in my point because in the first semester of this year, we can anticipate that some continuing impose on the sources of Korea and the possibly some talk build up into the market of product. Let say let differentiate the product, this something we can expect. On the other side, there will be some restriction on import from the other sources for which have been established on determine some relevant duties -- antidumping duties. This to some extent will impact, first semester but the stock buildup will have some impact also in the second part of the year in any case. But I iterate again reading carefully to the Department of Commerce determination, we feel that the final determination will definitely consider issue that we are -- that we are -- we consider very important for the final judgment.

Okay. So just understand, it’s more to come and you don’t think that this is settled yet and is still -- it sounds like you’re still hopeful of getting the resolution that you would like?

Yes, I think we are very confident because the element that is used is DOC is stating very clearly that they are not considering are very relevant. I don’t know, German, if you want to add something on these -- on the specific companies.

Thank you, Paolo. Good morning. On a very specific and very brief, Ole, department of commerce, it is our understanding that works with statutory due date and they ultimately has to come out with a preliminary determination. But it is clear from the briefing that they believe that they have not used the complete data in terms of sales and costs for the Korean exporting company. And they also made emphasis on the fact that they are going to be looking at those specifics going forward before the final determination is achieved.

There are a lot of cases in the past in which the difference has been this -- this, the impact of this full consideration and verification of data has led to final determination that has been substantially higher than the preliminary. Obviously we would have preferred the earning in the preliminary some of the data would be considered but time constraint acted I mean for the DOC. This is situation, no, German?

This is so and also I had seen an important element, Paolo, is that the preliminary determination is fundamentally very strong information provided by the respondent. And it is now open fact the need for verification as we just explained.

Okay, that's clear. I'm not too familiar with this kind of a process, so it sounded to me almost, I suppose, a final decision and I was a little surprised. So that explains that they had a deadline, they had to come up with something. They hadn't time to consider everything, okay. If we move on to -- if you can give us, just very quickly, the two most interesting markets in the world right now may be Argentina and Mexico and you're right in the middle of both of them. So with the settlement between the Argentinean government and Repsol just around the corner potentially and coming now into the thick of a Mexican energy reform on the other side. Could you share your thoughts on how you see these markets develop with new entrants, new oil company entrants potentially entering both of these two markets and the timing of that?

Yeah, well I will briefly comment on Argentina then I will ask German to give us a view on Mexico after the energy reform. As far as Argentina is concerned, I think that the agreement with Repsol is very important to unlock some decision of investment in the energy sector. So I hope that this as you say around the corner and we will be quickly turn this corner because it is an important decision by the government. Now whenever we look at the development, it’s clear that Vaca Muerta is an essential, very important play. Potential there is I think everybody in the company that are start to give, I’d say to get a dimension of these, all agree that the first appraisal are confirming the importance of the play. I would expect that during this year, however, company will design best technology. For instance, YPF, Chevron by May -- April, May or June, we’ll analyze that the results of around 150 wells that have been drilled in the play and take decision to finish on concerning the best technology and the strategy for development of something that is relatively not very well known and present technical difficulty. Now after this, I would say that we will design the development plan and it will be very important that the position and -- the position of the government after the Repsol settlement would address some of the key issue in the energy sector crisis. And so in a way that give credibility and predictability to the main variable for this. It’s clear that Argentina need the development of Vaca Muerta. Vaca Muerta is part of the solution for the country, also for the macro economic. It’s a good contributor substantially to the macroeconomics improvement. So there are strong reasons to proceed in this development. We hope that to get policy decision we create the condition on the surface for development of the full potentials. I would say that during this year we will have a slow increase in the number of wells but these conditions are given 2015, the volume of activity should step up much strongly than during 2014. This is my expectation. Now in the long run, today United States, you are drilling around 14,000 wells per year in the Shale. Argentina, it’s not unthinkable that in four or five year, we will reach 800 to 1000 wells per year in the same play provided that the condition on the surface will be predictable. Guillermo, maybe you can comment on Mexico.

