DGAP-News: TMK Announces 3Q 2013 and 9M 2013 IFRS Results
ID: 320281
(firmenpresse) - EquityStory.RS, LLC-News: OAO TMK / Key word(s): Miscellaneous
TMK Announces 3Q 2013 and 9M 2013 IFRS Results
26.11.2013 / 10:28
---------------------------------------------------------------------
TMK ANNOUNCES 3Q 2013 AND 9M 2013 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 interim
consolidated IFRS financial results for the nine months ending September
30, 2013.
Summary 3Q 2013 and 9M 2013 Results
(In millions of U.S.$, unless stated otherwise)
3Q 2Q Chang- 9M 9M Chang-Note: Certain monetary amounts, percentages and other figures included in
2013 2013 e, % 2013 2012 e, %
Sales volumes, thousand 1,022 1,117 -9% 3,197 3,156 1%
tonnes
Revenue 1,487 1,649 -10% 4,861 5,056 -4%
Gross profit 283 355 -20% 1,007 1,152 -13%
Income before tax 54 61 -12% 227 351 -36%
Net income 35 40 -13% 160 250 -36%
Earnings per GDR(1), basic, 0.16 0.20 -20% 0.76 1.16 -34%
U.S.$
Adjusted EBITDA(2) 182 250 -27% 705 809 -13%
Adjusted EBITDA margin, % 12% 15% 14% 16%
this press release are subject to rounding adjustments. Totals therefore do
not always add up to exact arithmetic sums.
(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 (except for provision for bonuses), (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.
In the first quarter of 2013, management amended its definition of Adjusted
EBITDA. For the updated methodology please refer to the Financial
Statements for the three-months period ended March 31, 2013.
3Q 2013 Highlights
Sales
Sales (thousand tonnes) 3Q 2013 2Q 2013 Change,- Total pipe sales decreased by 9% quarter-on-quarter to 1,022 thousand
%
Seamless 534 645 -17%
Welded 488 472 3%
Total 1,022 1,117 -9%
tonnes, mainly due to a reduction in OCTG and line pipe sales in
Russia.
- Seamless pipe sales decreased by 17% compared to the prior quarter and
amounted to 534 thousand tonnes. Seamless OCTG pipe volumes fell by 17%
quarter-on-quarter due to seasonally lower demand from oil and gas
producers and performance of traditionally preplanned general overhauls
at the Russian plants.
- Welded pipe sales grew by 3% from the prior quarter to 488 thousand
tonnes mostly due to welded industrial and OCTG pipe volumes growth.
Financials
- Revenue for the third quarter was $1,487 million, a decrease of 10%
over the second quarter of 2013, mainly due to lower sales of seamless
pipe primarily in the Russian division and a negative effect of
currency translation.
- Adjusted EBITDA decreased by 27% quarter-on-quarter to $182 million due
to reduction of seamless pipe volumes in the Russian division as a
result of seasonally lower demand and general overhauls. Adjusted
EBITDA margin was 12%.
- Net income was $35 million for the third quarter, as compared to $40
million in the second quarter of 2013. Net income margin was 2% for the
third quarter of 2013.
- As of September 30, 2013, total debt remained almost flat compared to
the level as of June 30, 2013 and amounted to $3,775 million. TMK's
weighted average nominal interest rate amounted to 6.77% as of
September 30, 2013 as compared to 6.67% as of June 30, 2013.
9M 2013 Highlights
Sales
Sales (thousand tonnes) 9M 2013 9M 2012 Change,- Total pipe sales grew by 1% to 3,197 thousand tonnes compared to the
%
Seamless 1,805 1,876 -4%
Welded 1,392 1,280 9%
Total 3,197 3,156 1%
first nine months of 2012, mainly due to higher volumes of LD pipe in
the Russian division and welded OCTG pipe in the American division.
- Seamless pipe sales decreased by 4% compared to the first nine months
of 2012 and amounted to 1,805 thousand tonnes due to lower volumes in
the Russian and European divisions. Seamless OCTG pipe volumes slightly
decreased by 1% year-on-year.
- Welded pipe sales increased by 9% year-on-year to 1,392 thousand tonnes
largely as a result of higher volumes of large diameter (LD) and welded
OCTG pipe.
Financials
- Revenue decreased by 4% year-on-year to $4,861 million mainly due to
weaker results of the American and European divisions and a negative
effect of currency translation.
