DGAP-News: TMK Announces 1H 2013 Operational Results
ID: 281318
(firmenpresse) - EquityStory.RS, LLC-News: OAO TMK / Key word(s): Miscellaneous
TMK Announces 1H 2013 Operational Results
24.07.2013 / 14:03
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July 24, 2013 Press Release
TMK Announces 1H 2013 Operational Results
The following contains forward looking statements concerning future events.
These forward looking statements are based on current information and
assumptions of TMK management concerning known and unknown risks and
uncertainties.
TMK (LSE: TMKS), a leading global manufacturer and supplier of steel pipes
for the oil and gas industry, announces its operational results for the
first half of 2013.
2Q 2013 and 1H 2013 Highlights
- TMK shipped a total of 2,140 thousand tonnes of steel pipe to customers
in the first half of 2013, up 2% year-on-year. Shipments in the second
quarter of 2013 also grew by 2% quarter-on-quarter.
- In the first half of 2013, seamless pipe shipments fell by 1%
year-on-year to 1,244 thousand tonnes. Shipments in the second quarter
of 2013 also fell by 1% quarter-on-quarter to 619 thousand tonnes.
- Welded pipe shipments rose by 6% year-on-year, reaching 896 thousand
tonnes in the first half of 2013 driven, among other factors, by a
rising demand for large diameter pipe (LDP) and line pipe from Russian
consumers. Second quarter shipments were up by 7% compared to the first
quarter of 2013.
- Total shipments of OCTG, TMK's core product, increased by 1%
year-on-year and in the second quarter were up by 7% compared to the
previous quarter.
- Shipments of premium connections rose to 370 thousand joints for the
first half of 2013, up 22% year-on-year and 26% quarter-on-quarter.
2Q 2013 and 1H 2013 Summary Results
(thousand tonnes)
Product 2Q 1Q Q-o-Q, % 1H 1H Y-o-Y, %2Q 2013 and 1H 2013 Market Overview and Performance by Division
2013 2013 2013 2012
Seamless Pipe
619 625 -1.0% 1,244 1,259 -1.2%
Welded Pipe
464 433 7.2% 896 846 5.9%
Total
1,083 1,058 2.4% 2,140 2,105 1.7%
including
OCTG 464 434 6.9% 898 892 0.7%
Russian Division
In January-June 2013, TMK's Russian division shipped 1,508 thousand tonnes
(1) of pipes, up 4% year-on-year. In the second quarter of 2013, shipments
remained almost flat at 753 thousand tonnes compared to the previous
quarter.
LDP shipments rose by 11% year-on-year and 4% quarter-on-quarter, driven by
both TMK's involvement in supplies for the construction of the Russian
onshore section of the South Stream pipeline and by growing shipments to
CIS countries.
Due to increasing oilfield-to-storage transportation demands in Russia, in
the first half of 2013, TMK's Russian division increased shipments of
seamless and welded line pipe by 7% and 37% year-on-year, respectively,
with no substantial year-on-year or quarter-on-quarter change in seamless
OCTG shipments.
Shipments in the welded and seamless industrial pipe segments suffered a
general year-on-year decline due to a shrinking market but in the second
quarter of 2013 were up by 22% and 11% quarter-on-quarter, respectively,
driven by a reviving demand from the machine building and construction
industries.
(1) This includes shipments from TMK's Russian facilities, TMK-Kaztrubprom
and GIPI to the Russian, CIS and non-CIS markets (excluding the North
American market).
American Division
In the first half of 2013, shipments by the American division decreased by
3% year-on-year to 554 thousand tonnes (2). In the second quarter of 2013,
shipments improved by 11% quarter-on-quarter, driven by targeted market
sales of line pipe and OCTG.
Despite stronger commodity prices, the Baker Hughes US rig count in the
first half of 2013 compared to the second half of 2012 decreased by 5% to
an average of 1,760 while year-over-year the US rig count was down 11% from
an average of 1,981 for the first half of 2012. In the first half of 2013,
the oil rig count averaged 77% of the total US rig count versus 66% in the
first half of 2012. In the second half of 2013 the natural gas rig count is
expected to decline further due to seasonal influences. The trend of rigs
drilling horizontally and directionally will, however, support OCTG
consumption.