Sure. Thank you Paolo. Good morning Ole. Good morning everybody. Maybe to give you a little bit of our reference of the times that we are seeing in the energy reform in Mexico. I can walk you very fast through the main milestone dates from a legal process that have to take place before biddings are assigned. As you know the energy, the Constitution was changed by then end of last year. And after that, the secondary loss have to be drafted by Congress and the date that we expect that to happen is before the end of the session of this year which is by the end of April. So we should have knowledge of the other specific loss that are going to be applied to the new processes and into a new private investment by the end of April. At the same time -- at the time the constitution was -- the changes in the constitution were approved, they granted 90 days to Pemex in order for Pemex to select those areas that they want to maintain for their own production and for their own investment. So these would take the process of Pemex and Pemex had to do a proposal to the Energy Secretary by the end of March and then the Energy Secretary has 180 days in order to define -- to approve what Pemex has proposed or to define any modifications. And at that time, it is going to be known exactly what’s going to be selected for Pemex and what’s going to be selected for outside investment. After that the Energy Secretary is going to design the bidding structures per se and is going to select the structure of the bidding areas. And so that will probably take us to the end of 2014…

That’s certainly interesting, German. So the 180 days take you to the end of the third quarter, but in a meanwhile, you said it could be foreign investors funding Pemex projects?

No, no. But yes, but not at that time I think because all this process at Pemex today, the problem that Pemex has today is that they don’t know what they are going to be drilling and what they are not going to be drilling. And so far them it’s very difficult to take investment decisions. So right now, what they are doing is an effort to maintain production with ease. I think that I start to see the process that you mentioned by early 2016, 2015, and then the rest of the process taking stronger in 2016.

Okay. Guys. I have another 20 questions, but I think I will hand it back to you there. So thank you very much.

Thank you, Ole.

Your next question comes from the line of Jim Crandell with Cowen. Please proceed.

Good morning. You made a comment in your press release that you expected sales in the Middle East and Africa to be unchanged, which surprises me a bit given the strength in activity in Saudi, Kuwait, Oman, Abu Dhabi and in West Africa, Angola. Could you elaborate a bit on that?

Yes. Jim, as we see, we will see, Jim, some reduction from our point of view in Saudi compensated by the very strong action in Africa. But I will let, Gabriel Podskubka to comment on this.

Thank you, Paolo. Yes, Jim, good morning. Good morning to everyone. Indeed, we expect revenues in the eastern hemisphere in 2014 to be at similar record levels as in 2013. We believe that Sub-Saharan Africa will experience an area of important growth, driven by exploration activity in the pre-salt Angola, East Africa and other frontiers, and also development programs that have been launched in Angola, Ghana, Congo and even Nigeria. These are areas where we are supplying not only the casing and the tubing with a premium connections but also high spec pipelines with associated coatings as well. This is supported by a local manufacturing and service setup in an area that is highly sensitive on local content. Regarding Middle East, it will be another strong year for Middle East. However, in Saudi, rigs are been deployed, activity is being increased but we expect that Aramco will reduced the procurement year-over-year, factoring and balancing the inventories with some production expected in revenues especially during the second half of 2014. Tendering is expected to be strong in the rest of the Middle East, Kuwait and UAE, and this will take sometime to factor in our revenues towards the end of the year or even 2015.

So you don’t really see a decline in activity coming out of Saudi. It’s just the timing of their tendering process, which may cause Saudi to be down in 2014.

Exactly. This is exactly what we think.

Okay. Good. And more question, back to the previous questions about the decision announced earlier this week. As I understand it, some of the pipe that’s exported into the U.S. by these nine countries is seamless pipe and they did put additional duties with some of these countries that exports seamless pipe into the U.S. Should this aspect of the ruling have any positive effect on Tenaris?

German, maybe you can look into this and answer.

