DGAP-News: TMK Announces 9M 2013 Operational Results
ID: 310097
(firmenpresse) - EquityStory.RS, LLC-News: OAO TMK / Key word(s): Miscellaneous
TMK Announces 9M 2013 Operational Results
29.10.2013 / 09:16
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October 29, 2013 Press Release
TMK Announces 9M 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 nine
months of 2013.
3Q 2013 and 9M 2013 Highlights
- TMK shipped a total of 3,200 thousand tonnes of steel pipe to customers
in the first nine months of 2013, up 1.7% year-on-year, on the back of
stronger demand for welded OCTG pipe and large diameter pipe (LDP).
Shipments fell by 2.1% quarter-on-quarter.
- Seamless pipe shipments fell by 2.8% year-on-year to 1,807 thousand
tonnes in the first nine months of 2013. Shipments fell by 9.0%
quarter-on-quarter to 563 thousand tonnes due to scheduled repair of
rolling mills at Seversky Tube Works and Volzhsky Pipe Plant.
- Welded pipe shipments rose by 8.3% year-on-year up to 1,393 thousand
tonnes in the first nine months of 2013, mainly driven by increasing
demand for LDP and line pipe from Russian customers as well as welded
OCTG in the USA. Compared to the second quarter of 2013, the third
quarter welded pipe shipments were up by 7.1%.
- Total OCTG shipments, TMK's core product, increased by 4.2%
year-on-year, but were down 4.1% quarter-on-quarter.
- Shipments of premium connections totalled 573 thousand joints in the
first nine months of 2013, up 22.7% year-on-year. Shipments were down
1.9% quarter-on-quarter.
3Q 2013 and 9M 2013 Summary Results
(thousand tonnes)
Product 3Q 2Q Q-o-Q, % 9M 9M Y-o-Y, %3Q 2013 and 9M 2013 Market Overview and Performance by Division
2013 2013 2013 2012
Seamless Pipe
563 619 -9.0% 1,807 1,860 -2.8%
Welded Pipe
497 464 7.1% 1,393 1,286 8.3%
Total
1,060 1,083 -2.1% 3,200 3,146 1.7%
including
OCTG 445 464 -4.1% 1,343 1,290 4.2%
Russian Division
In the first nine months 2013, TMK's Russian division shipped 2,239
thousand tonnes(1), up 1.9% year-on-year. Shipments fell by 2.9% to 731
thousand tonnes quarter-on-quarter.
In the first nine months of 2013, LDP shipments totalled 350 thousand
tonnes, up 12% year-on-year, but down 7.0% quarter-on-quarter, mainly due
to some pipeline projects being finalised in the first half of 2013 and,
for new projects, postponed to a later date.
Due to ever increasing oilfield-to-storage transportation demands in
Russia, TMK's Russian division saw a rise in welded line pipe shipments by
24.4% year-on-year and by 14.5% quarter-on-quarter while shipments of
seamless OCTG pipe remained almost flat year-on-year but down 10.2%
quarter-on-quarter as a result of the scheduled repair of rolling mills at
the Russian plants mentioned above.
Shipments in the welded and seamless industrial pipe segments were in line
with theprevious year but increased quarter-on-quarter by 25.8% and 8.0%,
respectively, driven by a rising demand from the machine building and
construction industries in the third quarter of 2013.
(1) This includes shipments from TMK's Russian facilities, TMK-Kaztrubprom
and TMK GIPI to the Russian, CIS and non-CIS markets (excluding the North
American market).
American Division
TMK's American division shipped 848(2) thousand tonnes in the first nine
months of 2013, up 1.4% year-on-year, and 294 thousand tonnes in the third
quarter of 2013, which is slightly above the second quarter results.
Shipments of premium connections and OCTG also improved quarter-on-quarter
by 7% and 4%, respectively.
Commodity prices experienced in the second quarter of 2013 influenced the
Baker Hughes rig activity in the third quarter. Higher gas prices in the
second quarter saw the U.S. natural gas rig count increase 6% in the third
quarter of 2013 compared to the second quarter of 2013 whereas lower crude
oil prices in the second quarter were reflected in a slight decline in oil
rig count by 1%, netting a third quarter average rig count of 1,770 in
2013, up 1% quarter-on-quarter. Year-on-year the U.S. rig count was down 7%
from an average of 1,906 for the third quarter of 2012. In the third
quarter of 2013, the vertical rig count continued to slowly decline to 25%
of the total U.S. rig count, as directional and horizontal rigs together
amounted to 75% of the total rig count, up 3% year-on-year. More
horizontal and directional drilling helps support OCTG consumption despite
a lower rig count. The trend of improving drilling efficiencies continued
as operators drilled more wells in less time and at greater depths.
Market demand for industrial products has remained stable compared to prior
quarter, but down from a year ago. Total import volumes have increased
quarter-on-quarter, but are lower than last year. Latest market reports
show OCTG import volumes have not significantly changed since the filing of
the trade case against nine countries.
(2) This includes products manufactured by TMK's Russian and Romanian
facilities and sold on the North American market.
European Division
In the third quarter of 2013, the European market environment continued to
be challenging. The shrinking number of active projects coupled with
investor pessimism resulted in lower consumption of tubular goods while
also putting negative pressure on prices for industrial pipe.
However, shipments in TMK's European division remained almost flat
year-on-year at 113 thousand tonnes and fell by 8.4% quarter-on-quarter to
35 thousand tonnes.
Premium Segment
In the reporting period, overall demand for TMK's premium connections
continued to grow. TMK shipped a total of 573 thousand joints, up 22.7%
year-on-year, but down 1.9% quarter-on-quarter.
In the USA shipments of TMK's premium connections continued to increase as
operators look for better performance than API connections in drilling non
vertical wells.
TMK's premium products were first used in Russia in a hydraulic fracturing
project, with TMK acting as a supplier of tubular goods (tubing and
coupling with TMK FMT premium connections) and related services at the
Davydovskoye oil field operated by Orenburgneft, a Rosneft subsidiary. In
August 2013, TMK's casing pipes with TMK PF premium connections were
qualified by ONGC, India's state oil and gas company, and ADCO, one of the
largest oil companies in the Middle East.
Outlook
The Company confirms the earlier announced expectations that the Russian
division will continue to see a strong demand for OCTG and line pipe until
the end of 2013 as Russian oil and gas players fulfill their production
plans.
The Company maintains its positive long-term U.S. market outlook. TMK
expects the challenging pricing environment to continue through the end of
the year as import inventories continue to apply downward pressure on
prices. The positive preliminary decision in the OCTG trade case announced
August 16 and subsequent price increases are expected to begin to be
reflected in improving transaction prices in Q4 and carryover into Q1 2014.
In general, the Company confirms its cautiously positive outlook for the
physical volumes in 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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