TMK, one of the world's leading producers of tubular products for the oil and gas industry, announces its operational results for the fourth quarter of 2016 and full year 2016.
- TMK shipped 882k tonnes of steel pipe, up 7.4% q-o-q mainly due to an increase in shipments of welded line pipe and seamless OCTG pipe in the Russian division.
- Shipments of seamless pipe increased by 3.1% q-o-q to 633k tonnes. The growth was driven by an increase in shipments of seamless OCTG and industrial pipe.
- Welded pipe shipments were up 20.0% q-o-q to 249k tonnes, mainly due to an increase in shipments of welded line pipe.
- Shipments of OCTG pipe, TMK's core product, were up 2.2% q-o-q to 382k tonnes. The growth was driven by an increase in seamless OCTG shipments.
- Shipments of premium threaded connections were up 18.0% q-o-q to 174k joints, as shipments of premium products grew in the American division on the back of the US pipe market recovery and in Russia thanks to increased horizontal drilling.
- In 4Q 2016, as part of its non-core asset disposal effort to reduce debt, TMK sold TMK CHERMET, a scrap metal business which was part of TMK Group. The asset was sold at enterprise value of 6.2 bln roubles with a significant profit, thus reducing TMK's net debt. The deal will not affect the Company's vertical supply chain. TMK will continue to be supplied with scrap on competitive market conditions. In addition, TMK signed a long-term contract for HBI shipments with Metalloinvest to further diversify feedstock sources and reduce its reliance on scrap metal.
FY 2016 HIGHLIGHTS:
- In 2016, TMK shipped a total of 3,440k tonnes of tubular products, down 11.2% y-o-y. The decline was mainly due to lower welded pipe sales.
- Seamless pipe shipments remained almost flat y-o-y at 2,399k tonnes.
- Welded pipe shipments were 1,042k tonnes, down 28.7% y-o-y, mainly due to lower output across all types of welded pipe at the American division and lower consumption of large-diameter pipe (LDP) in Russia.
- OCTG shipments were down 5.3% to 1,401k tonnes, mostly due to lower demand for welded OCTG in the American market.
- Shipments of premium threaded connections were down 19.6% y-o-y to 550k joints due to new complex hydrocarbon exploration and production projects suspension in North America.