ChelPipe Group Publishes IFRS Financial Results for 1H-2014
OREANDA-NEWS. ChelPipe Group ("ChelPipe" or "the Group"), a leading Russian producer of pipes and supplier of integrated solutions for the oil and gas industry, has published its consolidated IFRS financial results for the six months ended 30 June 2014.
Sales:
In 1H14, overall pipe volume sales totalled 881.8 thousand tonnes, up 9% year-on-year. Sales in Russia amounted to 751 thousand tonnes and exports to 130.8 thousand tonnes.
Volume sales of welded pipes equalled 375.2 thousand tonnes (of which 357 thousand tonnes were large-diameter pipes (LDP)), up 4% year-on-year (1H13: 361.9 thousand tonnes of welded pipes, of which 342.6 thousand tonnes were LDP). The increase was due to deliveries for various pipelines - Gazprom's "Bobanenkovo - Ukhta (second string)" and Southern Corridor projects and Transneft's "Kuyumba - Taishet" project - and greater supplies of LDP for those customers' maintenance needs.
Volume sales of seamless pipes reached 506.6 thousand tonnes, up 13% year-on-year (1H13: 446.5 thousand tonnes of seamless pipes). A rise was seen across all key sales regions: Russia, the wider CIS and further abroad.
Financial results:
Revenues totalled RUB53,964 million, down 3% year-on-year.
Gross profit rose by 17% year-on-year, while EBITDA climbed by 8% to RUB10,393 million. The EBITDA margin increased by 2 percentage points to 19.3%.
Net profit equalled RUB189 million, giving a net margin of 0.3%.
Despite negative economic factors and the situation in the industry, the Group generated a net profit of RUB189 million (compared with a loss of RUB311 million in 1H13) and positive operating cash flow of RUB4,417 million (compared with RUB497 in 1H13). This was due to a reduction in the cost of sales and an increase in sales of high-margin products.
Main events:
In 1H14, ChelPipe took part in numerous major projects in the oil and gas sector, the pipe division supplying products to:
- Gazprom: Southern Corridor, South Stream, "Bobanenkovo - Ukhta" (second string), Puginsky underground gas storage facility
- Rosneft: Yamal and "Suzun - Vankor" projects
- Transneft: Vostok oil pipeline, Sib oil pipeline, "Kuyumba - Taishet", "Zapolyarye - Purpe"
Rimera, the Group's oilfield services division, supplied trunkline equipment produced at SOT and MSA to:
- Gazprom: Southern Corridor, "Bobanenkovo - Ukhta" (second string), Puginsky underground gas storage facility
- Transneft: "Kuyumba - Taishet"
The Group launched production of its own high-margin 139.7x10.54mm welded pipes with premium-class threaded connectors.
ChelPipe successfully passed a pre-qualification audit for supplying LDP to expand the North Stream gas project.
The Group launched serial production of LDP with a three-layer anti-corrosion polyethylene coating based on nano-modified materials from Metakley, a Rosnano project company.
The Pervouralsk Pipe plant launched a facility that produces lime used in steel making and second metallurgy for Iron Ozone 32 seamless pipes, giving it full-cycle production of steel.
Rimera's SOT expanded the range of products supplied to Gazprom to include TU 1469-009-74238272-2011 connectors, which are used to make steel welded connectors for 9.8 MPA trunklines and 16 MPa field pipelines, by passing an inspection by the gas company at its facilities in Magnitogorsk.
As part of a project to modernise its foundry operations, aimed at expanding production capacity and reducing cost of sales, Alnas, Rimera's plant in Almetyevsk, began installing the second stage of a foundry complex made by Germany's Laempe.
Rimera brought service assets Noyabrskaya Central Pipe Base and Rimera-Servis under the single Rimera-Servis brand.
Rimera-Servis won a tender to service more than 560 wells owned by Slavneft-Megionneftegaz for three years.
Rimera concluded a three-year contract with Tatneft to supply products to the Izhneftemash plant.
Vitaly Sadykov was appointed as CEO of the Chelyabinsk Pipe plant.
Events after the reporting period:
From the beginning of 2014 the Group fully repaid the remainder of a loan from Gazprombank and received the equal part of the second tranche of syndicated loan according to the schedule.
In August 2014, ChelPipe redeemed RUB2.5 billion in bonds on schedule.
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