OAO TMK / Miscellaneous
22.05.2015 09:35
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 1Q 2015 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
unaudited interim consolidated IFRS financial results for the three months
ending March 31, 2015.
Summary 1Q 2015 Results
(In millions of U.S.$, unless stated otherwise)
1Q 4Q Change, 1Q Change,
2015 2014 % 2014 %
Sales, thousand tonnes 1,004 1,237 (19%) 1,026 (2%)
Revenue 1,134 1,500 (24%) 1,466 (23%)
Gross profit 252 309 (18%) 281 (10%)
Foreign exchange loss, net (24) (198) n/a (63) n/a
Profit/loss before tax 36 (265) n/a (14) n/a
Net profit/loss 30 (254) n/a (16) n/a
Earnings/loss per GDR(1), basic, 0.13 (1.17) n/a (0.07) n/a
U.S.$
Adjusted EBITDA(2) 185 227 (19%) 184 0%
Adjusted EBITDA margin, % 16% 15% 13%
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.
1Q 2015 Highlights
Sales
Sales (thousand tonnes) 1Q 2015 4Q 2014 Change, 1Q 2014 Change, %
%
Seamless 630 702 (10%) 640 (2%)
Welded 374 534 (30%) 386 (3%)
Total 1,004 1,237 (19%) 1,026 (2%)
1Q 2015 vs. 4Q 2014
- Total pipe sales fell by 19% from the prior quarter to 1,004 thousand
tonnes.
- Seamless pipe volumes decreased by 10% over the prior quarter to 630
thousand tonnes, mainly due to lower sales of industrial and line pipe
in the Russian division. Seamless OCTG pipe volumes declined by 6% from
the fourth quarter of 2014 as a result of weaker sales in the American
division.
- Welded pipe sales decreased by 30% from the prior quarter to 374
thousand tonnes, mostly due to lower sales of welded OCTG pipe in the
American division and welded industrial pipe in the Russian division.
1Q 2015 vs. 1Q 2014
- Total pipe sales declined by 2% year-on-year mostly as a result of
lower sales of OCTG and industrial pipe.
- Seamless pipe sales decreased by 2% compared to the first quarter of
2014 mainly due to lower volumes of seamless OCTG and industrial pipe
in the Russian division. Seamless OCTG pipe sales fell by 6%
year-on-year.
- Welded pipe volumes declined by 3% compared to the first quarter of
2014 mostly due to lower sales of welded OCTG in the American division
and welded industrial pipe volumes in the Russian division.
Financials
1Q 2015 vs. 4Q 2014
- Revenue fell by 24% to $1,134 million over the fourth quarter of 2014,
as a result of lower pipe sales and a negative effect of currency
translation.
- Adjusted EBITDA decreased by 19% quarter-on-quarter to $185 million,
mainly due to a negative effect of currency translation coupled with
weaker sales in the Russian and American divisions. Adjusted EBITDA
margin improved to 16% compared to the fourth quarter of 2014.
- Net profit was $30 million as compared to a net loss of $254 million
for the fourth quarter of 2014, which had resulted mostly from a
foreign exchange loss of $198 million.
- As of March 31, 2015, total debt amounted to $3,087 million, a $136
million decrease compared to December 31, 2014. Weighted average
nominal interest rate increased by 178 bps compared to December 31,
2014 and amounted to 9.04%.
- Net repayment of borrowings for the first quarter of 2015 amounted to
$137 million.
- Net debt increased by $11 million in the first quarter of 2015 compared
to December 31, 2014 and amounted to $2,980 million as of March 31,
2015. Net Debt-to-EBITDA ratio remained nearly flat at 3.70x as of
March 31, 2015 compared to December 31, 2014.
1Q 2015 vs. 1Q 2014
- Revenue fell by 23% compared to the first quarter of 2014, mainly as a
result of a negative effect of currency translation. Excluding this
effect, revenue would have increased by $260 million year-on-year.
- Adjusted EBITDA remained relatively flat at $185 million compared to
the first quarter of 2014. Adjusted EBITDA margin improved to 16%
compared to 13% in the first quarter of 2014.
- Net profit was $30 million for the first quarter of 2015 as compared to
a net loss of $16 million for the first quarter of 2014.
- As of March 31, 2015, total debt decreased by $507 million compared to
March 31, 2014, partially as a result of the Rouble's depreciation
against the U.S. Dollar. Weighted average nominal interest rate
increased by 245 bps compared to March 31, 2014.
- As of March 31, 2015, net debt decreased by $545 million compared to
March 31, 2014. Net Debt-to-EBITDA ratio improved to 3.70x as of March
31, 2015 from 4.08x as of March 31, 2014.
Recent Developments
- In March 2015, TMK shipped high-tech casing pipe, including TMK UP
premium connections, for Tatneft to produce super-viscous oil at the
Ashalchinskoye field in Tatarstan.
- In March 2015, TMK and Gazprom Burenie, one of Russia's largest
drilling companies, signed a strategic three-year contract, under which
TMK acts as a leading supplier of drill pipe to the company.
- In March 2015, TMK launched production of billets for drill pipe joints
with annual capacity of around 150 thousand billets.
- In April 2015, TMK supplied high-tech super chrome (13Cr) steel premium
pipe to Rospan International, one of the Rosneft's subsidiaries and
operator of Vostochno-Urengoiskoe and Novo-Urengoiskoe gas condensate
fields.
- In April 2015, TMK started LD pipe deliveries for Power of Siberia gas
transmission system by Gazprom. Throughout 2015 and beginning of 2016,
the Company plans to deliver more than 150 thousand tonnes of LD pipe
for the project.
1Q 2015 Segment Results
(In millions of U.S.$, unless stated otherwise)
1Q 2015 4Q 2014 Change, % 1Q 2014 Change, %
Sales (thousand tonnes)
Russia 770 912 (16%) 727 6%
America 184 277 (34%) 251 (27%)
Europe 50 47 4% 48 4%
Revenue
Russia 748 948 (21%) 981 (24%)
America 327 492 (34%) 418 (22%)
Europe 59 60 (2%) 67 (12%)
Gross Profit
Russia 195 224 (13%) 224 (13%)
America 41 75 (45%) 44 (7%)
Europe 16 11 49% 13 23%
Adjusted EBITDA
Russia 145 162 (11%) 153 (5%)
America 28 59 (52%) 24 15%
Europe 12 6 83% 7 56%
Russia
1Q 2015 vs. 4Q 2014
Revenue fell by 21% to $748 million from the fourth quarter of 2014, due to
a negative effect of currency translation of $239 million. Excluding this
effect, revenue would have grown by $39 million.
Gross profit decreased by 13% quarter-on-quarter to $195 million. Growth
resulting from a better pricing and product mix of welded and seamless pipe
was offset by a negative effect of currency translation and lower volumes.
Excluding the currency translation effect, gross profit would have grown by
$18 million. Gross profit margin improved to 26% compared to 24% in the
fourth quarter of 2014.
Adjusted EBITDA fell by 11% to $145 million compared to the fourth quarter
of 2014, following a decline in gross profit, which was partially offset by
a decrease in selling, general and administrative expenses. Adjusted EBITDA
margin improved to 19% in the first quarter of 2015 compared to 17% in the
prior quarter.
1Q 2015 vs. 1Q 2014
Revenue dropped by 24% year-on-year, largely as a result of a negative
effect of currency translation of $581 million. Excluding this effect,
revenue would have increased by $348 million.
Gross profit fell by 13% year-on-year as a growth resulting from more
favorable pricing and product mix was offset by a negative effect of
currency translation. Excluding this effect, gross profit would have
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