In January-June of this year, the international vertically integrated pipe and wheel company Interpipe reduced its net profit by about 74.4% compared to the same period last year, to $29.431 million from $115.529 million.
According to the company’s interim report on operating and financial results for the second quarter and the first half of 2021, pre-tax profit in January-June decreased 58.3%, to $50.766 million from $123.495 million in the same period in 2020.
At the same time, operating profit halved – to $62.847 million from $128.058 million.
Interpipe received $111.209 million EBITDA in the first half of this year, which is 25.4% less than the same period last year ($148.980 million). The company’s revenue during this period decreased by 1.7%, to $460.471 million, while capital investments increased by 66%, to $31 million.
In addition, Interpipe increased its free funds from $96.631 million at the beginning of this year to $206.008 million by the middle of the year. In the same period last year, Interpipe reduced free funds from $256.148 million (at the beginning of 2020) to $186.790 million (as of mid-2020).
As reported in the company’s press release, Interpipe’s net debt at the end of the first half of 2021 was $199 million, while the net leverage ratio (net debt to EBITDA) remained stable at 0.9x.
In the second quarter of this year, revenue increased by 29% compared to the previous quarter, to $260 million, EBITDA increased by 75%, to $71 million, and the amount of capital investments increased by 20%, to $14 million.
Capex in new projects tripled year over year, to $21 million.
As of June 30, 2021, the company’s total debt increased to $199 million following the successful placement of a new $300 million eurobond issue with a rate of 8.375% maturing in 2026. The net leverage ratio remained stable at 0.9x.
Interpipe in January-March this year reduced its net profit by 90.4% compared to the same period last year, to $12.826 million from $133.064 million. In the second quarter, revenue decreased by 19.9%, to $200.952 million, EBITDA – by 53%, to $40 million, the amount of capital investments increased by 58%, to $17 million. Net debt was $53 million with the net leverage ratio of 0.2x. As of March 31, 2021, the company’s total debt fell to $110 million following the full redemption of the 2024 eurobonds on January 26, 2021, keeping the net leverage ratio low at 0.2x.
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 all over the world through a chain of commercial offices located in the CIS, Europe, the United States and the Middle East.
Electric steelmaking complex Interpipe Steel, part of international vertically integrated pipe and wheel company Interpipe (Dnipro), in January-July of this year increased steel production, according to recent data, by 19.9% compared to the same period last year, to 537,000 tonnes.
As the company told Interfax-Ukraine, 79,000 tonnes of steel were produced in July.
In 2020, the company reduced steel production by 11.2% compared to 2019, to 758,700 tonnes.
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 all over the world through a chain of commercial offices located in the CIS, Europe, the United States and the Middle East.
In January-June of this year, the Ukrainian industrial company Interpipe increased supplies of Oil Country Tubular Goods (OCTG) to the United States due to a surge in activity in the oil and gas sector amid rising prices for hydrocarbons, First Deputy CEO of Interpipe Denys Morozov has said in an interview with Metal Expert publication.
According to him, this is a positive moment – American companies have resumed drilling, and now is the “right time” for Interpipe to increase supplies of threaded OCTG pipes, including premium and semi-premium products.
“We are actively engaged in its production and promotion. In the first half of 2021, Interpipe has already increased the supply of OCTG pipes to the United States. We expect that positive dynamics will continue in the second half of this year,” Morozov said.
At the same time, he pointed out a number of restrictions on the supply of pipes to the United States. Thus, the U.S. Department of Commerce intends to impose duties on seamless line pipes at a rate of 23.75%.
At the same time, he said that Interpipe continues supplies to the U.S. market, but in the future it will study their economic efficiency with the hope that new relations will be built with new U.S. President Joe Biden. Accordingly, Ukraine will be able to re-start negotiations on the abolition of section 232, which is a significant barrier to the growth of supplies.
The first deputy CEO added that last year the company took a number of steps to promote its products in the Middle East region, the goal is to get into the league of premium pipe suppliers.
“In the Middle East, we continue to implement our strategy aimed at expanding our presence, looking for new niches, customers and increasing supplies. This year we plan to complete prequalification from the Emirati giant ADNOC. In general, the Middle East is a region with traditionally stable oil production and stable pipe consumption. Therefore, it is only natural that we expect sales growth in both segments: both OCTG and line pipes,” Morozov said.
According to him, the main problem in the markets of the countries of Central Asia is great difficulties with financing projects, since local companies do not have enough money to implement all projects at once. Now, amid high oil prices, the financing situation has improved somewhat. Accordingly, pipe consumers in Uzbekistan, Turkmenistan and Azerbaijan resumed purchases. The positive dynamics is expected to continue in the second half of the year.
Concerning supplies to the EU, he said that at the moment it is impossible to increase sales to the EU countries due to quotas, despite the presence of deferred demand in this market. The company chooses the pipe quota allocated to Ukraine, but after its use the supplies stop. From time to time it is possible to use part of the other countries quota, but these are small amounts.
In Ukraine, Interpipe has completed several contracts for the supply of UPJ-M, UPJ-P and UPJ-F premium pipes for domestic private oil and gas companies. But the volume of drilling and consumption of OCTG pipes in the country increased insignificantly.
