OAO TMK / Miscellaneous
05.03.2015 09:59
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 4Q 2014 AND FY 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 audited
consolidated IFRS financial results for the twelve months ending December
31, 2014.
Summary 4Q and FY 2014 Results
(In millions of U.S.$, unless stated otherwise)
4Q 3Q Change, FY FY Change,
2014 2014 U.S.$ mln 2014 2013 U.S.$ mln
Sales, thousand tonnes 1,237 1,065 172 4,402 4,287 115
Revenue 1,500 1,526 (26) 6,009 6,432 (423)
Gross profit 309 294 15 1,169 1,358 (188)
Foreign exchange gain / (198) (73) (125) (301) (49) (252)
(loss), net
Income / (loss) before (265) 2 (267) (201) 312 (514)
tax
Net income / (loss) (254) (7) (246) (217) 215 (431)
Earnings / (loss) per (1.1 (0.0 (1.14) (1.0 0.99 (1.99)
GDR(1), basic, U.S.$ 7) 4) 0)
Ajusted EBITDA(2) 227 202 25 804 952 (148)
Adjusted EBITDA margin, % 15% 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.
4Q 2014 Highlights
Sales
Sales (thousand tonnes) 4Q 2014 3Q 2014 Change,
%
Seamless 702 585 20%
Welded 534 480 11%
Total 1,237 1,065 16%
- Total pipe sales increased by 16% compared to the previous quarter
totaling 1,237 thousand tonnes, the result of higher large-diameter
pipe (LDP) volumes along with stronger sales of seamless pipe in the
Russian division.
- Seamless pipe volumes rose by 20% from the prior quarter to 702
thousand tonnes, due to higher seamless OCTG and line pipe sales in the
Russian division, following seasonally stronger demand. Seamless OCTG
sales grew by 13% compared to the third quarter of 2014.
- Welded pipe sales increased by 11% from the third quarter of 2014 to
534 thousand tonnes, as a result of higher volumes of LDP in Russia and
welded OCTG in the U.S.
Financials
- Revenue decreased by $26 million or 2% from the third quarter of 2014
to $1,500 million, mainly due to a negative effect of currency
translation which amounted to $289 million. Excluding this effect,
revenue would have grown by $263 million.
- Adjusted EBITDA increased by $25 million or 13% quarter-on-quarter to
$227 million, largely as a result of stronger sales of LDP, seamless
OCTG and line pipe in the Russian division, as well as higher volumes
of welded OCTG in the American division. Adjusted EBITDA margin grew to
15% compared to 13% in the third quarter of 2014.
- Net loss was $254 million as compared to a net loss of $7 million for
the third quarter of 2014. Foreign exchange loss in the fourth quarter
of 2014 was $198 million compared to $73 million in the previous
quarter.
- The Company recognized an impairment loss of $153 million, attributable
mostly to the goodwill of the American division. There were no
impairment charges in the third quarter of 2014.
- As of December 31, 2014, total debt decreased by $323 million to $3,223
million compared to $3,546 million as of September 30, 2014, influenced
by the Rouble's depreciation against the U.S. Dollar. TMK's weighted
average nominal interest rate increased by 17 basis points compared to
September 30, 2014 and amounted to 7.26%.
- Net debt fell by $539 million to $2,969 million as of December 31, 2014
compared to $3,508 million as of September 30, 2014. Net Debt-to-EBITDA
ratio improved to 3.69x as of the end of the fourth quarter compared to
4.26x as of September 30, 2014.
FY 2014 Highlights
Sales
Sales (thousand tonnes) FY 2014 FY 2013 Change,
%
Seamless 2,560 2,422 6%
Welded 1,842 1,866 -1%
Total 4,402 4,287 3%
- Total pipe sales increased by 3% year-on-year to 4,402 thousand tonnes,
mainly as a result of stronger sales of seamless OCTG and line pipe.
- Seamless pipe volumes increased by 6% year-on-year to 2,560 thousand
tonnes, mostly due to higher sales of seamless OCTG in the Russian and
American divisions. Seamless OCTG sales grew by 7% compared to the
previous year.
- Welded pipe sales decreased by 1% year-on-year to 1,842 thousand
tonnes, as higher LDP and welded OCTG volumes were offset by weaker
sales of welded line and industrial pipe.
Financials
- Revenue fell by $423 to $6,009 million, a 7% decrease over the prior
year, mainly due to a negative effect of currency translation in the
amount of $790 million. Excluding this effect, revenue would have
increased by $367 million year-on-year.
- Adjusted EBITDA decreased by $148 million or 16% year-on-year to $804
million, mainly due to a negative effect of currency translation and
higher raw materials prices in the Russian division. Adjusted EBITDA
margin was 13% compared to 15% for the full year 2013.
- Net loss was $217 million compared to a net income of $215 million for
the full year 2013. The financial result was negatively affected by a
foreign exchange loss in the amount of $301 million compared to $49
million for the full year 2013, and the $153 million impairment loss.
- As of December 31, 2014, total debt decreased by $471 million to $3,223
million compared to $3,694 million as of December 31, 2013, influenced
by the Rouble's depreciation against the U.S. Dollar. TMK's weighted
average nominal interest rate increased by 54 basis points compared to
December 31, 2013 reaching 7.26%.
- As of the end of 2014, net debt decreased by $631 million to $2,969
million compared to $3,600 million as of December 31, 2013. Net
Debt-to-EBITDA ratio improved to 3.69x as of December 31, 2014 from
3.78x as of December 31, 2013.
Recent Developments
- In October 2014, TMK put into operation a new FQM pipe rolling mill at
Seversky pipe plant with a total production capacity of around 600
thousand tonnes. As a result, incremental increase of the Company's
total seamless pipe capacity will amount to around 250 thousand tonnes.
- In November 2014, TMK supplied a complete set of high-tech tubular
products and equipment to Surgutneftegaz, which will be used in a drill
column of about 5,000 meters.
- In December 2014, TMK won Transneft's LDP tender for a total volume of
more than 31,583 tonnes, to be supplied within January-April 2015.
- In December 2014, the extraordinary general shareholders' meeting
approved an interim dividend payment for the first six months of 2014
in the amount of RUB 393,786,159.48 ($7 million at the exchange rate as
of the date of approval).
- In December 2014, TMK closed the public offering of additional shares,
raising total proceeds of RUB 5.5 bln, which represents a 5.476% share
in the Company.
- In February 2015, TMK redeemed its 5.25% Convertible Bonds due 2015
convertible into GDRs each representing four ordinary shares of TMK. To
redeem the bonds TMK used cash accumulated from operating and financial
activities, including a four-year USD denominated credit facility from
one of the leading Russian commercial banks. TMK has no more
international public debt maturing before 2018.
- In February 2015, TMK acquired a 100% interest in
ChermetServis-Snabzhenie for a total amount of around RUB 2.73 billion.
ChS-Snabzhenie had been the main scrap supplier to TMK steel mills for
the last several years and fully covered the Company's needs in scrap.
4Q 2014 and FY 2014 Segment Results
(In millions of U.S.$, unless stated otherwise)
4Q 2014 3Q 2014 Change, % FY FY Change, %
2014 2013
Sales (thousand tonnes)
Russia 912 772 18% 3,198 3,085 4%
America 277 249 11% 1,019 1,027 -1%
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