Good morning, Jim. I think in various practical terms, what is going to happen is as of say this week, immediately after the preliminary determination. The exporting countries that are subject to preliminary duties will need to leave a bond while clearing customs and those bonds ultimately would be adjusted with whatever final determination is taken, July, the 7th.

This will, I mean, will clearly reduced importing to the states by the company that has received anti-dumping duty. But we have to understand how the other that do not have restraint, like I say, Korea will react to his. So there will be, I think some limited impact because, also I think there has been an inventory build-up in demand in the last few months and some of this will go on also in the first quarter globally in first or second quarter this year. So we will not see, I think positive affect until we got to the final determination in our operation in the next quarter.

Okay. And just one final quick question, could you comment on the project delays that are taking place in Brazil, and based on your sort of intelligence about what’s going on down there, what you are expecting out of Brazil over the balance of 2014?

Well, I think very well, this has not been an easy time for Petrobras. Petrobras has different constraints, financial constraints, some redefinition of project and so this has led to a postponement of project and concentration on the activity in the existing field where they increased work over, they delayed our postponing sand projects. For us, this has led to a substantial reduction in our sales of lines, pipelines to some extent also of deposit produced. Now, the activity is going on. However, Brazil will recover that level of activity in the future. And for example and these days, we are negotiating the best build for the offshore part of the rotary pipelines that is connecting the offshore field. In the coast, we are negotiating a project, a big project in the range of 130,000 tons. But what we expect is that that the negotiation, we will not be able really to start seeing invoicing on this until maybe part of the last quarter or for sure in 2015. This is the kind of affect that we are preceding. Also, this is election year, there is the work cut. Priority is also given to different project. So, I don’t think we will see a recovering in the activity of Petrobras during 2014, but it would be very reasonable to plan for a recover in 2015 and 2016.

Okay. That’s very helpful. Thank you, gentlemen.

Thank you.

Your next question comes from the line of Bill Sanchez with Howard Weil. Please proceed.

Thank you. I just wanted to come back and talk a little bit about I guess the forward guidance and further kind of reconcile that versus 4Q results. And Paolo, I know you talked about the first semester and maybe some of the challenges there with regard to the DOC ruling. But for a similar outlook here, ’14 versus ’13, I think most are saying, earnings probably fairly flat and that’s what you guys are seeing. It sounds like topline maybe the expectation is also flat year-over-year. But I look at the margin performance at the EBITDA line in 4Q and then, I kind of look at first semester here and still think about high seamless content, the efficiency improvement that you spoke about earlier. I guess I would expect that maybe EBITDA margin to be a little bit stickier here, at least through the first half of the year and then thinking about the DOC ruling, that really you guys probably wouldn’t have started to see any real benefits to that on your income statement. Let’s say until the second half of the year even if Korea had been included. So, has there really been a change in terms of how you think about North America in the first half of the year or the U.S. specifically around the DOC ruling? Is that having more dilutive impact to margins, or is there something different that’s taking place and the market is just continuing to be weaker, even though I think people were more optimistic about spending now than they were 90 days ago in the U.S.?

Well, as you were saying -- well, first of all, in this quarter, we had very good margins. If you look at the margins in tubes, we are reaching a very high-level margin. This is -- we are reaching I think something in the range of 29%. Now, this comes from some very good efficiency in the plans. You will see this in the cost of sales. But we are gradually catching the benefit of being able of producing from the new plant in Mexico and optimizing our production line, but also efficiency that we’re getting in each and any one of the plant. Out cost are contained also the devaluation of the currency Mexico in the future, the impact of devaluation in Argentina to some extent is containing our cost. So the cost effect is relevant. You also can see the cost of iron ore, coal or hot rolled coils. In some -- to some extent we expect this to support our management. Beside this quarter has been quarter in which our mix has been skewed towards high-end product. I think we reached here very high level in the level of 62 of high-end over our mix. We’re concentrating in premium and sophisticated product. This is driving slightly higher EBITDA margin, even if the overall level of revenue is not increasing so much, because in the end the low-end product probably at the lower level that we could have expect. Now, this is how the company goes and we expect next year to be substantially stable on this, because we have to consider the impact, the preliminary determination will create some overstocking of imported pipe in U.S. So this will effect, not only the first six month but we’ll some impact also on today but on the entire year. This is what we are factoring. We do not consider that our growth has changed or has stalled, but we considered immediate postponement of this because of the situation created. The United States by flows of import if you consider growth import from Korea in the first two months. We are talking about 200,000 tons of pipes that entering to U.S. in the month of January level. So these are factor that are making us to be a more curious on next year in term of revenue. In term of margin, I think that the cost or the share of differentiated product and so will allow us to maintain the margin substantially at the level that I said.