Market import volumes remain a high percentage of supply in the U.S. In
July, TMK IPSCO and eight other domestic producers filed a petition for the
imposition of anti-dumping and countervailing duties against oil country
tubular goods from nine countries. However, due to the length of the
investigation process, import supply in the second half of 2013 is not
expected to be significantly affected by the submitted petition.
(2) This includes products manufactured by TMK's Russian and Romanian
facilities and sold on the North American market.
European Division
Throughout 2013, the European market environment was deteriorating month by
month, becoming ever more critical at the end of the second quarter. The
shrinking number of active projects coupled with investor pessimism
resulted in lower consumption of tubular goods. This spring saw no demand
revival, historically driven by the construction business resumption, since
the construction industry was hit worst of all by a dramatic decline in
private and public investments in infrastructure and other projects. Over
the recent months, this environment has been pressing prices for tubular
goods further downward.
Against this challenging economic environment, TMK's European division
shipped 78 thousand tonnes of pipe in the first half of 2013, down 4%
year-on-year. Shipments in the second quarter of 2013 fell by 5%
quarter-on-quarter to 38 thousand tonnes.
Premium Segment
In the first half of 2013, overall demand for TMK's premium connections
continued to grow. TMK shipped a total of 370 thousand premium connections
in the first half of 2013, up 22% year-on-year. In the second quarter of
2013, shipments of premium connections grew by 26% quarter-on-quarter.
Expanding its services capabilities, in April 2013 TMK acquired a 100%
interest in pipe services and precision manufacturing assets located
north-east of Houston with an annual production capacity of more than 700
thousand joints of threaded pipe and around 250 thousand couplings. In
addition, the facility provides pipe inspection services and manufactures
down-hole tools and accessories for a wide range of oil and gas
applications.
Outlook
The Company confirms the earlier announced expectations that the Russian
division will continue to see a strong demand for OCTG and line pipe in
2013 as Russian oil and gas players fulfill their production plans. The LDP
segment is expected to remain flat in the second half of 2013.
The Company maintains its positive long-term U.S. market outlook. TMK
expects that the challenging pricing environment, which is likely to have a
significant influence on TMK IPSCO's financial results in the first half of
2013, will be gradually improving in 2013 by the year end.
The Company believes that neither noticeable upturn nor stabilization in
the European market will be seen before the end of the third quarter of
2013.
In general, the Company confirms its cautiously positive outlook for the
current year and expects 2013 shipments to be at least the same as in 2012.
***
For further information regarding TMK please visit www.tmk-group.com or
download the YourTube iPad application from the App Store
https://itunes.apple.com/ru/app/yourtube/id516074932?mt=8&ls=1
***
TMK (www.tmk-group.com)
TMK (LSE: TMKS) is a leading global manufacturer and supplier of steel
pipes for the oil and gas industry, operating 28 production sites in the
United States, Russia, Canada, Romania, Oman, UAE, and Kazakhstan and two
R&D centers in Russia and the USA. In 2012, TMK's pipe shipments totaled
4.22 million tonnes. The largest share of TMK's sales belongs to high
margin oil country tubular goods (OCTG), shipped to customers in over 80
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 securities are listed on the London Stock Exchange, the OTCQX
International Premier trading platform in the U.S. and on the Moscow
Exchange MICEX-RTS.
TMK's production assets structure:
Russian division: American division:TMK Corporate Communications
Volzhsky Pipe Plant; 12 plants of TMK IPSCO;
Seversky Tube Works; OFS International LLC.
Taganrog Metallurgical European division:
Works; TMK-ARTROM;
Sinarsky Pipe Plant; TMK-RESITA.
TMK-CPW; Middle East Division:
TMK-Kaztrubprom; TMK GIPI (Oman);
TMK-INOX; Threading&Mechanical Key Premium LLC (Abu-
TMK-Premium Service; Dhabi).
TMK Oilfield Services.
Ilya Zhitomirsky
Tel: +7 (495) 775-7600
E-mail: pr(at)tmk-group.com
End of Corporate News
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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
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