- Adjusted EBITDA decreased by 13% year-on-year to $705 million
negatively affected by weaker pricing and an unfavorable sales mix
mostly in the American and European divisions. Adjusted EBITDA margin
amounted to 14% for the first nine months of 2013.
- Net income was $160 million for the first nine months of 2013 as
compared to $250 million for the first nine months of 2012, as a result
of a decrease in gross profit partially offset by lower operating
expenses and finance costs.
- As of September 30, 2013, total debt decreased by $110 million to
$3,775 million compared to $3,885 million as of December 31, 2012
mainly due to the Rouble's depreciation against the U.S. dollar. Net
repayment of the debt amounted to $28 million for the first nine months
of 2013. TMK's weighted average nominal interest rate decreased by 22
basis points to 6.77% as of September 30, 2013 compared to December 31,
2012.
- Net debt increased by $42 million in the first nine months of 2013
compared to the level as of December 31, 2012 and amounted to $3,698
million as of September 30, 2013. The Net Debt-to-EBITDA ratio was
4.0x.
Recent Developments
- In August 2013, TMK received an official notice of product approval
from Abu Dhabi Company for Offshore Oil Operations (ADCO). Volzhsky
Pipe Plant (VTZ), a TMK subsidiary, was acknowledged by ADCO as an
approved vendor of threaded pipes with TMK PF premium connections.
- In August 2013, TMK launched its new state-of-the-art electric arc
furnace at Tagmet. In November 2013, the Company shut down its last
open-hearth furnace.
- In October 2013, TMK completed shipmentsof tubular products for the
construction of deep water pipelines at the Lukoil's Filanovsky oil and
gas condensate field in the North Caspian Sea.
- In October 2013, TMK completed its contract shipments of LD pipe for
the international pipeline Central Asia - China in the amount of more
than 100 thousand tonnes of longitudinal LD pipe with external and
inner coating.
- In November 2013, the Extraordinary General Meeting of Shareholders
voted to approve interim dividends for the first six months of 2013 in
the amount of RUR1.04 per share (approximately USD 0.13 per GDR). A
total of RUR 975,089,537.76 (approximately USD 30.0 mln) will be paid
out as dividend by January 10, 2014.
3Q and 9M 2013 Segment Results
(In millions of U.S.$, unless stated otherwise)
3Q 2Q Chang- 9M 9M Chang-Russia
2013 2013 e, % 2013 2012 e, %
Sales volumes (thousand
tonnes)
Russia 719 820 -12% 2,325 2,333 0%
Americas 263 255 3% 746 692 8%
Europe 41 42 -3% 126 131 -4%
Revenue
Russia 998 1,164 -14% 3,439 3,501 -2%
Americas 426 413 3% 1,208 1,298 -7%
Europe 63 72 -13% 214 257 -17%
Gross Profit
Russia 212 290 -27% 824 847 -3%
Americas 58 50 17% 145 243 -40%
Europe 12 14 -14% 38 62 -38%
Adjusted EBITDA
Russia 134 208 -36% 588 571 3%
Americas 42 33 26% 95 195 -51%
Europe 7 9 -23% 21 43 -51%
3Q 2013 Highlights
In the third quarter of 2013, revenue decreased by 14% to $998 million from
the prior quarter mainly due to a decrease in seamless pipe sales due to
seasonal factor coupled with the general overhauls at some plants. Beside
this, at Seversky pipe plant general overhauls ran simultaneously with the
installation of FQM pipe rolling mill, that resulted in prolonged repair
works. Revenue for the Russian division was also impacted by a negative
effect of currency translation.
Gross profit for the third quarter of 2013 declined by 27%
quarter-on-quarter to $212 million largely due to decrease in seamless OCTG
and line pipe sales, an unfavorable product mix of welded pipe sales and a
negative effect of currency translation. Gross profit margin was 21%.
Adjusted EBITDA for the third quarter of 2013 decreased by 36% from the
prior quarter to $134 million following a decline in gross profit. Adjusted
EBITDA margin decreased to 13% in the third quarter of 2013 from 18% in the
prior quarter of 2013.
9M 2013 Highlights
For the first nine months of 2013, revenue decreased by 2% to $3,439
million mainly due to a negative effect of currency translation and lower
seamless pipe sales. A decline in revenue was partially offset by higher
LD pipe sales primarily for Central Asia-China and Northern Caspian
pipelines.
Gross profit for the first nine months of 2013 decreased by 3% year-on-year
to $824 million mainly as a result of lower pricing and unfavorable product
mix of welded pipe, which was partially offset by higher volumes. Gross
profit margin remained almost flat compared to the first nine months of
2012 and amounted to 24%.
