TMK Announces Q4 2013 And Full Year 2013 IFRS Results

OAO TMK, one of the world’s leading producers of tubular products for the oil and gas industry, announces today its audited consolidated IFRS financial results for the twelve months ending December 31, 2013.

– Total pipe sales increased by 7% QoQ to 1,090,000 tonnes mainly due to the growth of OCTG and line pipe sales in the Russian division.

– Seamless pipe sales increased by 15% over the prior quarter to 617,000 tonnes. Seamless OCTG and line pipe volumes grew by 21% and 19% QoQ respectively due to seasonally higher demand from oil and gas producers.

– Welded pipe sales decreased by 3% quarter on quarter to 473,000 tonnes mostly due to lower welded industrial and large diameter pipe volumes.

Financials;

– Revenue for the Q4 was USD 1,571 million, an increase of 6% over the Q3 of 2013, mainly due to higher sales in the Russian and American divisions.

– Adjusted EBITDA increased by 36% QoQ to USD 247 million mainly due to higher sales of seamless pipe in the Russian division and better product mix of welded pipe in the Russian and American divisions. Adjusted EBITDA margin was 16%.

– Net income was USD 55 million for the Q4 as compared to USD 35 million in the Q3 of 2013. Net income margin was 3% for the Q4 of 2013.

As of December 31st 2013, total debt decreased by USD 82 million compared to the level as of September 30th 2013 and amounted to USD 3,694 million. TMK’s weighted average nominal interest rate amounted to 6.72% as compared to 6.77% as of September 30, 2013.

– Net repayment of borrowings for the fourth quarter of 2013 amounted to USD 65 million compared to the net repayment of USD 7 million in the Q3 of 2013. Net debt decreased by USD 97 million in the Q4 of 2013 compared to the level as of September 30th 2013 and amounted to USD 3,600 million as of December 31st 2013. The Net Debt to EBITDA ratio was 3.8x.

– Total pipe sales grew by 1% to 4,287,000 tonnes compared to the prior year mainly due to higher volumes of welded OCTG pipe. Seamless pipe sales decreased by 3% compared to the full year 2012 and amounted to 2,422 thousand tonnes due to lower line pipe volumes in the Russian division. Seamless OCTG pipe volumes increased by 1% YoY. Welded pipe sales increased by 7% YoY to 1,866,000 tonnes largely as a result of higher volumes of welded OCTG and LD pipe.

Financials;

– Revenue decreased by 4% YoY to USD 6,432 million mainly due to lower sales of seamless pipe in the Russian division and a negative effect of currency translation. Adjusted EBITDA decreased by 7% YoY to USD 952 million negatively affected by unfavorable market conditions in the US and Europe. Adjusted EBITDA margin remained flat YoY and amounted to 15%.

– Net income was USD 215 million for the full year 2013 as compared to USD 278 million for the full year 2012, negatively affected by foreign exchange loss in the amount of USD 49 million.

– As of December 31st 2013, total debt decreased by USD 191 million to USD 3,694 million compared to USD 3,885 million as of December 31st 2012, partially as a result of the Rouble’s depreciation against the US dollar. TMK’s weighted average nominal interest rate decreased by 27 basis points to 6.72% as of December 31st 2013 compared to December 31st 2012. Net repayment of the debt amounted to USD 93 million for the full year 2013. Net debt decreased by USD 56 million as of December 31, 2013 compared to the level as of December 31 2012.

See the full report here