Pipe maker TMK posts $104 mln IFRS profit in 2010, below forecast
MOSCOW. April 1 (Interfax) - Russia's TMK , one of the world's top-three oil and gas industry pipe producers, closed 2010 with net profit of $104 million to International Financial Reporting Standards (IFRS), the company said in a statement.
This was below the $208 million that analysts predicted in a consensus forecast.
Earnings before taxes, depreciation and amortization (EBITDA) were $942 million, almost level with the forecast $939 million; and revenue was $5.58 billion, after $5.666 billion was forecast.
TMK financial highlights in 2010, $ mln:
| 2010 | 2009 | % change | |
| Sales revenue | 5 578 | 3 461 | 61 |
| Gross profit | 1 293 | 556 | 30 |
| Pretax profit (loss) | 185 | (427) | - |
| Net profit (loss) | 104 | (324) | - |
| EBITDA | 942 | 328 | 90 |
| EBITDA margin, % | 17 | 10 | - |
Net debt grew 6% in 2010 to $3.7 billion, and the net debt/EBITDA ratio was 3.9. Short-term debt fell to 18% of total debt.
Capex fell 34% to $270 million in connection with the review of the 2004-2011 investment program, some of the projects of which have had to be put back due to the crisis.
The company says its share of some markets outside Russia and North America has decreased due to heightened competition with other pipe manufacturers, which trade restrictions have sideline from other markets. TMK has diverted some shipments from those regions to Russia and the United States.
TMK shipped 1.08 million tonnes of pipe to consumers in Q1, 15% more than in the same period of last year. Of these, 389,000 were OCTG and 208,000 tonnes were line pipe. OCTG pipe sale volumes grew by 6% and 7% compared to the fourth quarter of 2010 and the first quarter of 2010, respectively. Large-diameter pipe shipments in the first quarter of 2011 remained strong at 214,000 tonnes which is 43% higher compared to the first quarter of 2010. TMK IPSCO shipments came in at 236,000 tonnes, which is 11% higher than in the fourth quarter of 2010.
TMK put its pipe prices up 10%-15% in Q1 2011 but it said higher steel prices might have negative impact on margins in H1 2011.
TMK said it expected revenue and EBITDA to be above average quarterly 2010 levels in Q1 2011.
The EBITDA margin could fall in Q1 compared with Q4 due to higher costs and net profit, Tigran Petrosian, deputy general director for economics and finance, said during a conference call.
Petrosian said the margin would recover for all products in Q2 and reach the 18% seen in Q4 2010 during H2 2011.
Forecast EBITDA in Q1 is level with Q4 2010 ($290 million), or slightly lower.
Planned capex is $300 million in 2011.
TMK production facilities are located in Russia, the United States, Romania and Kazakhstan. The Russia-based enterprises include Seversky Tube Works , Sinara Pipe Works , Volzhsky Pipe Works (VTZ) and the Taganrog Metallurgical Plant (Tagmet).
Dmitry Pumpyansky, the board chairman, is the company's main beneficiary.