DGAP-News: TMK ANNOUNCES 4Q 2012 AND FULL-YEAR 2012 IFRS RESULTS
(firmenpresse) - EquityStory.RS, LLC-News: OAO TMK / Key word(s): Miscellaneous
TMK ANNOUNCES 4Q 2012 AND FULL-YEAR 2012 IFRS RESULTS
06.03.2013 / 09:38
---------------------------------------------------------------------
TMK ANNOUNCES 4Q 2012 AND FULL-YEAR 2012 IFRS RESULTS
The following contains forward looking statements concerning future events.
These statements are based on current information and assumptions of TMK
management concerning known and unknown risks and uncertainties.
OAO TMK ('TMK' or 'the Company'), one of the world's leading producers of
tubular products for the oil and gas industry, announces today its audited
consolidated IFRS financial results for the twelve months ending December
31, 2012.
Summary 4Q 2012 and Full-Year 2012 Results
(In millions of $, unless stated otherwise)
4Q 3Q Change,% FY FY Change,%Note: Certain monetary amounts, percentages and other figures included in
2012 2012 2012 2011
Sales, thousand tonnes 1,082 1,050 3% 4,238 4,185 1%
Revenue 1,631 1,617 1% 6,688 6,754 -1%
Gross profit 331 352 -6% 1,483 1,446 3%
Income before tax 53 94 -43% 405 544 -26%
Net income 32 69 -54% 282 385 -27%
Earnings per GDR(1),
basic, U.S.$ 0.12 0.32 -63% 1.28 1.76 -27%
Adjusted EBITDA(2) 230 243 -5% 1,04 1,05 -1%
Adjusted EBITDA margin, % 14% 15% 16% 16%
this press release are subject to rounding adjustments. On occasion,
therefore, amounts shown in tables may not be the arithmetic accumulation
of the figures that precede them.
(1) One GDR represents four ordinary shares.
(2) Adjusted EBITDA is determined as profit/(loss) for the period excluding
finance costs and finance income, income tax (benefit)/expense,
depreciation and amortization, foreign exchange (gain)/loss,
impairment/(reversal of impairment) of non-current assets, movements in
allowances and provisions, (gain)/loss on disposal of property, plant and
equipment, (gain)/loss on changes in fair value of financial instruments,
share of (profit)/loss of associates and other non-cash items.
4Q 2012 Highlights
Sales Volumes
- Total pipe sales increased by 3% to 1,082 thousand tonnes compared to
the third quarter of 2012 mainly a result of higher demand for seamless
OCTG pipes and large diameter pipes (LDP).
- Seamless pipe sales increased by 2% compared to the third quarter of
2012 and amounted to 619 thousand tonnes. Seamless OCTG pipe volumes
grew by 13% quarter-on-quarter mainly due to strong drilling activity
in Russia.
- Welded pipe sales increased by 4% compared to the prior quarter and
amounted to 463 thousand tonnes. Welded OCTG pipe sales remained
relatively flat quarter-on-quarter while welded line pipe volumes
decreased by 16% compared to the third quarter of 2012 due to weaker
consumption in the U.S. Sales of LDP grew by 28% as a result of TMK's
participation, among other projects, in construction of the Russian
onshore section of the South Stream pipeline.
Financials
- Fourth quarter revenue was relatively flat compared to the prior
quarter and amounted to $1,631million. The unfavorable changes in
seamless pipe pricing in the American division were offset by higher
LDP volumes in the Russian division as well as the impact of favorable
currency translation.
- Adjusted EBITDA decreased by 5% quarter-on-quarter to $230 million
being negatively affected by lower sales and weaker pricing in the
American division. Consolidated adjusted EBITDA margin was 14% for the
fourth quarter of 2012.
- Net income was $32 million for the fourth quarter as compared to $69
million in the third quarter of 2012. Net income adjusted for the
gain/(loss) on changes in fair value of the derivative instruments(3),
amounted to $38 million; adjusted net income margin was 2% for the
fourth quarter of 2012.
