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TMK Announces 1Q 2019 IFRS Results

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Inside Information: This press release does not contain inside information.

Forward-looking statements: The information contained in this press release includes forward-looking statements. events. These statements are based on the current opinions and assumptions of the Company's management, taking into account known and unknown risks and uncertainties.

PJSC TMK (“TMK” or the “Group”), one of the world's leading producers of pipes for the oil and gas industry, announces interim consolidated results of operations for the three months ended March 31, 2019. , in accordance with International Financial Reporting Standards (IFRS).

Key indicators for the 1st quarter of 2019

Financial results

- Revenue for Q1 2019 was broadly unchanged from the prior quarter and the same period last year at $ 1,257 million. - Adjusted EBITDA increased by 9% Q1 2018 and amounted to USD 175 million - Adjusted EBITDA margin in Q1 2019 remained unchanged at 14% (Q4 2018 - 14%, in 1Q 2018 - 13%) - Net debt as of March 31, 2019 amounted to USD 2,519 million. Net debt repayments in Q1 2019 amounted to USD 125 million - Net debt to EBITDA ratio remained almost unchanged at 3.5x.

Key events of the Company for 1- Q1 2019

- In March TMK entered into a share purchase agreement with Tenaris for the sale of 100% of IPSCO Tubulars Inc. The total transaction price is USD 1,209 million, excluding cash and debt on the balance sheet. - The condition for the transaction is compliance with and fulfillment of the preconditions specified in the purchase and sale agreement (including but not limited to obtaining all necessary permits and approvals).

Forecast

TMK expects pipe consumption by fuel and energy companies in Russia to remain high in 2019. The increase in the complexity of hydrocarbon production projects in Russia is expected to lead to an increase in demand for high-tech products.

In Q1 2019, the North American OCTG market experienced a temporary slowdown in activity, driven by lower oil prices and lower 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. Together with a decrease in demand for OCTG pipes, this led to an increase in the level of stocks.

TMK expects a stable level in 2019 demand for seamless pipes for industrial use in the European market, as well as an improvement in the sales structure of the European division due to an increase in the share of high-margin pipe products.

At the end of 2019, TMK expects an increase in EBITDA of the Russian and European divisions against the background of growth shipment of pipe products. At the same time, the EBITDA margin of these two divisions will also slightly increase compared to 2018

Comment of TMK CEO Alexander Shiryaev:

“B 1- Q3 2019, TMK performed well compared to the same period last year. In particular, we showed an increase in sales volumes and a further improvement in the sales structure in the Russian division, where there is an increase in demand for high-tech products of TMK due to the continuing increase in the complexity of hydrocarbon production projects.

At the annual Investor Day held in March we confirmed our intention to achieve the set strategic goals for 2018-2022. We have demonstrated success in implementing the Company's strategy aimed at maintaining a leading market position by focusing on the production of seamless pipes and high value-added products, as well as through the development of new innovative products, digital transformation of the Company, expansion of the range of services and increased marketing activity. At the same time, we remain clearly focused on doing business responsibly.

We confirm our forecast for 2019 and expect the financial performance of the Russian and European divisions to increase amid growing demand for more marginal products. ”

Group 1Q 2019 Results Results

(Millions of USD, unless otherwise stated)

The monetary amounts, percentages and other figures included in this press release of TMK's operating results have been rounded to the nearest whole. As a result of rounding, individual totals in the tables may differ from the arithmetic sum of the added values.

(1) Adjusted EBITDA is the amount of net profit /(loss) for the reporting period

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