The information in this press release includes forward-looking statements. These statements are based on the current views and assumptions of the Company's management regarding known and unknown risks and uncertainties.
Q1 2019 shipments are preliminary and may be adjusted.
Pipe Metallurgical Company (TMK), one of the world's largest producers of pipes for the oil and gas industry, announces operating results for the first quarter of 2019
Final results for Q1 2019
(thousand tonnes)
Q1 2019 vs. Q1 2018
- Total pipe shipments decreased by 2% year-on-year to 966 thousand tonnes, which is explained by a decrease in shipments of both seamless and welded pipes (by 1% and 3% compared to the same period last year, respectively). This is mainly due to a 14% decrease in pipe shipments in the American division (down 14% qoq) as a result of a temporary slowdown in activity in the North American market in 1Q 2019 driven by lower oil prices and lower quantities drilling rigs.
- OCTG pipe shipments increased by 4% year-on-year to 481,000 tonnes, driven by an increase in seamless OCTG pipe shipments in the Russian division (up 10% year-on-year). the same period last year) amid a continuing increase in the volume of drilling in Russia.
- The volume of shipments of premium threaded connections grew by 5% compared to the same period last year and amounted to 236 thousand pieces.
Q1 2019 vs. Q4 2018
- Total pipe shipments decreased by 4% vs. Q4 2018 year, which is explained by a decrease in the volume of shipments of seamless pipes (9% QoQ 2018) mainly as a result of lower shipments of OCTG and line pipes in the American division and seamless OCTG pipes in the Russian division.
- Decreased shipments of OCTG pipes and line pipes in the American division compared to Q4 2018 was the result of a temporary slowdown in activity in the North American market due to falling oil prices and a decrease in the number of rigs, as well as the fact that in Q1 2019 US pipe producers were impacted by an increase in imports of pipe products to the market as a result of the resumption of quotas in accordance with section 232. This caused a market decline similar to that recorded in the 1st quarter of 2018
- Seamless OCTG pipes in the Russian division were down 2% qoq, as oil and gas companies were more active in procurement of tubular products in the 4th quarter.
- Shipments of welded pipes increased by 11% qoq, mainly due to an increase in shipments of large diameter pipes in the Russian division (by 24% qoq.
- Shipments of premium threaded connections decreased by 20% compared to Q4 2018, mainly due to a decrease in shipments in the American division amid a temporary slowdown in the North American market.
Comment of TMK CEO Alexander Shiryaev:
“In Q1 2019, there was a decrease in the total volume of pipe shipments, which was mainly due to a temporary slowdown in market activity in North America due to lower oil prices and fewer rigs. At the same time, we increased our shipments of premium threaded connections by 5% compared to the same period last year, which illustrates TMK's focus on providing end-to-end solutions for its customers.
We hope that our commitment to innovation will continue maintain a leading position in key markets as we develop and manufacture high-tech products with high added value to meet the needs of consumers for more technically sophisticated solutions. ”
Forecast to the end of 2019
TMK expects pipe consumption by fuel and energy companies in Russia to remain at a high level in 2019. The increased complexity of hydrocarbon production projects in Russia is expected to further increase demand for high-tech products.
In Q1 2019, the North American OCTG market experienced a temporary slowdown on the back of lower oil prices and reducing the number of drilling rigs. The volume of imports of pipe products increased as a result of the resumption of quotas for pipe products in accordance with section 232.
TMK expects stability in 2019
