Interpipe, the international vertically integrated pipe and wheel company, in January-September 2020 received $ 216.394 million in EBITDA, which is 8% more than in the same period last year.
According to a press release of the company, based on the unaudited IFRS consolidated financial statements for the nine months of 2020, in January-September revenue fell by 23%, to $ 660 million, capital investments by 34%, to $ 27 million.
The press release emphasizes that the company’s net debt has reached a de-minimis level of $ 12 million with a net leverage ratio (net debt to EBITDA) that has dropped to almost zero (0.05x).
In the third quarter of 2020, the company’s revenue decreased by 12% compared to the previous quarter, to $ 192 million, EBITDA increased by 7%, to $ 67 million, the amount of capital investments increased by 12%, to $ 9 million.
“In Q3 2020 Interpipe operated in a quite challenging environment across all markets. The COVID-19 pandemic as well as oil and gas prices downturn led to the global decline in demand for pipes, particularly, OCTG products. Moreover, lockdowns and reduction of freight turnover hit global railway wheel market,” the report says.
“In the first nine months of 2020, Interpipe’s overall revenue declined by 23% y-o-y to $ 660 million primarily due to a decline in pipe sales volumes and prices. Revenue from pipes shrank by 35% y-o-y to $ 349 million whereas the railway product revenue decreased by 6% y-o-y to $ 216 million,” according to the document.
“Nevertheless, Interpipe managed to achieve а sound nine-month 2020 EBITDA which amounted to $ 216 million, up by 8% y-o-y. On the back of the COVID-19 pandemic and reinstatement of the anti-dumping duty in the Customs Union the railway product segment was the main contributor to the EBITDA growth: its pass-through EBITDA went up by 24% y-o-y to $ 161 million and comprised 75% of the total EBITDA for the nine months of 2020,” it said.
“At the same time, the pipe segment EBITDA for the first nine months of 2020 drastically dropped by 79% y-o-y to $ 10 million despite stable sales of linepipes and some recovery of OCTG in Q3 2020,” it said.
“As of September 30, 2020, gross debt went down substantially to $ 122 million following the partial redemption of the notes in amount of $ 97 million in August 2020. In addition, net debt achieved an unprecedently low level of $ 12 million bringing down consolidated net leverage ratio (net debt to EBITDA) almost to zero (0.05x),” the report says.
“Despite extremely harsh business environment in Q3 and the first nine months of 2020 Interpipe kept showing a solid financial performance. The company retrieved its full financial stability and flexibility having achieved effectively a zero net leverage. Our progress and substantially improved credit profile have been also appreciated and confirmed by international credit rating agencies – Fitch Ratings and S&P Global – assigning to Interpipe ‘B’ rating with stable outlook,” CEO at Interpipe Fadi Hraibi commented on the results.
