OAO TMK / Miscellaneous
26.08.2014 09:02
Dissemination of a Regulatory Announcement, transmitted by
EquityStory.RS, LLC - a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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TMK ANNOUNCES 2Q 2014 AND 1H 2014 IFRS RESULTS
The following contains forward looking statements concerning future events.
These statements are based on current information and assumptions of TMK
management concerning known and unknown risks and uncertainties.
OAO TMK ('TMK' or 'the Company'), one of the world's leading producers of
tubular products for the oil and gas industry, announces today its interim
consolidated IFRS financial results for the six months ending June 30,
2014.
Summary 2Q and 1H 2014 Results
(In millions of U.S.$, unless stated otherwise)
2Q 1Q Chang- 1H 1H Chang-
2014 2014 e, % 2014 2013 e, %
Sales volumes, thousand tonnes 1,075 1,026 5% 2,101 2,175 -3%
Revenue 1,516 1,466 3% 2,982 3,374 -12%
Gross profit 285 281 1% 566 724 -22%
Foreign exchange gain/loss, 32 -63 n/a -31 -44 -30%
net
Income/loss before tax 76 -14 n/a 62 173 -64%
Net income/loss 60 -16 n/a 45 125 -64%
Earnings/loss per GDR(1), 0.28 -0.07 n/a 0.21 0.56 -62%
basic, U.S.$
Adjusted EBITDA(2) 190 184 3% 375 523 -28%
Adjusted EBITDA margin, % 13% 13% 13% 15%
Note: Certain monetary amounts, percentages and other figures included in
this press release are subject to rounding adjustments. Totals therefore do
not always add up to exact arithmetic sums.
(1) One GDR represents four ordinary shares
(2) Adjusted EBITDA is determined as profit/(loss) for the period excluding
finance costs and finance income, income tax (benefit)/expense,
depreciation and amortization, foreign exchange (gain)/loss,
impairment/(reversal of impairment) of non-current assets, movements in
allowances and provisions (except for provision for bonuses), (gain)/loss
on disposal of property, plant and equipment, (gain)/loss on changes in
fair value of financial instruments, share of (profit)/loss of associates
and other non-cash items
2Q 2014 Highlights
Sales
Sales (thousand tonnes) 2Q 2014 1Q 2014 Change,
%
Seamless 634 640 -1%
Welded 442 386 14%
Total 1,075 1,026 5%
- Total pipe sales increased by 5% from the prior quarter to 1,075
thousand tonnes, mainly due to higher sales in Russia across all types
of welded pipe, and especially large-diameter pipe (LDP) volumes.
- Seamless pipe volumes decreased by 1% from the prior quarter to 634
thousand tonnes as a result of lower seamless industrial pipe sales.
Seamless OCTG pipe volumes grew by 3% from the first quarter of 2014
due to higher sales in the Russian division.
- Welded pipe sales increased by 14% from the prior quarter to 442
thousand tonnes mostly due to higher sales of LDP in Russia.
Financials
- Revenue increased by 3% to $1,516 million over the first quarter of
2014, mainly as a result of higher welded pipe sales in the Russian
division.
- Adjusted EBITDA increased by 3% quarter-on-quarter to $190 million
mainly due to favorable product mix in the American division. Adjusted
EBITDA margin remained flat at 13% compared to the first quarter of
2014.
- Net profit was $60 million as compared to net loss of $16 million for
the first quarter of 2014. Foreign exchange gain in the second quarter
of 2014 was $32 million compared to foreign exchange loss in the amount
of $63 million in the first quarter of 2014.
- As of June 30, 2014, total debt increased by $160 million compared to
March 31, 2014 to $3,753 million partially as a result of the Rouble's
appreciation against the U.S. dollar. TMK's weighted average nominal
interest rate increased by 46 bps compared to March 31, 2014 and
amounted to 7.04%.
- Net debt increased by $105 million in the second quarter of 2014
compared to March 31, 2014 and amounted to $3,631 million as of June
30, 2014.
1H 2014 Highlights
Sales
Sales (thousand tonnes) 1H 2014 1H 2013 Change,
%
Seamless 1,273 1,271 0%
Welded 828 905 -9%
Total 2,101 2,175 -3%
- Total pipe sales decreased by 3% year-on-year to 2,101 thousand tonnes,
mostly due to lower LDP sales in Russia.
