The international vertically integrated pipe and wheel company Interpipe received $204.441 million of net profit in 2022, which is 2.2 times more than the previous year ($91.316 million).
According to the company’s annual report, last year’s pretax profit amounted to $220.579 million compared to $110.907 million in 2021.
The revenue in 2022 decreased by 13.4% – to $981.330 million from $1 billion 132.9 million a year earlier.
At the same time, Interpipe increased its free cash flow from $109.627 mln to $153.777 mln during the year.
As previously reported, due to the war, Interpipe’s EBITDA in 2022 decreased by 11% YoY to $204 mln. Steel output in 2022 decreased 39% to 595 thousand tons, pipes – 36%, to 393 thousand tons, railroad products – 51%, to 84 thousand tons.
Sales of products in the reporting period decreased by 37%, to 524 thousand tons, including pipes – by 36%, to 384 thousand tons, railway products – by 50%, to 87 thousand tons. Revenue from sales decreased by 13% to $981 mn, net leverage remained at a strong and stable level of 1.1x.
It was noted, however, that 2022 was an extremely difficult year for the company. After a large-scale invasion by Russian troops at the end of February, Interpipe’s management was forced to halt all production facilities for employee safety reasons. It was only in April and May that production was gradually resumed at all enterprises of the group.
However, it was not possible to reach the pre-war production level because Interpipe had to rearrange the logistics chain of shipping finished products through the ports of the European Union due to the blockade of the Black Sea ports, Russian bombing of the transport infrastructure and shortage of fuel. This led to a 2.5-3.5-fold increase in transportation costs, depending on the route.
In the fourth quarter of 2022, Russia began regularly attacking Ukraine’s power infrastructure, which led to several blackouts at the national and regional levels. As a result of the resulting power shortages in the country, strict limits were imposed on power consumption by industrial consumers, including Interpipe’s enterprises, which had a negative impact on production.
CEO of Interpipe Andrei Korotkov noted that in the last year’s very difficult conditions, the company retained its workforce and industrial assets.
“Unfortunately, we have not managed to return to the pre-war level of finished product production. At the same time we expect to somewhat improve production results in 2023, including due to the extension of the cancellation of all quotas and duties on Ukrainian goods by the USA and the EU. In addition, Interpipe remains a conscientious and reliable partner to its creditors and investors. The company continues to service and repay its loan obligations in full since the beginning of the full-scale invasion,” the CEO explained.
“Interpipe is a Ukrainian industrial company producing seamless pipes and railroad wheels. The company supplies its products to over 80 countries all over the world through a network of sales offices located in key markets in the Middle East, North America, and Europe. In 2022, the company sold 384 thnd mt of tubes and 87 thnd mt of railroad products. The company sells its railroad products under the KLW brand.
Interpipe has 10 000 employees. In 2022 the company transferred 2.8 billion hryvnias to the budgets of all levels.
The company has five industrial assets: “Interpipe Nizhnedniprovsk Tube Rolling Plant (NTZ)”, “Interpipe Novomoskovsk Tube Plant (NMTZ)”, “Interpipe Niko-Tube”, “Dnepropetrovsk Vtormet” and the electric steelmaking complex “Dneprostal” under the “Interpipe Steel” brand.
The ultimate owner of Interpipe Limited is Ukrainian businessman Viktor Pinchuk and his family members.