Okay. I guess, I’ll ask one more, new tax rate was exceptionally high in 4Q. Could you give us just an outlook on what an effective tax rate for modeling purpose be good for 2014?

Yes. This I will ask, Edgardo, to give a comment on this decrease...

Sure. Thank you very much for the question and good morning, Bill. Yeah. Given, and in the whole we have been suffering a significant pressure on taxes, basically in Argentina and Mexico. But these particular quarter has been affected by the effect of the devaluation in Argentina and Mexico that reduce our value on the fixed asset and therefore affected our before tax. Coming into 2014, we are maintaining our guidance of 28% to 29% on tax rate. And in the first quarter of 2014, we are expected to maintain more or less the same level of the tax rate that we have in the fourth quarter because of devaluation in Argentina.

Okay.

Okay.

Thank you for that. I’ll turn it back.

Your next question comes from the line of Michael Lamotte with Guggenheim. Please proceed.

Thanks. Good morning, gentlemen. If I could follow-up on the question of capacity, Paolo, I’m curious as to where you are with respect to premium capacity utilization and the initiatives that you have to improve efficiency to perhaps increase the ability to deliver more volume on the premium side?

Well, we are -- as we stated in the preliminary remarks, clearly, this year 2013 we had a very important increase in premium, very important increase in Dopeless. Dopeless is basically growing faster and it’s important for us. It’s becoming standard product for off-shore operation. So part of our investment is going in this direction. Now we will increase spend also our sales in next year, the new facility in Romania, that was started in December is entering is taking full capability and so we are adding to our capacity and this is allowing us to serve all the market in which we are, probably the evolution of Mexican operation will be important also to determine, finally which will be the level of our premium sales in 2014. But let say we can count on capacity that we rather increase because of the investment done and the recovery inefficiency we’re doing. Still I will say that this will not be such a substantial increase that we can expect in 2014 for the time being. This is here something that I want to mention. The expenditure in CapEx for exploration and production, we grow this year but we’ll grow at lower level than in 2013 or 2012. And the CapEx expenditure by the major oil company in our view will be probably be a little more effective in the national oil company. So there will be some change of mix in client and we have to see how in the long run this will result in the demand for premium. We have limited visibility to talk about the second semester of 2014.

Okay. Is, perhaps, one way to think about it, if I look at the fourth quarter rate in deliver -- deliverability and tonnage, 2014 could be kind of mid-single digits delivery above the fourth quarter level on the premium side? Is that reasonable?

Well, this, all in all, should be reasonable, but I would caution on the visibility that we have on second -- for the second semester. Now because this is -- we have to check some of the exploration program of major oil companies, some regional oil in which we have very important contribution and also to understand well what Saudi Aramco will do in the second semester and how the -- this -- they will need to probably do some destocking. We would like to see exactly the size of this in the second semester 2014. But basically we expect an increase and the range could be the one you mentioned are in that range.

Okay. Thank you, Paolo. And I'm curious steel costs went up in the second half of 2013 and I have been following the last couple of months? Are we going to see the cost of steel flow through the P&L this year on an average or normalized basis or is there going to be some pinch on the margin in the first half of this year and then relief in the second half as that volatility flows through?

