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TMK announces 3Q and 9M financial results

Steel News - Published on Fri, 17 Nov 2017

Image Source: Wikimedia
PAO TMK one of the world’s leading producers of tubular products for the oil and gas industry, today announces its interim consolidated IFRS financial results for the third quarter of 2017 and nine months ending September 30, 2017.

3Q and 9M 2017 Highlights
Financial
1. 3Q Revenue up 3% QoQ at USD 1,140 million, 9M Revenue up 31% y-o-y, at USD 3,191 million
2. 3Q Adjusted EBITDA up 27% QoQ, at USD 169 million , 9M up 14% y-o-y, at USD 444 million.
3. 3Q Adjusted EBITDA margin at 15% and 14% for 9 month
4. Net profit of USD 22 million in 3Q and USD 46 million for 9 months.
5. Net debt at USD 2,711 million as at September 30, 2017
6. Net debt/EBITDA ratio improved to 4.64x as at September 30, 2017
7. Continued improvement at the American division, with Adjusted EBITDA at USD 72 million for 9M 2017 (9M 2016: USD (63) million)

Developments
1. In August 2017, TMK was the first Russian company to start producing casing pipes with unique TMK UP CENTUM gas-tight premium threaded connections. TMK UP CENTUM is the latest generation of threaded connections. With strength equal to the strength of the pipe, the connections considerably increase pipe string reliability during the construction of wells with complex configurations. The first load of pipes with TMK UP CENTUM connections has been shipped to NOVATEK for its Arctic LNG 2 project and has already been successfully installed at the Salmanovskoye (Utrenneye) oil and gas condensate field under the supervision of TMK specialists.

2. In October 2017, TMK presented its new 10-year Strategy at its 5th annual Capital Markets Day in London. The new strategy aims to reinforce TMK’s position as a leading supplier to the global OCTG market, the dominant supplier to the Russian oil and gas market, a TOP 3 OCTG producer in the U.S. and number 2 globally by financial performance.

The Company aims to enhance its global leadership in key product segments and further develop its vertical integration, expanding TMK’s commercial footprint by leveraging its global scale and taking full advantage of TMK’s e-commerce platform. The Company will be focused on adopting advanced digital technology to improve product quality and cut costs. To strengthen its financial position, TMK plans to further reduce its leverage, with a target Net debt/EBITDA ratio of 3.0x at FY 2019, and 2.5x at FY 2021.

Outlook
1. TMK anticipates overall stronger FY 2017 financial results compared to FY 2016 with some pressure on margins resulting from higher raw materials prices and weak LDP demand, with margins expected to expand in 1Q 2018.

Mr Alexander Shiryaev CEO of TMK said that “We are pleased to report a strong set of results for the third quarter with continued growth in the US market. As announced at our recent Capital Markets Day, our focus on innovation and digital will support TMK’s strategic objectives to 2027 of further strengthening TMK’s position in our key markets. We are committed to ensuring that TMK remains at the cutting-edge of oil and gas technology to support the changing needs of our major customers in the global energy sector, and in 3Q we were pleased to launch another unique product, TMK UP CENTUM, which will improve the performance of pipes in more complex well projects. In the fourth quarter, TMK’s financial performance will continue to be driven by strong demand in the US with improvement also expected in the Russian market, and we reiterate our FY 2017 guidance of a stronger financial performance year-on-year.”

Source :

Posted By : Rabi Wangkhem on Fri, 17 Nov 2017
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