29th Jan 2014 09:23
OAO TMK / Sales Result 29.01.2014 10:23 Dissemination of a Regulatory Announcement, transmitted byEquityStory.RS, LLC - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement.--------------------------------------------------------------------------- January 29, 2014 PRESS RELEASE TMK Announces 4Q 2013 and FY 2013 Operational Results The following contains forward looking statements concerning future events.These forward looking statements are based on current information andassumptions of TMK management concerning known and unknown risks anduncertainties. TMK, one of the world's leading producers of tubular products for the oiland gas industry, announces its operational results for the fourth quarterof 2013 and full year 2013. 4Q 2013 and FY 2013 Highlights - In 2013, TMK shipped a total of 4,313 thousand tonnes of steel pipe to consumers, which is a 2.2% growth above 2012 and an all-time high for the Company. The increase was driven by stronger demand in the welded pipe segment. Shipments in the fourth quarter of 2013 rose by 5.0% quarter-on-quarter. - Seamless pipe shipments fell by 1.9% year-on-year to 2,449 thousand tonnes. In the fourth quarter, on the back of the seasonal rise in demand from oil and gas companies, shipments were up by 14.0% quarter-on-quarter, reaching 642 thousand tonnes. - Welded pipe shipments rose by 8.3% year-on-year in 2013 to 1,864 thousand tonnes as a result of improved demand for welded OCTG and line pipe, as well as large diameter pipe (LDP). Compared to the third quarter of 2013, shipments in the fourth quarter were down by 5.2%, mainly due to a decline in orders for LDP and industrial pipes. - The total shipments of OCTG pipe, TMK's core product, saw a 7.3% growth above 2012 and reached 1,835 thousand tonnes. In the fourth quarter, shipments went up by 10.8% quarter-on-quarter. The share of OCTG in TMK's total shipments also grew from 40.6% in 2012 to 42.6% in 2013. - Shipments of premium connections reached 774 thousand joints in 2013, up 26.3% year-on-year. In the fourth quarter, premium connection shipments remained unchanged compared to the third quarter. 4Q and FY 2013 Summary Results (thousand tonnes) Product 4Q 2013 3Q Q-o-Q, % 2013 2012 Y-o-Y, % 2013Seamless Pipe 642 563 14.0% 2,449 2,497 -1.9%Welded Pipe 471 497 -5.2% 1,864 1,722 8.3%Total 1,113 1,060 5.0% 4,313 4,218 2.2%includingOCTG 493 445 10.8% 1,835 1,712 7.3% 4Q 2013 and FY 2013 Market Overview and Performance by Division Russian Division In 2013, according to the Company's estimates pipe consumption in Russiagrew 3.8% year-on-year. In 2013, TMK's Russian division shipped 2,986thousand tonnes of tubular products (1), which is slightly above the 2012volumes. This secured the Company's leadership in the Russian market withthe share of 25.2%. Shipments in the fourth quarter of 2013 rose by 2.2%quarter-on-quarter to 747 thousand tonnes. In 2013, LDP shipments were up 4.5% above 2012, reaching 445 thousandtonnes, but declined by 15.6% in the fourth quarter following thecompletion of LDP shipments for the third line of the Central Asia-Chinagas pipeline. Seamless OCTG shipments remained virtually unchanged year-on-year in 2013,standing at 1,011 thousand tonnes. In the fourth quarter, TMK's Russiandivision increased seamless OCTG shipments by 9.6% quarter-on-quarter.Shipments of seamless line pipe in 2013 were down by 12.1% as a result ofscheduled repair of the rolling mills of TMK's Russian plants in the thirdquarter. In the fourth quarter, shipments in this segment increased by57.6%, driven by the seasonal rise in demand from oil and gas companies.The 2013 shipments of welded line pipe grew by 21.4% year-on-year. Seamless industrial pipe shipments increased by 2.0% in 2013. In the fourthquarter, shipments of this product were down by 8.8% quarter-on-quarter dueto seasonal factors. (1) This includes shipments from TMK's Russian facilities, TMK-Kaztrubpromand TMK GIPI to the Russian, CIS and non-CIS markets (excluding the NorthAmerican market). American Division In 2013, TMK's American division managed to establish a new record forshipments of pipe with premium connections, resulting in a year-on-yearincrease of 24.4% as well as an increase in market share within the premiumconnections market segment. However, as energy sector companies continuedto refocus on oil drilling, changes in the types of premium connectionsrequired by oil drillers as opposed to higher value connections required bynatural gas drillers resulted in lower average selling prices for theseproducts. Furthermore, overall US OCTG market prices continued to be underpressure from the considerable quantities of imported product -particularly from the nine countries currently under investigation by theUS Commerce Department for possible dumping - that were brought into theU.S. market during 2013. According to Baker Hughes, the active rig count totaled 1,762 rigs for2013, which is 157 rigs or 8% below the 2012 average. The total amount ofoil rigs went up by 1%, while gas rigs lost 31%, going down from 556 unitsin 2012 to 383 in 2013. However, the impact on OCTG consumption of thisoverall drop in rig count was to great extent mitigated by an increase inthe number of tonnes consumed per rig, which was the result of greaterdrilling efficiencies and an increase in the number of horizontal wells, aswell as the length of the lateral segments of these wells. As such,consumption of tubular products in the U.S. shrunk by 6%, less than thedrop in rig count would otherwise lead to believe. That said, in additionto the 6% drop in consumption, the American market saw a 16% increase ininventories. Despite these unfavourable market developments, TMK's American divisionmanaged to increase its market share - while shipping 1,170 (2) thousandtonnes in 2013, which is 7.2% above the 2012 performance and also a newrecord for the division. Shipments in welded and seamless OCTG went up by22.3% and 10.6%, respectively. In the fourth quarter of 2013, the Americandivision shipped a total of 322 thousand tonnes of tubular products toconsumers, up 9.5% quarter-on-quarter. (2) This includes products manufactured by TMK's Russian, Omani andRomanian facilities and sold on the North American market. European Division In 2013, the European market's trend towards a decline in tubular productcapacity continued. In 2008 to 2013, the total annual consumption oftubular products in the EU countries shrank by more than 50%, from 5million to 2.3 million tonnes. Additional challenges come from the strongercompetition from cheaper products made in Ukraine, China, India and othercountries where the costs of raw materials and electric power as well asenvironmental charges are considerably below those in Europe. Still, even in this market environment, TMK's European division increasedits shipments by 2.6% in 2013 to 156 thousand tonnes. In the fourthquarter, shipments went up by 25.1% quarter-on-quarter, reaching 43thousand tonnes. Premium Segment Within its premium segment of business TMK ships pipe with premiumconnections and also provide threading services for third parties.Throughout 2013, demand for TMK's premium connections continued to grow.For the full year 2013, TMK shipped 774 thousand connections developed bythe Company's Russian and American divisions. This is a 26.3% increaseyear-on-year. At the same time Russian division's shipments of premiumconnections grew by 30.5%, and the Company also saw a higher share of pipewith premium connections in the total shipments for 2013. In the fourth quarter, TMK shipped a total of 201 thousand premiumconnections, which is in line with the third quarter performance. In 2013, TMK's premium products and oilfield services were first used inRussia in a hydraulic fracturing project by Orenburgneft (part of Rosneft).In August 2013, TMK's casing with TMK PF premium connections were qualifiedby ONGC, India's state oil and gas company, and ADCO, one of the largestoil companies in the Middle East. In November 2013, TMK announced bringing its two lines of premiumconnections (Russian and American) together under the single brand of TMKUltra Premium (TMK UP(TM)). The move will boost the Company's competitiveposition in bidding for premium tubular product supply and contribute toTMK's premium product brand awareness in the global market. Outlook As Russian oil and gas companies remain actively focused on their plans forhydrocarbon production, TMK expects the 2014 demand for tubular products inRussia to be broadly the same as in 2013, with a potential for some upwardtrend in the second half of the year. In the American market, demand for OCTG will stay stable or will beslightly higher than in 2013 as the Company sees producers' better activityin developing oil and gas fields in West Texas and Midcontinent. TheCompany also expects strong demand for line pipe on the back of continuedconstruction of tubular infrastructure in the U.S., which will bring newopportunities for TMK's American division production to grow. The environment in the European pipe market, which is going through alasting recession, will remain largely unchanged in 2014 compared to 2013.Shipments of TMK's European division are projected to stay at the 2013level. In general, the Company confirms its cautiously positive outlook for 2014and expects a moderate improvement in shipments for the year. ***For further information regarding TMK please visit www.tmk-group.com ordownload the YourTube iPad application from the App Storehttps://itunes.apple.com/ru/app/yourtube/id516074932?mt=8&ls=1 *** ТМК (www.tmk-group.ru) TMK (LSE: TMKS) is a leading global manufacturer and supplier of steelpipes for the oil and gas industry, operating 28 production sites inRussia, the U.S., Canada, Romania, Oman, UAE, and Kazakhstan, and two R&Dcentres in Russia and the U.S. In 2013, TMK's pipe shipments totaled 4.3million tonnes. The largest share of TMK's sales belongs to high margin oilcountry tubular goods (OCTG), shipped to customers in over 80 countries.TMK delivers its products along with an extensive package of services inheat treating, protective coating, premium connections threading,warehousing and pipe repairing. TMK's securities are listed on the London Stock Exchange, the OTCQXInternational Premier trading platform in the U.S. and on the MoscowExchange MICEX-RTS. TMK's production assets structure: Russian division: American division:Volzhsky Pipe Plant; 12 plants of TMK IPSCO;Seversky Tube Works; OFS International LLC.Taganrog Metallurgical European division:Works; TMK-ARTROM;Sinarsky Pipe Plant; TMK-RESITA.TMK-CPW; Middle East division:TMK-Kaztrubprom; TMK GIPI (Oman);TMK-INOX; Threading & Mechanical Key Premium LLC (Abu-TMK-Premium Service; Dhabi);TMK Oilfield Services. TMK Corporate CommunicationsIlya ZhitomirskyTel.: +7 495 775 7600E-mail: [email protected] 29.01.2014 EquityStory.RS, LLC's Distribution Services include RegulatoryAnnouncements, Financial/Corporate News and Press Releases.Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: EnglishCompany: OAO TMK 40/2a Pokrovka 105062 Moscow RussiaPhone: +7 495 775-7600Fax: +7 495 775-7601E-mail: [email protected]: tmk-group.comISIN: US87260R2013Category Code: MSCTIDM: TMKSSequence Number: 1859Time of Receipt: Jan 29, 2014 10:22:06 End of Announcement EquityStory.RS, LLC News-Service ---------------------------------------------------------------------------UK-Regulatory-announcement transmitted by DGAP - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement.
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