I -- in my view there will be some moderate increase. We are now getting into our cost, according to some cost increase that has been in the hot rolled coils back in September, October. And then I would expect some decrease later in the year. But we should consider that hot rolled coil is not really the main components of our cost, other cost related to domestic cost in Argentina and Mexico and -- are acting in the other way.

Yeah. Yeah. Okay. Very good. And then, also, German, if I could just follow-up just on the Korea comment, it sounds like we could perhaps interpret the preliminary ruling as inconclusive, perhaps, on Korea as opposed to an acquittal? Is that how you would characterize it perhaps?

I think, I would characterize it perhaps incomplete.

Okay.

Substantial component of the data has not been made available at this point and this will happen, I believe, based upon what the DOC have indicated in the coming months.

Okay. Very good. Thank you.

Thank you

Your next question comes from the line of Andrea Scauri with Mediobanca. Please proceed.

Yes. Hi. Good afternoon, everyone. I have a couple of questions. The first one is on the pipe logics. Could you elaborate on devolution that you expect on prices in both of the two cases? I mean, if a final ruling against Korea is confirmed, as it is today, or if there is a change in this ruling against the Korean exporters, where do you see prices going in second half of 2014 and 2015? Second question is, in the case of the ruling is favorable in your view, do you expect any incremental EBITDA versus the guidance that you have provided, or it is too late to affect 2014 numbers? Third question, if I may, on CapEx. Could you tell us what is the level of CapEx that you are expecting in the next couple of years? Thank you.

Thank you, Andrea. One brief comment on the Pipe Logix, you're right the Pipe Logix has declined over 2013. It was full affecting our operation. We are offsetting this with more differentiated mix but still be an important factor now in containing or limiting our margin, I would say. Now in 2013, it will be there. The decrease has been around 14% from one year starting ago. The Pipe Logix is important also because it is a component of some of the formula with major oil companies. I think together with other issues. So it has relevance. Frankly, I do not expect so much impact on this depending from the solution of the case at least in 2014 because industry has the capacity installed to make up for reduction in input and especially to do it considering that the existing stock will give time to the industry to pick up with increased capacity utilization. Now when I was talking about 2016, I really think that the dynamics of demand and supply should drive the margin of the industry in the U.S. to slightly higher margin. If you look at this, this is what increase in drilling for gas increasing in the activity over the medium-term, I think should gradually get back to a level of price realized that is higher compared to what we have today. But anyway this is for the, let say, medium-term. When we talk about the EBITDA the margin, well I think that considering stock deduct that we had until now and that we can expect until July, this will not change basically the forecast that we see in 2014 we would have margin more or less in line with the 2015. This is as much with the visibility that we had with some of the major issue now. This could not be changed for Tenaris by the determination occurring in July, I mean it's too late for this year. As far as the cap concerned, we are substantial increasing the level of CapEx. We were this year investing around …

Roughly $1.2 billion.

In 2014, we plan to invest around 1.2 billion because we are start to stand in the building of the new plant. Basically we are completing the heat treatment and the new plant in Columbia and we have also investment in high value-added line in Saudi Arabia and in part of our facility. This year, the CapEx has been…

Almost $800 million.

800 million we'll go up to 1 billion.

So already 2015 we will go up again to 1.2 billion.

Yeah, it will be a level that we could be maintained for 2015.

Okay. Very last question, are there any acquisition targets that you can -- that you see on the market at the moment in the high end or the current situation, if you as you are without implementing any acquisitions

Always as usual, we are considering opportunities and alternatives that may intense strategic position. Why? We have the very strong financial position, but nothing.

Okay. Thanks.

Your next question comes from the line of Fernando Valle with Citi. Please proceed.