- In the fourth quarter of 2012, total debt increased as a result of the
Rouble appreciation against the U.S. dollar and the acquisition of a
subsidiary with a $98 million debt on its balance sheet, while net
repayment amounted to $75 (including partial repayment of the acquired
subsidiary's debt). At the same time, net debt decreased by $30 million
to $3,656 million because of the significant growth of cash and cash
equivalents balance at the end of the year. As a result, Net
Debt-to-EBITDA ratio(4) improved to 3.5x.
(3) For the purposes of this press release, net income has been adjusted
for the gain/(loss) on changes in fair value of the derivative financial
instruments to reflect management's opinion in respect of the treatment of
the conversion option.
(4) For the purposes of this press release, net income has been adjusted
for the gain/(loss) on changes in fair value of the derivative financial
instruments to reflect management's opinion in respect of the treatment of
the conversion option.
Full-Year 2012 Highlights
Sales Volumes
- Total pipe sales for the full-year 2012 were virtually flat compared to
the prior year and amounted to 4,238 thousand tonnes.
- Seamless pipe sales increased by 7% year-on-year and amounted to 2,495
thousand tonnes. Seamless OCTG pipe volumes grew by 15% year-on-year
primarily as a result of a robust exploration and production (E&P)
activity of the Russian oil and gas majors.
- Welded pipe sales decreased by 5% year-on-year and amounted to 1,743
thousand tonnes. Welded OCTG and line pipe sales increased by 3% and
17% respectively, while LDP sales declined significantly due to the
completion of major pipeline projects and the postponement of new ones.
Financials
- Revenue decreased by 1% year-on-year to $6,688 million mainly due to
the negative impact of currency translation. Excluding the full-year
2012 unfavorable currency translation impact of $318 million, total
revenue would grow by $252 million. Sales of seamless pipe, the core
business of the Company, comprised 62% of total revenue.
- Adjusted EBITDA for the full-year 2012 decreased by 1% year-on-year to
$1,040 million while gross profit increased by 3% year-on-year. Higher
volumes of seamless OCTG and better profitability of the welded
business in Russia were offset by the negative effect of currency
translation, higher operating expenses and negative sales mix in the
American division. Adjusted EBITDA margin amounted to 16% for the
full-year 2012.
- Net income was $282 million for the full-year 2012 as compared to $385
million for the full-year 2011. Net income adjusted for the gain/(loss)
on changes in fair value of the derivative instruments, amounted to
$290 million; adjusted net income margin totaled 4% for the full-year
2012.
- Net debt increased from $3,552 million as of 31 December 2011 to $3,656
million as of 31 December 2012 mainly as a result of the effect of
Rouble appreciation against the U.S. dollar and the acquisition of a
subsidiary with a $98 million debt on its balance sheet. Net repayment
of borrowings for twelve months of 2012 amounted to $148 million
(including partial repayment of the acquired subsidiary's debt).
Recent Developments
- In December 2012, TMK acquired 55% ownership of Gulf International Pipe
Industry (GIPI) in Oman. The plant's annual capacity exceeds 200,000
tonnes of welded OCTG and line pipe.
- In December 2012, TMK established a service joint venture, Threading
and Mechanical Key Premium LLC, with EMDAD in Abu Dhabi, the United
Arab Emirates, with annual production capacity of 10,000 tonnes of
premium pipe. The center will focus on repair of pipes and underground
equipment as well as threading of connections on various components of
pipe columns. Commissioning of the center is set for the middle of
2013.
4Q and Full-Year 2012 Segment Results
(In millions of $, unless stated otherwise)
4Q 3Q Change,% FY FY Change,%Russia
2012 2012 2012 2011
Sales volumes
(thousand tonnes)
Russia 826 797 4% 3,159 3,115 1%
Americas 211 214 -1% 903 892 1%
Europe 45 39 15% 176 178 -1%
Revenue
Russia 1,212 1,132 7% 4,714 4,788 -2%
Americas 352 410 -14% 1,650 1,590 4%
Europe 67 75 -11% 324 375 -14%
Adjusted EBITDA
Russia 195 190 2% 766 721 6%
Americas 26 42 -38% 222 265 -16%
Europe 9 10 -14% 52 64 -19%
In the fourth quarter of 2012, revenue for the Russian division increased
by 7% to $1,212 million compared to the prior quarter mainly due to the
positive effect of currency translation and higher volumes of welded pipe,
primarily LDP, driven by TMK's involvement, among other projects, in the
Russian onshore part of the South Stream pipeline. Adjusted EBITDA amounted
to $195 million, an increase of 2% compared to the third quarter of 2012
mainly as a result of lower selling expenses.