In 2021, the volume of supplies to the Ukrainian market did not decrease. Moreover, it is likely that even a slight increase will be recorded by the end of the year. But if we compare with the results of 2018-2019, then consumption has not yet returned to the pre-crisis level. For example, if in 2018 Ukrgazvydobuvannia purchased about 70,000 tonnes of threaded pipes, and half of them were of premium assortment, now the total consumption by this state-owned company is 20,000 tonnes.
“We hope that the current relatively high gas prices will stimulate oil and gas companies to increase the volume of drilling and consumption of our pipes. Perhaps, in the second half of the year we will see improvements, but so far these are only our forecasts,” Morozov said.
According to the expert, there is no significant growth in the machine-building segment either; consumption by machine-building companies is correlated with the growth / decline of the country’s GDP. Interpipe does not forecast any sharp surges until the end of the year, so the sales of machine-building pipes are likely to remain at last year’s level.
The market is expected to stabilize in the near future and the Novomoskovsk plant will resume normal operations. In turn, the company sold a record amount of steel billets to third customers this year.
The Ukrainian industrial company Interpipe is increasing the volume of deliveries of premium products and expanding the list of countries where they are used, according to the company’s Facebook page.
At the same time, it is noted that pipes with premium sleeveless UPJ-F connection are successfully operated in Uzbekistan.
“At the beginning of the year, we talked about the supply of pipes with a sleeveless joint of our own design UPJ-F to our permanent partner, Uzbekneftegaz. In the second quarter, such casing pipes of two diameters – 139.7 mm and 193.7 mm – were successfully run, showed high performance and received positive feedback from the client,” the report says.
The press release specifies that Ukrainian pipes with UPJ-F are used to produce gas in difficult geological conditions. The absence of a sleeve makes it easier to run pipes in wells with complex profiles or in horizontal sections. This connection expands the capabilities of customers in the field of well building, accelerates drilling and guarantees the highest level of gas tightness.
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 around the world through a network of sales offices located in the key markets of the CIS, the Middle East, North America and Europe. In 2020, Interpipe sold 662,000 tonnes of finished products, including 192,000 tonnes of railway products. Railway products are sold under the KLW brand.
Interpipe employs 11,000 people. In 2020, the company transferred UAH 2.54 billion to the budgets of all levels.
Interpipe, a Ukrainian industrial company, in January-June of this year increased payment of taxes and fees to the budgets of all levels and extra-budgetary funds by 10.4% compared to the same period last year, to UAH 1.49 billion, the company’s Facebook page says.
At the same time, it is specified that the favorable situation on the external markets of pipe and railroad products allowed the enterprises of Interpipe to increase production volumes. The demand on the Ukrainian market continues to stagnate.
“Moreover, the main risk in the second half of the year is the uncontrolled export of scrap metal. Already in the summer the company is experiencing a serious shortage of raw materials, which may lead to a decline in production and, accordingly, a decrease in tax payments,” the press release said.
As reported, Interpipe in the first quarter of 2021 increased payment of taxes and fees by 4% compared to the fourth quarter of last year, to UAH 590 million.
In 2020, the company paid UAH 2.54 billion in taxes and fees, reducing payments by 22% due to a drop in demand because of the coronavirus. At the same time, in the first quarter of 2020, the company increased payment of taxes and fees by 3% compared to the same period in 2019, to UAH 803 million. In the first half of 2020, Interpipe reduced payment of taxes and fees by 10%, to UAH 1.35 billion due to the coronavirus pandemic and a decrease in demand for products. For the nine months of 2020, the company paid almost UAH 2 billion in taxes and fees.
In 2019, Interpipe increased tax payment by 50% compared to 2018, to UAH 3.25 billion.
The Ukrainian industrial company Interpipe intends to implement a number of projects in the next three years, taking into account the environmental component in the amount of $100 million, Denys Morozov, the First Deputy Director General of Interpipe, said at the first international forum “Decarbonization of the Steel Industry: a Challenge for Ukraine.”
“If we do not engage in decarbonization, then in the next 20-30 years the climate can be irreversibly changed,” Morozov stated.
According to him, in addition to an economic effect, all these investments have an obligatory environmental component. Among the projects, the top manager highlighted the construction of a wheelset assembly workshop for the EU and U.S. markets, the construction of a new thermal department at Interpipe Niko Tube, and the installation of a new hydraulic press at Interpipe Nyzhniodniprovsky Pipe Rolling Plant. Thanks to the implementation of these projects, both emissions of harmful substances and water consumption will be reduced.
The company will also continue to work on further reducing emissions of CO2 and other harmful substances, waste treatment, and increasing energy efficiency of production.
The expert stated that the issues of climate and decarbonization of the economy are now on the agenda of all the leading countries of the world. The European Union has adopted a special program called Green Deal, according to which the achievement of climate neutrality on the European continent is planned by 2050. The decarbonization of the metallurgical industry plays an important role in it.
According to his presentation, in all developed countries the share of electrometallurgy in total steel production is dominant or significant. Thus, the leaders are the countries of the Middle East (94%), Mexico (83%), the United States (71%) and Turkey (69%). India (56%), Canada (46%) and the European Union (42%) are not far behind.
“In this regard, Ukraine looks like an outspoken outsider – the share of electrometallurgy does not exceed 5%,” Morozov noted, urging to increase it.