- Seamless pipe volumes remained flat year-on-year and amounted to 1,273
thousand tonnes as higher seamless OCTG sales were offset by lower
seamless line and seamless industrial pipe volumes. Seamless OCTG pipe
sales grew by 8% compared to the first half of 2013.
- Welded pipe sales decreased by 9% from the first half of 2013 to 828
thousand tonnes mostly due to lower sales of LDP.
Financials
- Revenue was $2,982 million, a decrease of 12% over the first half of
2013, mainly due to lower LDP sales in the Russian division and a
negative effect of currency translation.
- Adjusted EBITDA decreased by 28% year-on-year to $375 million mainly
due to unfavorable price and product mix of seamless pipe in the
Russian division, lower LDP sales and a negative effect of currency
translation. Adjusted EBITDA margin was 13% compared to 15% in the
first half of 2013.
- Net profit was $45 million as compared to $125 million for the first
half of 2013.
- As of June 30, 2014, total debt increased by $60 million compared to
December 31, 2013. TMK's weighted average nominal interest rate
increased by 32 bps compared to December 31, 2013.
- Net debt increased by $31 million in the first half of 2014 compared to
December 31, 2013.
-
Recent Developments
- On June 19, 2014, the annual shareholders' meeting approved a final
dividend for 2013 in the amount of 731 million Russian roubles
($21million at the exchange rate at the date of approval) or 0.78
Russian roubles ($0.02) per ordinary share. Total dividend amount for
2013 including interim dividends amounts to 1.7 billion Russian
roubles.
- On June 27, 2014, TMK's Board of Directors decided to increase the
share capital by the issuance of additional shares in the amount of
56,000,000 shares under open subscription.
- In July 2014, TMK and LUKOIL signed an R&D cooperation programme for
2014-2016 aimed at the launch of import-substituting and new types of
high-performance tubular products.
- In July 2014, TMK Gulf International Pipe Industry (TMK GIPI) LLC,
TMK's Omani plant, was awarded an 18,400 tonnes of OCTG order from the
foremost exploration and production company in the Sultanate, Petroleum
Development Oman (PDO).
2Q 2014 and 1H 2014 Segment Results
(In millions of U.S.$, unless stated otherwise)
2Q 2014 1Q 2014 Change, % 1H 1H Change, %
2014 2013
Sales (thousand tonnes)
Russia 787 727 8% 1,514 1,606 -6%
America 242 251 -3% 493 483 2%
Europe 46 48 -5% 93 86 9%
Revenue
Russia 1,030 981 5% 2,011 2,440 -18%
America 415 418 -1% 833 782 6%
Europe 71 67 7% 138 151 -9%
Gross Profit
Russia 221 224 -1% 445 612 -27%
America 49 44 11% 93 86 7%
Europe 15 13 11% 28 26 7%
Adjusted EBITDA
Russia 147 153 -3% 300 455 -34%
America 34 24 39% 58 53 9%
Europe 9 7 21% 16 15 12%
Russia
2Q 2014 vs. 1Q 2014
Revenue increased by 5% to $1,030 million from the first quarter of 2014
mainly as a result of the growth in welded pipe volumes and especially in
LDP sales.
Gross profit declined by 1% quarter-on-quarter to $221 million due to
unfavorable sales mix in welded pipe. Gross profit margin decreased to 21%
from 23% for the prior quarter.
Adjusted EBITDA amounted to $147 million, a decline of 3% compared to the
first quarter of 2014, following a decrease in gross profit and a growth in
other operational expenses. Adjusted EBITDA margin fell to 14% compared to
16% in the prior quarter.
1H 2014 vs. 1H 2013
Revenue dropped by 18% year-on-year to $2,011 million largely due to lower
LDP sales and a negative effect of currency translation.
Gross profit decreased by 27% year-on-year to $445 million mainly as a
result of unfavorable pricing and product mix of seamless pipe, lower LDP
volumes and a negative effect of currency translation. Gross profit margin
decreased to 22% from 25% in the first half of 2013.
Adjusted EBITDA fell by 34% year-on-year to $300 million mainly due to a
decrease in gross profit. Adjusted EBITDA margin declined to 15% compared
to 19% in the first half of 2013.
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