TMK Announces FY 2018 Operational Results

FY 2018 Highlights

Total pipe shipments grew 6% year-on-year, to 4,010 thousand tonnes, mainly driven by higher seamless OCTG shipments at the Russian division and increased shipments of both seamless and welded OCTG pipe at the American division, due to stronger drilling activity in North America.

Seamless pipe shipments were up 3% year-on-year, to 2,767 thousand tonnes, mainly reflecting increased shipments of OCTG pipe at the Russian division.

Welded pipe shipments were up 11% year-on-year, to 1,243 thousand tonnes, mainly driven by higher shipments of welded pipe at the American division and increased shipments of large diameter pipe in Russia.

OCTG shipments increased 11% year-on-year, to 1,958 thousand tonnes.

Shipments of premium threaded connections grew 31% year-on-year, to 1,034 thousand joints, driven by the increasing complexity of hydrocarbon production projects in Russia and the U.S., where premium products are used.

4Q 2018 Highlights

Total pipe shipments increased 6% quarter-on-quarter, to 1,005 thousand tonnes.

Seamless pipe shipments grew 17% quarter-on-quarter, mainly driven by stronger seamless OCTG and line pipe shipments at both the Russian and American divisions.

Welded pipe shipments were down 17% quarter-on-quarter, mainly due to seasonally weak demand for industrial pipe in Russia and the U.S. and a decrease in welded OCTG shipments at the American division as distributors reduced pipe inventories in anticipation of new import supplies, declining HRC prices and year-end inventory taxes.

OCTG shipments increased 14% quarter-on-quarter, to 536 thousand tonnes, due to seasonally strong demand for OCTG from Russian oil and gas companies and higher OCTG shipments at the American division, supported by stable drilling activity in North America.

Shipments of premium-threaded connections increased 12% quarter-on-quarter, to 296 thousand joints.

Alexander Shiryaev, CEO of TMK, said:

“2018 has been a year of solid growth in shipments for TMK, which continues to strengthen its position as one of the global leading producers of tubular products for the oil and gas industry. Shipments of our key product – OCTG – were up 11% year-on-year and 14% quarter-on-quarter. Meanwhile a 31% increase in shipments of premium-threaded connections in the year, with growth of 12% quarter-on-quarter in 4Q 2018, demonstrated consistent and growing demand for our range of unique premium products. All of the above paved the way to significantly improved financial results including substantial debt reduction.

The Company’s ongoing growth is underpinned by our focus on R&D and product innovation, which ensures we are consistently meeting customer demand for high tech products, as hydrocarbon production projects in Russia and the U.S. become increasingly complex.

Looking ahead to 2019, we anticipate continued growth in shipments, supported by strong pipe consumption from oil and gas companies in Russia and the U.S, and sustained demand for seamless industrial pipe in Europe.”