TMK cuts pipe sales 13% to 2.8 mln tonnes in 2009
MOSCOW. Jan 19 (Interfax) - Russia's TMK , one of the world's top-three oil and gas industry pipe producers, reduced pipe sales 13% in 2009 to 2.8 million tonnes, the company said in a production and trading update.
Following an approximately 15% increase in shipment volumes in the third quarter of 2009, as compared to the second quarter of 2009, the company further increased shipment volumes in the fourth quarter by approximately 22% compared to the third quarter to 874,000 tonnes.
Shipments of oil country tubular goods (OCTG), a key segment of TMK's business, increased by 42% in the fourth quarter as compared to the third quarter of 2009.
Volumes of shipped pipe products ('000 tonnes):
|Product||4th Quarter 2009||3rd Quarter 2009||Q-o-Q (%)||2009||2008||Y-o-Y (%)|
The company attributes the fourth quarter increase in shipments to a pick-up in demand for OCTG and line pipe products in key markets and the implementation of large-scale long-distance pipeline projects in Russia.
At the same time, an improvement in demand from the Russian machine building and construction sectors was observed. The continued growth witnessed in the fourth quarter enabled the company to offset a substantial part of the first half decline in shipments volumes, therefore narrowing the level of decrease as compared to 2008.
Based on current market trends and prevailing market forecasts, TMK expects full year 2010 sales volumes to exceed 2008 levels.
Shipments of large-diameter pipe started increasing from the second quarter of 2009 and continued to grow in the second half, with shipments amounting to more than 150,000 tonnes in the fourth quarter, primarily servicing the construction of major oil and gas pipeline projects in Russia by Gazprom and Transneft . Full year 2009 large-diameter volumes exceeded 2008 volumes by 20%.
TMK said it expected its second half 2009 financial results to be significantly better than the first half due to a combination of increased demand for pipe products and changes in the structure of sales resulting from the strong performance observed in the large-diameter business and stable OCTG demand.
TMK also said that during 2009, it significantly improved the structure of its debt portfolio. The company attracted long-term loans to refinance existing facilities in an aggregate amount of about $2.1 billion and, as a result, the share of short-term loans as a percentage of its total loans as at December 31, 2009, decreased to 34% as compared to 69% as at December 31, 2008.
As at December 31, 2009, TMK's total interest-bearing loans and borrowings amounted to $3.729 billion, of which 66% was long-term debt and 34% short-term debt. At the same time, cash reserves amounted to $243 million. TMK's short-term debt included VTB Bank loan facilities in the aggregate amount of $750 million, which include an option to extend the maturity date by up to five years.