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.
The international vertically integrated pipe and wheel company Interpipe (Dnipro) has appointed Artem Poliakov, the former director general of PJSC ArcelorMittal Kryvyi Rih, as well as the ex-vice president of ArcelorMittal Group, a new director general.
According to a press release from the company, Poliakov will take office on January 1, 2021.
“Fadi Hraibi who led Interpipe since 2016 will chair the board of directors of the company,” the report says.
“Under the leadership of Mr. Hraibi Interpipe implemented the transformation of its operating model, significantly consolidated its positions at the export markets, and entered new segments of production and sales of premium products. Interpipe also restructured its debt obligations, strengthening its financial position to the level of leaders in the Ukrainian corporate and industrial sectors,” the press release reads.
“Artem Poliakov has long-standing experience in managing large-scale industrial companies. In particular, he served as the CEO of PJSC ArcelorMittal Kryvyi Rih, and hold also the post of Vice President of ArcelorMittal Group. In addition, he worked for Lafarge Group,” according to the document.
The Antimonopoly Committee of Ukraine (AMCU) fined the Ukrainian industrial company Interpipe UAH 69.3 million for violating antimonopoly legislation.
“Today, on October 29, 2020, the Ukrainian industrial company Interpipe has received a fine from the AMCU in the amount of UAH 69.3 million for violating antimonopoly legislation. According to the decision of the AMCU, the fine was imposed in connection with the abuse of a monopoly position in the wheel supply market,” the company’s press release reported on Thursday.
At the same time, Interpipe officially declares that it categorically disagrees with such decision of the AMCU and intends to contest this decision in court.
“As a national producer, we consider the AMCU’s decision to be unfair and unreasonable, taken not on the basis of facts, but on assumptions. The Ukrainian market is open to producers from other countries, and there are no protective duties on the market,” the press release emphasizes.
At the same time, it is noted that by submitting such complaints to the AMCU, unscrupulous competitors are trying to discredit the national manufacturer in order to ensure the supply of products of Russian manufacturers to Ukraine.
The statement also recalls that unlike the Ukrainian market, the Russian Federation protected its market from Ukrainian wheels with a 39% protective duty.
Interpipe, an international vertically integrated pipe and wheel company, based on the results of activities in the second quarter of this year is expected to reduce revenue by 16% compared to the previous quarter, to $ 212 million, EBITDA by 44%, to about $ 48 million.
“We expect Interpipe’s Q2, 2020 EBITDA to amount to about $ 48 million, a 44% quarter-over-quarter plunge. Contributions to Q2, 2020 EBITDA by segment (before reallocation of steel segment EBITDA) are expected to be as follows: negative $ 5 million from pipes (flat quarter-over-quarter), $ 38 million from railway products (a 45% plunge quarter-over-quarter), and $ 15 million from steel (26% less quarter-over-quarter),” according to the estimate of Dmytro Khoroshun, an analyst from Concorde Capital, published in the investment company’s bulletin.
“Revenue from seamless pipe sales should have inched up 3% quarter-over-quarter, to about $ 104 million in Q2, 2020, driven by a 6% increase in sales volumes to 103,000 tonnes, offset by a 3% drop in average sales price to $ 1,015/tonne,” the report says.
“We estimate revenue from welded pipe sales will jump 49% quarter-over-quarter in Q2, 2020, to $ 16 million, due to a 43% gain in volume to 22,000 tonnes and a 4% rise in price to $ 746/tonne,” according to the document.
“We calculate Interpipe’s railway product segment revenue will plunge 34% quarter-over-quarter, to $ 84 million in 2Q20, as a 20% drop in sales volume to 46,000 tonnes will be exacerbated by a 17% drop in price to $ 1,822/tonne,” the expert said.
Interpipe international vertically integrated pipe and wheel company in January-March of this year increased payment of taxes and fees to the budgets of all levels and extra-budgetary funds by 3% compared to the same period last year, to UAH 803 million.
The company said on Facebook the amount of contributions to the state budget totaled UAH 547 million, to local budgets some UAH 147 million, another UAH 109 million was transferred as social security tax.
“The Ukrainian industrial company Interpipe and its assets make a significant contribution to filling the state treasury. Last year we updated the record for paying taxes and fees, but we do not stop there: according to the results of the first quarter of 2020 some UAH 803 million were transferred to the budgets of different levels. In addition, given the increased burden on regional budgets due to coronavirus, Interpipe refused tax holidays provided by the Verkhovna Rada and allocated UAH 17 million for the anti-crisis program to combat COVID-19 in Dnipro and Dnipropetrovsk region,” the company said.
As reported, Interpipe in 2019 increased payment of taxes and fees to the budgets of all levels by 50% compared to 2018, to UAH 3.25 billion. At the same time, the amount of contributions to the state budget totaled about UAH 2.167 billion (an increase of 62%), to local budgets about UAH 625 million (38% more). Another UAH 462 million (21% more) was transferred as social security tax.
PJSC Interpipe Nyzhniodniprovsky Pipe Rolling Plant (Dnipro) has built and commissioned a new warehouse at the export site of the company’s wheel-rolling shop, investing $271,000 in the project.
According to the quarterly report of the company, at the beginning of 2020, Interpipe plant provided itself with an additional warehouse for finished products, and a collection point was established for packing additional volumes of wheels in pallets.
“The new storage was organized to reduce the cost of packaging for sending railway wheels for export,” it said.
In addition, the company began using wooden pallets instead of metal cassettes for products that are shipped to Europe by truck, transported by road.
The report also states that in March steel indices in the global markets declined due to a sharp drop in demand. At the same time, the cost of scrap metal HMS 80/20 CFR Turkey fell by $20.7/tonne, or 7.6% compared to the previous month, the cost of square billets FOB Black Sea by $18.1/tonne or 4.7%.
“Most of the traditional trade outlets for steel billets of CIS production were inactive due to blocking and restrictive measures introduced by the governments during the pandemic. The demand was seen mainly in China,” the report said.
The Ukrainian market has also suffered due to protective measures in the fight against coronavirus, in particular, the hryvnia has depreciated by 14.3% since the beginning of March, construction volumes were down. The output of railway wagons also decreased.
EXPORT, INTERPIPE, PLANT, RAILWAY PRODUCTS, SHIPMENT, WAREHOUSE