For the full-year 2012, revenue of the Russian division decreased by 2% to
$4,714 million due to the negative effect of currency translation, lower
volumes and unfavorable sales mix of welded pipe as a result of a decrease
in LDP sales. Adjusted EBITDA increased by 6% year-on-year to $766 million
on the back of higher seamless OCTG volumes and improved profitability in
the welded segment due to a significant drop in the average purchase price
for steel coil.
Americas
In the fourth quarter, revenue for the American division decreased by 14%
to $352 million compared to the prior quarter primarily due to weaker
pricing across all product lines of seamless and welded pipe following
temporary drop in demand as a result of customer's year-end inventory
adjustments and declining rig count. Adjusted EBITDA decreased by 38% to
$26 million in the fourth quarter of 2012 primarily due to lower volumes
and unfavorable pricing attributed to welded tubular products as well as
weaker pricing across all product lines of seamless pipe.
Revenue for the American division increased by 4% year-on-year and amounted
to $1,650 million for the full-year 2012. The increase was driven by higher
volumes of primarily welded OCTG and welded line pipe as well as changes in
sales mix of seamless pipe that was to a significant extent offset by a
drop in sales of both seamless industrial and line pipe. Adjusted EBITDA
for 2012 declined by 16% to $222 million. The decline was largely driven by
negative sales mix, in particular higher share of welded pipe, and
decreased profitability of seamless pipe due to higher fixed costs
absorption.
Europe
In the fourth quarter, revenue of the European division declined by 11% to
$67 million compared to the prior quarter mainly dueto a significant drop
in steel billets sales and a weaker pricing for all product lines as a
result of challenging macroeconomic conditions in the European Union.
Adjusted EBITDA fell by 14% to $9 million due to the above mentioned
reasons.
For the full-year 2012, revenue of the European division decreased by 14%
to $324 million primarily due to the unfavorable impact of currency
translation and weaker pricing while sales of seamless industrial pipe
increased year-on-year. Adjusted EBITDA declined by 19% to $52 million due
to the above stated factors coupled with an increase in selling, general
and administrative expenses.
4Q and Full-Year 2012 Market Conditions
Russia
In the fourth quarter of 2012, the Russian pipe market remained flat
compared to the prior quarter as the growth of line pipe was partially
offset by the weaker demand for industrial pipe due to slower construction
activity in Russia and lower consumption from machine building industry.
Demand for TMK's core products, seamless OCTG and line pipe, was relatively
strong. For the fourth quarter of 2012, the seamless OCTG and line pipe
market in Russia increased by 12% and 48% respectively compared to the
third quarter supported by a high level of drilling activity in Russia and
seasonal stock up period.
For the full-year 2012, the Russian pipe market declined by 10%
year-on-year primarily as a result of weaker consumption of LDP due to
large project completions in 2011 and the postponement of new ones.
Full-year 2012 seamless OCTG and line pipe market in Russia experienced a
strong growth of 7% and 15% respectively compared to the full-year 2011.
High demand for oil and gas continued to be supported by a robust level of
E&P activity resulting in growth of total meters of oil wells drilled by 9%
year-on-year.
Americas
OCTG demand in the U.S. saw the rig count declines continue in the fourth
quarter of 2012. According to the Baker Hughes rig count, the U.S. finished
the fourth quarter at 1,763 active drilling rigs, down 12% from the prior
year. The recovery in gas prices over the past two quarters has not had a
visible impact on the gas rig count, which remains at some of the lowest
levels experienced in over a decade. Natural gas prices are well below
historical levels, but crude oil prices have remained relatively stable. As
a result, the vast majority, 75% of active rigs, are employed in oil
drilling. The rig count activity shift from gas to oil has altered
customer demand, however, oil exploration continues to support demand for
TMK's line of premium connections.
