Russian steel pipe producer TMK has announced its financial results for the third quarter and the first nine months of 2019.
While the company’s sales revenues decreased by 16 percent to $1.1 billion in the third quarter compared to the previous quarter due to planned upgrade and maintenance works at key production facilities and a seasonal slowdown in the European market, its sales revenues in the first nine months of the year fell by four percent year on year to $3.67 billion due to lower revenue at the American and European divisions.
TMK’s gross profit in the January-September period this year was $705 million, in comparison to $692 million registered in the same period of 2018. In the third quarter, TMK recorded a gross profit of $221 million, compared to $248 million in the previous quarter.
In the third quarter TMK’s adjusted EBITDA fell by 29 percent to $139 million in comparison to the second quarter, due to a seasonally lower performance at the Russian and European divisions and a weaker performance at the American division. In the first nine months of the year, on the other hand, adjusted EBITDA fell to $508 million, decreasing by three percent year on year.
In Russia, TMK expects pipe consumption by domestic oil and gas companies to remain stable in 2019. TMK anticipates EBITDA at the Russian division to increase for 2019, supported by an increase in pipe shipments, with the EBITDA margin to be slightly above the level of 2018.
The company also stated, “In Europe, a challenging market environment and pricing pressure are most likely to remain until the end of the year. This could put pressure on seamless industrial pipe shipments at the European division in the fourth quarter.”