For the first nine months of 2013, adjusted EBITDA increased by 3%
year-on-year to $588 million due to decrease of commercial expenses.
Adjusted EBITDA margin improved to 17% for the first nine months of 2013,
from 16% for the first nine months of 2012.
Americas
3Q 2013 Highlights
In the third quarter of 2013, revenue increased by 3% from the prior
quarter to $426 million, primarily driven by higher seamless pipe volumes
and better product mix.
Gross profit for the third quarter of 2013 increased by 17%
quarter-on-quarter to $58 million mostly due to a favorable sales mix of
seamless pipe. Gross profit margin improved to 14% in the third quarter of
2013 from 12% in the second quarter of 2013.
In the third quarter of 2013, adjusted EBITDA grew by 26% to $42 million
compared to the prior quarter mainly as a result of higher gross profit.
Adjusted EBITDA margin improved to 10% in the third quarter of 2013, from
8% in the second quarter of 2013.
9M 2013 Highlights
For the first nine months of 2013, revenue decreased by 7% year-on-year to
$1,208 million mainly due to the deterioration of the pricing environment
in the U.S. following an increase in import volumes.
Gross profit for the first nine months of 2013 declined by 40% year-on-year
to $145 million primarily due to weaker pricing in welded and seamless
pipe, not fully offset by lower raw materials prices. Gross profit margin
decreased to 12% for the first nine months of 2013 from 19% for the first
nine months of 2012.
Adjusted EBITDA for the first nine months of 2013 declined by 51%
year-on-year to $95 million mainly due to significantly lower gross profit.
Adjusted EBITDA margin fell to 8% for the first nine months of 2013, from
15% for the first nine months of 2012.
Europe
3Q 2013 Highlights
In the third quarter of 2013, revenue decreased by 13% from the prior
quarter to $63 million largely due to lower sales of steel billets.
Gross profit for the third quarter of 2013 decreased by 14%
quarter-on-quarter to $12 million due to decline in steel billets sales
coupled with unfavorable pricing of seamless pipe. Gross profit margin
decreased to 19% in the third quarter of 2013 from 20% in the second
quarter of 2013.
Adjusted EBITDA in the third quarter of 2013 decreased by 23%
quarter-on-quarter to $7 million mostly due to lower gross profit. Adjusted
EBITDA margin in the third quarter of 2013 declined to 11% against 12% in
the prior quarter.
9M 2013 Highlights
For the first nine months of 2013, revenue decreased by 17% year-on-year to
$214 million as a result of a weaker pricing and an unfavorable sales mix.
Gross profit for the first nine months of 2013 declined by 38% year-on-year
to $38 million as falling average selling prices of pipe products outpaced
falling scrap prices. Gross profit margin decreased to 18% for the first
nine months of 2013 from 24% for the first nine months of 2012.
Adjusted EBITDA for the first nine months of 2013 fell by 51% year-on-year
to $21 million largely as a result of a decrease in gross profit. Adjusted
EBITDA margin for the first nine months of 2013 decreased to 10% from 17%
for the first nine months of 2012.
3Q and 9M 2013 Market Conditions
Russia
In the third quarter of 2013, the Russian pipe market slightly increased by
1% from the prior quarter mainly as a result of higher welded pipe
consumption still being negatively affected by decreased demand for
seamless pipe due to seasonality. For the first nine months of 2013, the
Russian pipe market increased by 5% year-on-year largely due to higher
consumption of oil and gas pipe grades supported by a high level of
drilling activity, e.g. amount of meters drilled increased by 5%
year-on-year.
Demand for seamless OCTG and line pipe declined in the third quarter of
2013 over the prior quarter by 21% and 14% respectively in majority due to
seasonally lower consumption of oil and gas grades. At the same time for
the first nine months of 2013 consumption of seamless OCTG and line pipe
increased significantly year-on-year by 22% and 4% respectively, supported
by growth of drilling activity in Russia, including steady development of
unconventional drilling.
The LD pipe market in Russia in the third quarter of 2013 decreased by 9%
compared to the prior quarter. For the first nine months of 2013 LD pipe
market in Russia declined by 5% year-on-year. Both periods were negatively
affected by completion of some major pipeline projects and postponement of
construction of the new ones.