Hi guys, Thanks for the call. Two questions from me. The first is we have seen gas prices in the U.S. rise significantly during 2014 and then we are also seeing storages to be very low, probably one of the tightest gas markets in the past few years. When you say you are seeing stable demand in margins in the U.S. for this year, are you considering that there won't be any movement towards dry gas, dry gas plays? Have you seen any of your clients already moving towards dry gas drilling? Can you just give us a little color on how that's working for you guys? The second question is you generated a lot of free cash flow in 2013, and even though CapEx is increasing in 2014, you still have a very strong balance sheet. Just wanted to understand; are you guys looking for opportunities to reinvest that capital? I know you've mentioned in the past complementary services. Could you just give us a little bit of color on timing and also what kind of services you are looking at? Thanks.

Thank you, Fernando. I'll ask German to give a view on perspective for drilling for gas in North America.

Thank you, Paolo. Good morning Fernando. I think I'll split the answer in with a short-term view or mid-term view Fernando. Frankly, view we have is that the gas price we see today is perhaps associated to one of the worst winters that we have and we continue to have. But it is the view of our users customers that when I need to be see it's over, it is more than likely that you'll probably go back towards the levels that we've seen during the past so many months more like 4 and 4.5 band in the last few weeks. However, the midterm view is where we are of the idea that increase, domestic increase demand, more power generation fuel by a natural gas ranges realization process continues to go on ultimately some LNG impact or exports in the end would also play a factor. In the end we believe that this $4 gas is not sustainable overtime. It would recover at one point and this would directly be associated with a need of increased drilling. You said it we have seen higher consumption and a drastic reduction on the inventories when you compare to with positions of last year and even the average of the last five. This lead us to believe that mid-term wise the existing level is not really sustain and it has to increase.

Okay. Thank you, German. Well, as far as the opportunities could come to -- for Tenaris in the area of service and the aspect of our business, as I said before, we're continually looking into opportunity and how we can strengthen our position region-by-region, product-by-product and considering let's say the positioning we have in the different area. There is nothing concrete that we would like to comment now.

Okay. Thanks guys.

Your next question comes from the line of Stephen Gengaro with Sterne Agee. Please proceed.

Thank you. Good morning, gentlemen. Two questions, if you don't mind. The first -- and we're getting back to this a little bit. But in the press release when you talk about ‘14 being kind of in line with ‘13, can you give a little more detail? Are you talking about revenue, EBITDA, or earnings, or all of the above? And how does that play into volumes as well?

Well, we're considering all of them. Staying to the situation in --as far as we can see now and the visibility we have now, we can expect different aspect of our business to influence as a whole 2014. But if we want to summarize this I think is a fair statement that we expect any more or less in line with 2014. In terms of revenue EBITDA, we will be there -- EBITDA ratio. Now this is exposed to variation that could come from second semester, no doubt and this is also taken in to consideration, what will happen with the trade case in the United States. I think, this is a fair way of giving, let’s say, a view for the future. And then we will adjust it in the next quarter, while we get some more input from the different region on the evolution of the situation.

Okay. Thank you. And then, second, and I understand you don't like to provide any specific color on margins by product line. But when we look at the numbers in ‘12 to ‘13, and even if you talked about it on a year-over-year basis, are the margin fluctuations being driven by price, mix, or just kind of manufacturing efficiency? I'm trying to get a better sense for how to think about the critical drivers of your margins. And I think looking back to last year’s performance, may give me some light on that if you could elaborate a bit?

Well, we are operating in many different countries and region of the world in the project that has different characteristics and they are also changing over time. Our margin in the end is a result of a mix, considering sales in different region and different project at different product. And some of the product has very big difference in price and margin among themselves. I mean, among them. So in the end, the combination of the complexity and the value added in the mix. The competitive environment in some of the region for low end or for high end is a very important driver for our margin. And also on the cost side, and that is basically based on 45 facilities all around the world. The condition of cost is permanently changing. So, you have the valuation in Argentina is changing our position and the margin coming from them and the situation of the currency metric. Also in Italy or Europe, I mean there are factors that are specific for the plans related to the input that we use for our production and they are all affecting these. So it’s a complex equation. We overtime, I think you can try to catch line and we try to transmit which are the factors that are influencing this. For sure, the complexity of the mix is a very important component because in the end, we have in a differentiated product, the competitive situation is different. We compare with some of the low-end market like the one we face in the welded pipe area in the United States that is what we can consider a low-end from our country.

