TMK Reports 27% YoY Dip in Pipe Sales in 2020
Russian producers of tubular products for the oil and gas industry PAO TMK has announced its audited consolidated IFRS financial results for the year ended
Russian producers of tubular products for the oil and gas industry PAO TMK has announced its audited consolidated IFRS financial results for the year ended December 31, 2020. TMK CEO Mr Igor Korytko said “2020 was a challenging year for TMK. The COVID-19 pandemic, global economic downturn and oil production cuts had a significant impact on our business in key markets, resulting in a decline in pipe sales. However, thanks to our swift measures to adapt to the prevailing macroeconomic conditions, the Company was able to maintain its leading positions in its key segments, demonstrate a resilient operational and financial performance and reduce its debt level. We expanded our R&D capabilities and carried out a large-scale digital transformation of the business. At the end of last year, we adapted our development strategy to 2027 to reflect the new challenges of the global economy. We put special focus on the development of high-tech products and integrated solutions for customers that will be used not only for the production of hydrocarbons, but also for the development of clean energy sources, as well as in the development of other promising areas.”
2020 pipe sales down 27% YoY to 2.811 million tonnes with seamless pipes sales contracting by 24% YoY to 2.206 million tonnes ad welded pipe sales shrinking by 33% YoY to 0.785 million tonnes (2019 pipe sales volumes of the Group included pipe sales of the American division in the total amount of 520 thousand tonnes, including 303 thousand tonnes of seamless pipe and 217 thousand tonnes of welded pipe.)
2020 Revenue down 28% YoY at RUB 222.6 billion, largely reflecting the disposal of the American division and the economic downturn caused by the COVID-19 pandemic
2020 Adjusted EBITDA down 2% YoY at RUB 42.5 billion. Our measures to adapt to the current macroeconomic conditions and focus on the development and promotion of our high-tech products, as well as a foreign exchange gain from operations, almost fully compensated for the disposal of the American division
Adjusted EBITDA margin at 19% in FY 2020 compared to 14% in FY 2019
TMK expects demand for OCTG pipe from Russian oil and gas companies to remain stable, supported by the continued development of their existing and new projects, as well as the increased complexity of hydrocarbon production in Russia. The Group expects consumption of industrial pipe in the European market to recover gradually after the lifting of major COVID-19 lockdowns and stimulated by government measures to support industrial companies in the eurozone countries. The Group expects TMK’s revenues to increase by up to 20% in 2021 based on the anticipated market recovery.