According to Preston Pipe and Tube, in the fourth quarter of 2012 U.S.
industry OCTG shipments decreased by almost 7% as compared to the fourth
quarter of 2011 and were down roughly 17% compared to the third quarter of
2012. Per the OCTG Situation Report, while the inventory months of supply
declined in December, the levels are still well above the average for the
prior six months. Although import shipments were slightly below the highs
seen in the first half of 2012, per Pipe Logix, imports continued to
represent over 55% of the U.S. OCTG market in the second half of 2012, with
a sudden drop off in December.
Europe
In the fourth quarter of 2012, and throughout the full-year 2012, the
European market continued to be challenging, with weak demand and growing
competition. Additionally, in the fourth quarter of 2012, the market
experienced a seasonally weaker level of consumption as construction
projects were completed before or suspended due to the beginning of winter.
Falling demand from mechanical engineering, automotive, power generation
and construction industries was driven by the customers' intention to
minimize inventory level resulting in a weak demand.
1Q 2013 and Full-Year 2013 Outlook
In early 2013 the Russian division sees a strong order backlog for the
beginning of the year, particularly in OCTG and line pipe, as a result of
growing E&P activity of oil and gas companies. However, the drilling
environment in the U.S. and economic conditions in Europe remain
challenging, and therefore the Company conservatively expects the results
of the first quarter of 2013 to be in line with the results of the fourth
quarter of 2012.
Given the anticipated improvements in the subsequent quarters of 2013 the
Company expects to compensate slower pace of the first quarter of 2013 with
better operational performance for the remainder of the year and full-year
2013 results to be in line with the results of the full-year 2012 with some
upside potential.
Full-Year 2012 IFRS Financial Statements are available at:
http://www.tmk-group.com/files/IFRS_TMK_y2012.pdf
For further information regarding TMK please visit www.tmk-group.com or
contact:
TMK IR Department:
Marina Badudina
Tel: +7 (495) 775-7600
Farand Pawlak
Tel: +1 (630) 874-6442
IR(at)tmk-group.com
TMK PR Department:
Ilya Zhitomirsky
Tel: +7 (495) 775-7600
PR(at)tmk-group.com
TMK (www.tmk-group.com)
TMK is a leading global manufacturer and supplier of steel pipes for the
oil and gas industry, operating about 30 production sites in the United
States, Russia, Canada, Romania, Oman, UAE and Kazakhstan, and two R&D
centres in Russia and the USA. In 2012, TMK's pipe shipments totaled 4.24
million tonnes. The largest share of TMK's sales belongs to high margin oil
country tubular goods (OCTG), shipped to customers in 85 countries. TMK
delivers its products along with an extensive package of services in heat
treating, protective coating, premium connections threading, warehousing
and pipe repairing.
TMK's ordinary shares are listed on Russia's major stock exchange -
MICEX-RTS. Its GDRs are traded on the London Stock Exchange, and its ADRs -
on the OTCQX International Premier trading platform in the U.S.
End of Corporate News
---------------------------------------------------------------------
06.03.2013 Dissemination of a Corporate News, transmitted by
EquityStory.RS, LLC - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
EquityStory.RS, LLC's Distribution Services include Regulatory
Announcements, Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
---------------------------------------------------------------------
Language: English
Company: OAO TMK
40/2a Pokrovka
105062 Moscow
Russia
Phone: +7 495 775-7600
Fax: +7 495 775-7601
E-mail: tmk(at)tmk-group.com
Internet: tmk-group.com
ISIN: US87260R2013
End of News EquityStory.RS, LLC News-Service
---------------------------------------------------------------------
203123 06.03.2013
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 06.03.2013 - 09:38 Uhr
Sprache: Deutsch
News-ID 236416
Anzahl Zeichen: 14464
contact information:
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 277 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"DGAP-News: TMK ANNOUNCES 4Q 2012 AND FULL-YEAR 2012 IFRS RESULTS"
steht unter der journalistisch-redaktionellen Verantwortung von
OAO TMK (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
