18.08.2017, 12:00
TMK Announces 2Q and 1H 2017 IFRS Results
Source: TMK
OREANDA-NEWS. PAO TMK («TMK» or «the Group»), one of the world’s leading producers of tubular products for the oil and gas industry, today announces its interim consolidated IFRS financial results for the six months ended June 30, 2017.
2Q and 1H 2017 Highlights
Financial
- 2Q Revenue up 17% q-o-q at $1,107m, 1H Revenue at $2,050m, up 27% y-o-y
- 2Q Adjusted EBITDA at $134m, down 6% q-o-q, and at $275m for 1H, up 2% y-o-y
- 2Q Adjusted EBITDA margin at 12% and 13% for 1H
- Net loss of $19m in 2Q and net profit of $23m for 1H
- Net debt at $2,567m as of June 30, 2017
- Continued improvement at the American division, with Adjusted EBITDA at $30m in 1H 2017 (1H 2016: $(54)m)
Developments
- In May 2017, TMK expanded its range of austenitic steel grade welded corrosion-resistant pipes to include 114 mm diameter pipes for high pressure applications able to withstand highly corrosive environments.
- In June 2017, TMK and Rosneft signed 5.5-year long-term contracts for the supply of casing and tubing pipes, based on a price-formula that factors in raw material prices and inflation. During the contract term, TMK’s products will account for 50% of Rosneft’s total casing and tubing pipe purchases.
- In June 2017, TMK placed a 10 billion Rouble 10-year bond with a 9.35% coupon.
- On June 8, 2017, payment of annual dividends in the amount of RUB2,025 million ($36 million at the exchange rate at the date of approval) or RUB1.96 per ordinary share ($0.03 per ordinary share) was approved at TMK’s Annual General Meeting of Shareholders.
- In June 2017, TMK launched beta testing of TMK eTrade, the first tubular goods Internet shop in Russia. Via TMK eTrade customers in Russia can quickly and easily place orders for pipes from any of TMK's Russian plants, track their orders, calculate the delivery cost and obtain required documentation.
- In July 2017, TMK was the first Russian company to start producing casing pipes from the corrosion-resistant chromium-nickel alloy TMK-C. The first lot of 110 grade TMK-C pipe with TMK UP PF highly gas-tight premium threaded connections was produced at TAGMET and shipped to LUKOIL.
Outlook
- TMK anticipates higher EBITDA in 2H 2017 driven by a significantly improved performance of the American division and stable results at the Russian division. The Company reiterates its guidance for FY 2017 of broadly flat margins y-o-y and overall stronger financial results compared to FY 2016.
Alexander Shiryaev, CEO of TMK, said:
«Continued improvement in the US oil and gas market has enabled TMK to benefit from stronger demand and pricing. Drilling activity and E&P spending in the US continue to grow and alongside our stable performance in Russia, this will support stronger Group EBITDA in the second half.
Meanwhile, TMK remains focused on developing innovative solutions for its major global E&P customers, and in 1H 2017 this included the launch of a unique corrosion-resistant casing pipe «TMK-C» and Russia’s first online retail platform for tubular goods.
We remain confident that our unique, high value product offering and leading positions in our key markets will support margins for the full year, and repeat our guidance of an improved financial performance year on year for FY 2017.»
2Q and 1H 2017 Highlights
Financial
- 2Q Revenue up 17% q-o-q at $1,107m, 1H Revenue at $2,050m, up 27% y-o-y
- 2Q Adjusted EBITDA at $134m, down 6% q-o-q, and at $275m for 1H, up 2% y-o-y
- 2Q Adjusted EBITDA margin at 12% and 13% for 1H
- Net loss of $19m in 2Q and net profit of $23m for 1H
- Net debt at $2,567m as of June 30, 2017
- Continued improvement at the American division, with Adjusted EBITDA at $30m in 1H 2017 (1H 2016: $(54)m)
Developments
- In May 2017, TMK expanded its range of austenitic steel grade welded corrosion-resistant pipes to include 114 mm diameter pipes for high pressure applications able to withstand highly corrosive environments.
- In June 2017, TMK and Rosneft signed 5.5-year long-term contracts for the supply of casing and tubing pipes, based on a price-formula that factors in raw material prices and inflation. During the contract term, TMK’s products will account for 50% of Rosneft’s total casing and tubing pipe purchases.
- In June 2017, TMK placed a 10 billion Rouble 10-year bond with a 9.35% coupon.
- On June 8, 2017, payment of annual dividends in the amount of RUB2,025 million ($36 million at the exchange rate at the date of approval) or RUB1.96 per ordinary share ($0.03 per ordinary share) was approved at TMK’s Annual General Meeting of Shareholders.
- In June 2017, TMK launched beta testing of TMK eTrade, the first tubular goods Internet shop in Russia. Via TMK eTrade customers in Russia can quickly and easily place orders for pipes from any of TMK's Russian plants, track their orders, calculate the delivery cost and obtain required documentation.
- In July 2017, TMK was the first Russian company to start producing casing pipes from the corrosion-resistant chromium-nickel alloy TMK-C. The first lot of 110 grade TMK-C pipe with TMK UP PF highly gas-tight premium threaded connections was produced at TAGMET and shipped to LUKOIL.
Outlook
- TMK anticipates higher EBITDA in 2H 2017 driven by a significantly improved performance of the American division and stable results at the Russian division. The Company reiterates its guidance for FY 2017 of broadly flat margins y-o-y and overall stronger financial results compared to FY 2016.
Alexander Shiryaev, CEO of TMK, said:
«Continued improvement in the US oil and gas market has enabled TMK to benefit from stronger demand and pricing. Drilling activity and E&P spending in the US continue to grow and alongside our stable performance in Russia, this will support stronger Group EBITDA in the second half.
Meanwhile, TMK remains focused on developing innovative solutions for its major global E&P customers, and in 1H 2017 this included the launch of a unique corrosion-resistant casing pipe «TMK-C» and Russia’s first online retail platform for tubular goods.
We remain confident that our unique, high value product offering and leading positions in our key markets will support margins for the full year, and repeat our guidance of an improved financial performance year on year for FY 2017.»
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