The international vertically integrated pipe and wheel company (TKK) “Interpipe” in January-March of this year reduced EBITDA by 63% compared to the same period last year – to $ 15.139 million, but increased revenue from product sales by 19% – up to $239.185 million
According to the company’s press release for the first quarter, steel production decreased by 16% – to 163 thousand tons, pipes – by 12%, to 97 thousand tons, railway products – by 43%, to 23 thousand tons. At the same time, sales of products decreased by 10%, to 140 thousand tons.
The press release notes that the first two months of 2022, the global market conditions were positive for Interpipe. However, after February 24, when Russia invaded Ukraine and launched its first missile strikes, the company’s management decided to completely suspend production. The main task was to ensure the safety of employees and maintain all production facilities. This led to a decrease in pipe production in the first three months of 2022 by 12%, and railway products by 43%.
Despite the decline in operating performance, Interpipe increased its sales revenue by 19% in the first three months, mainly due to a 47% increase in sales revenue from the pipe division, to $181 million.
At the same time, EBITDA fell by 63%. In addition to the loss of sales volumes and additional logistics and transportation costs due to the intrusion on financial results, an additional negative impact was made by the rise in prices for the main raw materials: scrap metal, electricity and natural gas. For example, in the first quarter of 2022, the price of natural gas in Ukraine on average increased more than six times compared to last year, the press release states.
And about. Andrey Korotkov, General Director of Interpipe, explained that at the end of March the company began to cautiously resume shipments, and from April it began a phased launch of production. In May, Interpipe Steel’s electric steel-smelting complex started operating, and the company began to gradually increase the volume of production and shipment of finished products.
“However, unfortunately, Interpipe cannot yet return to pre-war production volumes, since the war broke the usual supply chains, as the Black Sea seaports of Ukraine are blocked, the country has a large shortage of fuel, transport infrastructure is constantly being destroyed as a result of missile strikes. New chains supply and logistics are in the process of restructuring and formation,” Korotkov said, quoted by the press service.
According to him, since the beginning of the full-scale invasion, Interpipe has been steadily paying salaries to all employees, including those who are idle. At the same time, the company, with the support of the Victor and Elena Pinchuk Foundations, joined the large-scale assistance to the Armed Forces of Ukraine, doctors and civilians, allocating more than $35 million for these purposes during the 126 days of the war.
As reported, Interpipe received $91.316 million in net profit in 2021, while in 2020 this figure was $195.116 million (a decrease of 53.2%). Revenue increased to $1 billion 132.9 million from $865.131 million.
Interpipe is a Ukrainian industrial company, a manufacturer of seamless pipes and railway wheels. The company’s products are supplied to more than 80 countries through a network of sales offices located in the key markets of the CIS, the Middle East, North America and Europe. In 2021, Interpipe sold 602 thousand tons of pipe products and 174 thousand tons of railway products. Railway products are sold under the KLW brand.
Interpipe employs 10,000 people. In 2021, the company transferred almost UAH 3 billion to the budgets of all levels.
There are five industrial assets in the company’s structure: Interpipe Nizhnedneprovsk Pipe Rolling Plant (NTZ), Interpipe Novomoskovsky Pipe Plant (NMTZ), Interpipe Niko-Tube, Dnepropetrovsk Vtormet and the Dneprostal electric steel-smelting complex under the Interpipe Steel brand .