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TMK Announces 2Q 2020 Operational Results

22.07.2020

The following contains forward-looking statements concerning future events. These forward-looking statements are based on current information and assumptions of TMK management concerning known and unknown risks and uncertainties.

TMK, one of the world’s leading producers of tubular products for the oil and gas industry (the “Group’), announces its operational results for the second quarter and first half of 2020.

The Group’s results include the operational results of the Russian and European divisions represented by production assets located in Russia, Romania and Kazakhstan.

For comparison purposes, the Group’s operational results are presented net of the operational results of the American division (on January 2, 2020, TMK closed the sale of 100% of IPSCO Tubulars Inc.).   

 

2Q and 1H 2020 Summary Results

 

(thousand tonnes)

Product

2Q 2020

1Q 2020

Change

 

1H 2020

1H 2019

Change

Seamless pipe

533

505

6%

 

1,038

1,125

(8)%

Welded pipe

133

222

(40)%

 

355

481

(26)%

Total

        666

727

(8)%

 

1,393

1,605

(13)%

 

 

2Q 2020 vs. 1Q 2020

- Total pipe shipments declined by 8% quarter-on-quarter, driven by a decrease in welded pipe shipments at the Russian division.
- Seamless pipe shipments increased by 6% quarter-on-quarter, reflecting higher shipments of seamless OCTG pipe (up 8% quarter-on-quarter) at the Russian division and growth in shipments of seamless industrial pipe at both the Russian and European divisions.
- Welded pipe shipments were down 40% quarter-on-quarter, due to lower shipments across all welded pipe segments at the Russian division, with large diameter pipe consumption contracting by 42% quarter-on-quarter. Welded pipe shipments were negatively impacted by serious pressure on pipe consumption amid the challenging macro environment.

 

1H 2020 vs. 1H 2019

- Total pipe shipments were down 13% year-on-year, due to a decrease in seamless pipe shipments at both the Russian and European divisions, and lower shipments of welded pipe at the Russian division. The decline in shipments reflects a challenging global macro environment caused by the COVID-19 pandemic and oil price volatility.
- Seamless pipe shipments decreased by 8% year-on-year, mainly due to lower shipments of seamless OCTG pipe at the Russian division (down 8% year-on-year) and a deterioration of demand for seamless industrial pipe at the European division.
- Welded pipe shipments were down 26% year-on-year, reflecting a decrease in shipments across all welded pipe segments at the Russian division.

 

Igor Korytko, CEO of TMK, said:

 “In 2Q 2020, the global macro environment remained challenging and continued to depress demand for our products, which was reflected in a quarter-on-quarter decline in our total shipments. At the same time, we saw some recovery in seamless OCTG pipe shipments at the Russian division, coupled with stable demand for pipes with premium connections, and higher consumption of seamless industrial pipe in Europe comparing to the previous quarter. However, we don’t expect overall pipe consumption to improve significantly in the short term.”

 

3Q 2020 Outlook

We expect the pipe shipments at the Russian division to remain under pressure in the third quarter, mainly due to continuing market challenges and pre-planned upgrade and maintenance works at the Russian division’s key production facilities.

In Europe, we expect the gradual recovery in industrial pipe consumption to continue going forward.

TMK Announces 2Q 2020 Operational Results



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