Okay. Thank you. Just as a quick follow-up to that. One of the things that has surprised me a little bit is that the mix seems to have gotten better based on the premium, the commodity data that you gave. But the margins haven't necessarily gone up as much as I would have thought in that scenario, that's why I was trying to get to, if there was any -- do you have any comments on that?

Well, you remember in 2013, we had to make up for a big decrease in the Pipe Logix. Pipe Logix went down by 14%, so we are going against the wind and some of the change in the mix and our penetration in important projects is compensating for an overall price decrease in the United States that to some extent reverberated also, reverberated or reflected outside. This I think is the main comment. Now, what I would like to remember that still the 29% EBITDA ratio in the tubes segment, or even the 28% in the overall company is one of the probably the leading margin, one of the leading margin in our industry. So we are running at a high speed in this and I think that this has to be taken into consideration.

Right. Now that’s very helpful. Thank you.

Your final question comes from the line of Geoffroy Stern with Kepler. Please proceed.

Yes. Hi. Actually I have two questions. The first one is a global one. Just coming back on the premium demands on a global basis, what are your expectations for this year and next, because if I remember correctly, not that long ago you were expecting premium demand to increase by, let's say, anything between 8% to 10% per year. Do you think this is achievable this year? That's my first question. And the second question is just to come back quickly on Brazil. Back in November, you already indicated that you were not expecting any pickup in the line pipe business before September 2014. Now you seem to suggest that nothing will happen before early 2015. To what extent is this also valued in your view for the OCTG business, because mostly were from, let's say, U.S. well services companies have indicated that so far Petrobras is very much focused on well completion and that the drilling activity in the first half is going to be very limited. But to what extent we could see, let's say, a recovery, a pickup in OCTG activity in Brazil before your recovery in line pipe business? Thanks.

Thank you, Geoffroy. Well on the first one, for the long run, we continue to think that the premium market, as I was saying, between 8 -- around 8% more than the market for less demanding product. You will see this in the nature of the drilling exploration and development of the oil industry. The oil industry is looking for opportunities more and more in deep offshore and offshore, in complex project and premium is driven by this. And it is driven also by complex application in shales. So we are convinced that this is the way that market develops and we will do this thing in the medium-term. Now as far as 2014, as I mentioned before, the fact that’s the major and especially some major is scaling down the CapEx expenditure for 2014. It may lead now to some reduction premium demand in (inaudible). One example is Brazil. Brazil is basically premium user. Petrobras is premium user for the pre-salt development. If Brazil concentrates on well completion, this set will subtract to the overall growth of premium worldwide. But all the element that justify our view of premium are there, I would say even more so. All the indication we have from our dialogue with the major oil companies and we are confirming this. This year, our promotion of Dopeless encountered very favorable ground in some project in Gulf of Mexico like shale stone after (inaudible), driving drop projects in which you will see that this is not only premium but it’s a premium of a new generation that is required. U.K. is an example, we had the discussion with Conoco, Jasmine or (inaudible). We see that not only there is this increase, but there is also demand for a very sophisticated new generation of premium that fits…

All right. Thank you.

And this concludes the Q&A portion for today. I would now like to turn the call back over to Mr. Giovanni Sardagna for any closing remarks.

Thank you, Jornada. And thanks to you all for participating in the call, and I’m sure I will see most of you in the coming months. Thanks.

Ladies and gentlemen that concludes today’s conference. Thank you for your participation. You may now disconnect. Have a great day.