TMK Announces 1Q 2015 Results

Pipe Metallurgical Company (TMK), one of the leaders in the global pipe production, in Q1 2015 compared to Q4 2014:

Reduced pipe sales by 19 percent to 1,004 thousand tons. Seamless pipe sales volumes declined 10 percent to 630 kt, mainly due to lower sales of industrial and other pipes in the Russian division. Seamless OCTG volumes fell 6 percent as a result of weak sales in the US division. Sales of welded pipe fell 30 percent to 374 kt, mainly due to lower sales of welded OCTG in the US division and industrial welded pipe in the Russian division.

Q1 2015 vs. Q1 2014:

Pipe sales were down 2 percent on the back of lower OCTG and industrial pipe sales. Seamless pipe sales were down 2 percent due to lower volumes of seamless oil and industrial pipe in the Russian division. Seamless OCTG pipe sales fell 6 percent and welded pipe declined 3 percent, mainly due to a drop in sales of welded OCTG pipe in the US division.

Q1 2015 Compared to Q4 2014 Financial Results:

Revenue fell 24 percent to $ 1.134 million, driven by lower pipe sales and the negative impact of foreign exchange transfers. Adjusted EBITDA declined 19 percent to $ 185 million, mainly due to negative foreign exchange impacts coupled with weaker sales in the Russian and US divisions.

Net income was $ 30 million compared to a net loss of $ 254 million in Q4 2014. Repayment of loans in the 1st quarter of 2015 amounted to $ 137 million. Net debt increased by $ 11 million over the quarter compared to December 31, 2014 and amounted to $ 2,980 million as of March 31, 2015. Debt to EBITDA remained unchanged at 3.70 as of March 31.

Q1 2015 vs. Q1 2014:

Revenue decreased by 23 percent, mainly as a result of the negative impact of foreign exchange rates. Excluding this effect, revenue would have increased by $ 260 million. Net income of $ 30 million in Q1 2015 looks optimistic against the backdrop of a net loss of $ 16 million in Q1 2014. As of March 31, 2015, net debt decreased by $ 545 million compared to March 31, 2014. Net debt to EBITDA ratio improved to 3.70 from 4.08 as of March 31, 2014