Information in this press release includes statements regarding future events. These statements are based on the current views and assumptions of management of the Company regarding known and unknown risks and uncertainties. Q3 2019 shipments are preliminary and may be revised.
Pipe Metallurgical Company (TMK) , one of the world's largest pipe manufacturers for the oil and gas industry, announces Q3 and 9M 2019 operating results
9M and Q3 2019 results
( thousand tons )
9 months of 2019 compared 9M 2018
- Total pipe shipments are marginally lower year-on-year due to lower shipments of both seamless and welded pipes (by 1% and 5% YoY, respectively), which was mainly due to a decrease in shipments in the American Division, which was partially offset by an increase in pipe shipments in the Russian Division (by 5% YoY). years), mainly for Even more seamless OCTG pipe shipments (up 9% yoy) and large diameter pipes (up 68% yoy).
- Total OCTG pipe shipments decreased by 4% YoY, while OCTG pipe shipments in the Russian division increased by 7% YoY, driven by increased complexity of hydrocarbon production projects in Russia and an increase in the share of horizontal drilling.
- Total shipments of premium threaded connections decreased by 5% year-on-year to 282 thousand tonnes, while shipments of premium threaded connections in the Russian division increased by 16%.
Q3 2019 vs. Q2 2019
- Total pipe shipments declined in line with the Company's earlier forecast as the third quarter is traditionally weaker due to scheduled modernization and maintenance work at the main the Russian division and the seasonal slowdown in the European market.
- Seamless pipe shipments were down 4% qoq mainly as a result of a decrease in shipments of OCTG and line pipes in the American division, which was due to the continued slowdown in activity in the North American market amid volatility in oil prices, continued reduction in the number of drilling rigs, high levels of inventories of tubular products, as well as stricter discipline of oil and gas companies in terms of spending budgets for drilling and production. Scheduled modernization and maintenance work at the main Russian divisions and the seasonal slowdown in the European market also affected the total shipments.
- Total welded pipe shipments decreased by 15% compared to 2- Q1 2019 due to lower shipments of OCTG and line pipes in the American division, as well as lower shipments of large diameter pipes in the Russian division.
- Shipments of OCTG pipes decreased by 11 % qoq 2019, mainly due to a decrease in shipments in the American division, and also due to a decrease in shipments in Russia due to planned modernization and maintenance work at the main enterprises of the Russian division .
Comment of TMK CEO Igor Korytko:
“Over the 9 months of 2019, TMK demonstrated a significant increase in shipments in the Russian division. and due to the high level of demand from oil and gas companies for seamless OCTG pipes - TMK's main products - which increased by 9% compared to the same period last year. 9M 2019 results were impacted by the continued slowdown in North American market activity, resulting in total pipe shipments down 2% year-on-year.
To meet growing demand from the largest Russian markets of oil and gas companies developing increasingly complex exploration and production projects, TMK continues to develop and increase sales of high-tech and high-margin pipe products, including unique premium connections. As a result, over 9 months of 2019, the total shipments of premium threaded connections in the Russian division increased by 16% compared to the same period last year. "
Forecast until the end of 2019