In the third quarterof 2013, the seamless and welded industrial pipe
market in Russia grew by 21% and 11% over the prior quarter respectively,
impacted by seasonally high demand from machinery and construction
industry. For the first nine months of 2013, seamless industrial pipe
market declined by 6% year-on-year due to weaker consumption in the
machinery industry after Russia's entrance into WTO. For the first nine
months of 2013, welded industrial pipe market increased by 5% year-on-year
due to higher construction activity in Russia.
Americas
In the first nine months of 2013 commodity prices have increased compared
to the same period of 2012 with natural gas prices improving year-over-year
to average $3.69/MMbtu. According to Baker Hughes, the natural gas rig
count gained 21 rigs or 6% in the third quarter 2013. The U.S. rig count
averaged 1,770 compared to 1,761 in the second quarter of 2013, but on a
nine-month comparison was lower at 1,763 in 2013 versus 1,955 in 2012.
Through continued improvement in drilling efficiencies, the number of
onshore wells per rig increased 6% to average 5.21 wells per rig from 4.92
wells per rig in 2012.
Though the rig count declined, more pipe per rig was used as operators
trend toward more horizontal and directional drilling. However, slight
gains in OCTG consumption did not outpace the increased volume of total
shipments which resulted in a quarter-on-quarter increase of inventory. The
third quarter averaged 5.7 months of inventory, a level that was last
reached in the third quarter of 2010, according to Preston Pipe and Tube.
Increased supply and low priced imports, particularly from South Korea
continued to apply downward pressure on pricing levels. Year-on-year the
average composite market price for OCTG seamless and welded products were
down 9% and 10% respectively (Pipe Logix). Prices stabilized in the third
quarter as OCTG price composites for both seamless and welded products were
flat following the filing of unfair trade cases against nine countries.
Pending a favorable outcome of the OCTG anti-dumping investigation, prices
for this product would likely improve as domestic mills will have a level
market. Line pipe shipments were challenged with low demand as shipments
decreased nearly 9% year-over-year. Prices also decreased for welded and
seamless, imported and domestic line pipe categories, according to Pipe
Logix. The third quarter industrial pipe shipments were down with
mechanical and line pipe demand decreasing the most.
Europe
Throughout the first nine months of 2013, the European market environment
remained challenging. End-users continued to focus on spot orders
anticipating more favorable payment terms. Lower number of active projects
coupled with investor pessimism resulted in decreasing consumption of
tubular goods which also put negative pressure on prices for industrial
pipe. Increased competition, resulting from lower exports by the European
companies, also negatively affected the pricing environment.
4Q and FY 2013 Outlook
In the fourth quarter of 2013, the Company observes a recovery on its main
markets. In particular, seamless OCTG and line pipe sales in the Russian
division are growing. LD pipe volumes are expected to be higher compared to
the third quarter of 2013 due to TMK's supply to Gazprom's South Corridor
project. In the U.S. TMK expects volumes to continue to increase as
drilling operations in Canada ramp up for the winter season and colder
weather in the U.S. supports natural gas prices. Overall, TMK believes that
the fourth quarter results will significantly exceed the results of the
third quarter of 2013.
3Q / 9M 2013 IFRS Financial Statements are available at:
http://www.tmk-group.com/files/IFRS_TMK_9m2013_USD.pdf
3Q / 9M 2013 IFRS Results Conference Call:
TMK's management will hold a conference call to present the third quarter /
nine months 2013 financial results today, November 26, 2013, at 09:00 New
York / 14:00 London / 18:00 Moscow.
To join the conference call please register on-line
https://eventreg1.conferencing.com/webportal3/reg.html?Acc=975352&Conf=188
954
or dial:
International call-in Number: +44 20 7162 0025
US call-in Number: +1 334 323 6201
Conference ID: 939118
(We recommend that participants register on-line to avoid waiting in a
queue or to start dialing in 5-10 minutes prior to ensure a timely start to
the conference call)
The conference call replay will be available through November 29, 2013:
UK replay number: +44 20 7031 4064
US toll replay number: +1 954 334 0342
Replay access code: 939118
***
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
or contact:
TMK IR Department:
Marina Badudina
Tel: +7 (495) 775-7600
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 (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:End of Corporate News
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.
---------------------------------------------------------------------
26.11.2013 Dissemination of a Corporate News, transmitted by
EquityStory.RS, LLC - a company of EQS Group 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
---------------------------------------------------------------------
241684 26.11.2013
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 26.11.2013 - 10:28 Uhr
Sprache: Deutsch
News-ID 320281
Anzahl Zeichen: 6714
contact information:
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 261 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"DGAP-News: TMK Announces 3Q 2013 and 9M 2013 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).
