TMK Announces 9M 2018 Operational Results
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.
3Q 2018 shipments data is preliminary and may be adjusted.
TMK, one of the world’s leading producers of tubular products for the oil and gas industry, announces its operational results for the third quarter and nine months of 2018.
3Q and 9M 2018 Summary Results
(thousand tonnes)
Product | 3Q 2018 | 2Q 2018 | Change |
| 9M 2018 | 9M 2017 | Change |
Seamless pipe | 632 | 716 | (12)% | 2,025 | 1,996 | 1% | |
Welded pipe | 317 | 359 | (12)% | 979 | 825 | 19% | |
Total | 949 | 1,075 | (12)% | 3,004 | 2,821 | 7% | |
Including: OCTG | 470 | 492 | (4)% | 1,422 | 1,311 | 8% |
9M 2018 Highlights
- Total pipe shipments grew 7% year-on-year, to 3,004 thousand tonnes, mainly driven by higher shipments of welded pipe at the American division due to increased drilling activity in North America and higher seamless OCTG and LDP shipments at the Russian division.
- Seamless pipe shipments increased 1% year-on-year, to 2,025 thousand tonnes, mainly due to higher shipments of OCTG pipe at the Russian division.
- Welded pipe shipments increased 19% year-on-year, to 979 thousand tonnes, mainly driven by higher shipments of welded pipe at the American division and increased shipments of large diameter pipe in Russia.
- OCTG shipments increased 8% year-on-year, to 1,422 thousand tonnes.
- Shipments of premium threaded connections increased 27%, to 738 thousand joints, driven by the increased complexity of hydrocarbon production projects in Russia and the U.S., where premium products are used.
3Q 2018 Highlights
- Total pipe shipments decreased 12% quarter-on-quarter, to 949 thousand tonnes.
- Both seamless and welded pipe shipments were down 12%, mainly due to pre-planned upgrade and maintenance works at the Russian division’s key production facilities, lower large diameter pipe shipments in Russia, and a decline in OCTG and line pipe shipments at the American division due to the high level of inventories built up in the U.S. during 2Q 2018.
- OCTG shipments were down 4% quarter-on-quarter, to 470 thousand tonnes, due to pre-planned upgrade and maintenance works at the Russian division’s key production facilities, and lower OCTG shipments at the American division due to the high level of inventories built up in the U.S..
- Shipments of premium-threaded connections increased 7% quarter-on-quarter, to 265 thousand joints.
Alexander Shiryaev, CEO of TMK, said:
“We have achieved solid year-on-year growth for 9 months 2018, despite lower shipments in the third quarter, which reflected seasonal maintenance works at our Russian assets as well as a temporary market slowdown in the U.S., following the imposition of Section 232 earlier in the year.
Demand for our premium products remains strong, reflecting the more complex environments in which our consumers are required to operate and our commitment to delivering market-leading pipe technology through a constant focus on innovation.
Overall, we expect demand to remain strong in our key markets for the remainder of 2018, as drilling activity in Russia continues to grow and with the North American rig count remaining solid.”
3Q 2018 Results by Division
RUSSIAN DIVISION
Product | 3Q 2018 | 2Q 2018 | Change |
| 9M 2018 | 9M 2017 | Change |
Seamless pipe | 467 | 524 | (11)% | 1,501 | 1,483 | 1% | |
Welded pipe | 216 | 251 | (14)% | 661 | 623 | 6% | |
Total(1) | 683 | 775 | (12)% | 2,162 | 2,106 | 3% | |
Including: OCTG | 302 | 310 | (3)% | 916 | 863 | 6% |
(1) Total includes shipments from TMK’s Russian facilities, TMK-Kaztrubprom and TMK GIPI to the Russian, CIS and non-CIS markets (excluding North America).
9M 2018 vs. 9M 2017
- Total pipe shipments increased 3% year-on-year, reflecting growth in both seamless and welded pipe shipments.
- Shipments of seamless pipe were up 1% year-on-year, supported by higher demand for seamless OCTG pipe as the drilling activity in Russia continues to grow.
- Shipments of welded pipe increased 6% year-on-year, mainly due to stronger shipments of large diameter pipe.
- OCTG shipments increased 6% year-on-year.
3Q 2018 vs. 2Q 2018
- Total pipe shipments decreased 12% quarter-on-quarter, due to pre-planned seasonal upgrade and maintenance works at the division’s key production facilities and lower LDP shipments to Russian consumers.
- The 11% decline in shipments of seamless pipe quarter-on-quarter mainly reflected lower OCTG and line pipe shipments as a result of the scheduled repairs at the key production facilities. We also saw a decline in industrial pipe shipments due to some softening in demand on the market.
- Shipments of welded pipe were down 14% quarter-on-quarter, mainly due to lower shipments of large diameter pipe (-39% quarter-on-quarter).
- Shipments of OCTG declined 3% quarter-on-quarter.
AMERICAN DIVISION
(thousand tonnes)
Product | 3Q 2018 | 2Q 2018 | Change |
| 9M 2018 | 9M 2017 | Change |
Seamless pipe | 116 | 138 | (16)% | 375 | 374 | 0% | |
Welded pipe | 101 | 109 | (7)% | 319 | 201 | 58% | |
Total | 217 | 247 | (12)% | 694 | 575 | 21% | |
Including: OCTG | 168 | 182 | (8)% | 506 | 448 | 13% |
(thousand tonnes)
Product | 3Q 2018 | 2Q 2018 | Change |
| 9M 2018 | 9M 2017 | Change |
Total shipments | 217 | 247 | (12)% | 694 | 575 | 21% | |
Including: Imported pipe | 27 | 37 | (27)% | 98 | 103 | (5)% |
9M 2018 vs. 9M 2017
- Total pipe shipments grew 21% year-on-year, supported by a significant increase in welded pipe shipments.
- Shipments of seamless pipe remained flat year-on-year, due to higher seamless OCTG and line pipe shipments, which fully compensated for lower shipments of industrial pipe.
- Shipments of welded pipe increased 58% year-on-year, due to continued solid demand in the U.S. oil and gas market despite short-term takeaway concerns in the Permian basin.
- OCTG shipments were up 13% year-on-year, mainly driven by stronger shipments of welded OCTG.
