OAO TMK / Miscellaneous
24.08.2015 09:08
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 2015 AND 1H 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.
PAO 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,
2015.
Summary 2Q and 1H 2015 Results
(In millions of U.S.$, unless stated otherwise)
2Q 1Q Change, 1H 1H Change,
2015 2015 % 2015 2014 %
Sales volumes, thousand 978 1,004 (3%) 1,981 2,101 (6%)
tonnes
Revenue 1,162 1,134 2% 2,296 2,982 (23%)
Gross profit 241 252 (5%) 493 566 (13%)
Foreign exchange gain/loss, 30 (24) n/a 7 (31) n/a
net
Profit before tax 53 36 48% 89 62 44%
Net profit 47 30 59% 77 45 73%
Earnings per GDR(1), basic, 0.21 0.13 64% 0.35 0.21 67%
U.S.$
Adjusted EBITDA(2) 172 185 (7%) 356 375 (5%)
Adjusted EBITDA margin, % 15% 16% 16% 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.
2Q 2015 Highlights
Sales
Sales (thousand tonnes) 2Q 2015 1Q 2015 Change,
%
Seamless 604 630 (4%)
Welded 373 374 0%
Total 978 1,004 (3%)
- Total pipe sales decreased by 3% from the prior quarter to 978 thousand
tonnes, primarily due to significantly lower sales in the American
division partially offset by stronger performance of the Russian
division.
- Seamless pipe volumes decreased by 4% from the prior quarter to 604
thousand tonnes, as a result of weaker seamless OCTG sales in the
American division. Seamless OCTG sales declined by 6% from the first
quarter of 2015.
- Welded pipe sales remained relatively flat quarter-on-quarter at 373
thousand tonnes as lower welded pipe volumes in the American division
were offset by strong welded pipe sales in the Russian division.
Financials
- Revenue increased by 2% to $1,162 million over the first quarter of
2015, mainly as a result of higher welded pipe sales in the Russian
division, particularly stronger LD pipe volumes.
- Adjusted EBITDA reduced by 7% quarter-on-quarter to $172 million,
primarily due to a negative adjusted EBITDA for the American division,
which amounted to negative $16 million. Adjusted EBITDA margin slightly
declined to 15% compared to 16% for the prior quarter.
- Net profit was $47 million as compared to $30 million for the first
quarter of 2015. Foreign exchange gain in the second quarter of 2015
was $30 million compared to foreign exchange loss in the amount of $24
million in the first quarter of 2015.
- As of June 30, 2015, total debt amounted to $3,048 million, a $39
million decrease compared to March 31, 2015. Weighted average nominal
interest rate increased by 3 bps compared to March 31, 2015 and
amounted to 9.07%.
- Net debt decreased by $96 million compared to March 31, 2015 and
amounted to $2,884 million as of June 30, 2015. Net Debt-to-EBITDA
ratio slightly decreased to 3.67x as of June 30, 2015 compared 3.70x as
of March 31, 2015.
1H 2015 Highlights
Sales
Sales (thousand tonnes) 1H 2015 1H 2014 Change,
%
Seamless 1,234 1,273 (3%)
Welded 747 828 (10%)
Total 1,981 2,101 (6%)
- Total pipe volumes decreased by 6% year-on-year to 1,981 thousand
tonnes, mostly due to weaker sales in the American division.
- Seamless pipe volumes decreased by 3% compared to the same period of
2014 to 1,234 thousand tonnes, mainly as a result of lower seamless
OCTG volumes in the American division. Seamless OCTG pipe sales fell by
10% year-on-year.
- Welded pipe sales decreased by 10% from the first half of 2014 to 747
thousand tonnes, primarily due to lower welded OCTG volumes in the
American division offset by stronger LD pipe sales in the Russian
division.
Financials
- Revenue was $2,296 million, a decrease of 23% over the first half of
2014, mainly as a result of a negative effect of currency translation.
Excluding this effect, revenue would have increased by $404 million
year-on-year.
- Adjusted EBITDA decreased by 5% compared to the same period of 2014 to
$356 million. Growth in the Russian and European divisions was offset
by weaker adjusted EBITDA in the American division due to lower sales
and weaker prices. Adjusted EBITDA margin improved to 16% compared to
13% in the first half of 2014.
- Net profit was $77 million as compared to $45 million for the first
half of 2014. Foreign exchange gain in the first half of 2015 was $7
million compared to foreign exchange loss in the amount of $31 million
for the same period of 2014.
- As of June 30, 2015, total debt decreased by $175 million compared to
December 31, 2014 and amounted to $3,048 million. TMK's weighted
average nominal interest rate increased by 181 bps compared to December
31, 2014 to 9.07% as of June 30, 2015.
- Net repayment of borrowings for the first half of 2015 amounted to $228
million.
- Net debt decreased by $85 million compared to December 31, 2014 and
amounted to $2,884 million as of June 30, 2015. Net Debt-to-EBITDA
ratio marginally declined to 3.67x as of June 30, 2015 compared to
3.69x as of December 31, 2014.
Recent Developments
- In June 2015, TMK-ARTROM, TMK's subsidiary in Romania, commissioned a
new workshop to produce precision pipe for the needs of automotive
industry and hydraulic cylinder manufacturing with the annual capacity
of 25 thousand tonnes of pipe.
- In June 2015, TMK and Rosneft signed a partnership agreement focusing
on R&D cooperation in the field of development, production and
implementation of high-tech lubricants.
- In July 2015, TMK launched construction of the R&D facility in Skolkovo
Innovation Center with the scheduled opening in the first quarter of
2017. Estimated investments in the project amount to RUB 3 bn.
2Q 2015 and 1H 2015 Segment Results
(In millions of U.S.$, unless stated otherwise)
2Q 2015 1Q 2015 Change, % 1H 1H Change, %
2015 2014
Sales (thousand tonnes)
Russia 845 770 10% 1,615 1,514 7%
America 83 184 (55%) 267 493 (46%)
Europe 50 50 0% 100 93 7%
Revenue
Russia 958 748 28% 1,706 2,011 (15%)
America 150 327 (54%) 477 833 (43%)
Europe 55 59 (6%) 114 138 (18%)
Gross Profit
Russia 236 195 21% 431 445 (3%)
America (8) 41 n/a 33 93 (64%)
Europe 13 16 (21%) 29 28 4%
Adjusted EBITDA
Russia 179 145 23% 324 300 8%
America (16) 28 n/a 12 58 (80%)
Europe 9 12 (22%) 20 16 26%
Russia
2Q 2015 vs. 1Q 2015
Revenue increased by 28% from the first quarter of 2015 to $958 million, as
a result of the growth in welded pipe volumes, particularly in LDP sales.
Gross profit grew by 21% quarter-on-quarter to $236 million, due to higher
sales of welded pipe following stronger demand for LD pipe. Gross profit
margin declined to 25% from 26% in the previous quarter.
Adjusted EBITDA increased by 23% compared to the first quarter of 2015 to
$179 million, following a growth in gross profit. Adjusted EBITDA margin
remained relatively flat compared to the prior quarter and amounted to 19%.
1H 2015 vs. 1H 2014
Revenue decreased by 15% year-on-year to $1,706 million, largely due to a
negative effect of currency translation. Excluding this effect, revenue
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