TMK Announces Results for January-March Quarter of 2021
Leading manufacturers of pipes for the oil and gas industry Russian TMK has announced interim consolidated results of operations for the three months
Leading manufacturers of pipes for the oil and gas industry Russian TMK has announced interim consolidated results of operations for the three months ended 31 March 2021. TMK CEO Mr Igor Korytko said “TMK took a major strategic step in the first quarter of 2021 with the acquisition of the ChTPZ Group, which will further strengthen our leading position in the Russian market, expand our product portfolio and opportunities to develop new innovative products, and provide significant synergies to strengthen the Group's position. We also showed stable financial results in the first quarter of 2021 compared to the previous quarter, driven by continued recovery in business activity and improved economic conditions in TMK's key markets. The surge in raw material prices has put pressure on our operating costs, but we have been able to mitigate the impact on our profitability by improving our sales mix by increasing the share of seamless OCTG pipe with premium threaded connections and seamless industrial pipe. We expect further improvement in financial performance throughout 2021, driven by a recovery in demand in our key markets and market segments. I am confident that thanks to our constantly expanding product range and technological advantages, TMK will be able to take advantage of a more favorable market environment. "
Seamless pipes – 550KT, up 5% YoY
Welded pipes – 160KT, down 15% YoY
Total sales – 710KT, down 1% YoY
Revenue – RUB 65,061 million, up 18% YoY
Gross profit - RUB 12 481million, down 3% YoY
Adjusted EBITDA RUB 8 590 million, down 41% YoY
Adjusted EBITDA margin - 13%
Forecast for 2021
The Group expects that demand for OCTG pipes from Russian fuel and energy companies will remain stable, supported by continued development of existing and new projects by oil and gas companies, as well as an increase in the level of complexity of conditions for hydrocarbon production in Russia. The recovery in demand in the mechanical engineering industry, including power engineering, is expected to boost sales in the industrial pipe segment. The group expects that the level of consumption of industrial pipes in the European market will gradually recover after the lifting of the massive restrictive measures in connection with the COVID-19 pandemic and thanks to the ongoing industrial support measures from the government in the eurozone countries.