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TMK Announces 1Q 2020 Operational Results

The following contains forward-looking statements concerning future events. These forward-looking statements are based on current information and assumptions of TMK management concerning known and unknown risks and uncertainties.

TMK, one of the world’s leading producers of tubular products for the oil and gas industry (the “Group’), announces its operational results for the first quarter of 2020.

The Group’s results include the operational results of the Russian and European divisions represented by production assets located in Russia, Romania and Kazakhstan.

For comparison purposes, the Group’s operational results are presented net of the operational results of the American division.   

1Q 2020 Summary Results

(thousand tonnes)

1Q 2020 vs. 1Q 2019
- Total pipe shipments declined by 5% year-on-year, to 727 thousand tonnes, due to a decrease in seamless pipe shipments at both the Russian and European divisions, reflecting an unfavourable economic environment and oil price volatility.
- Seamless pipe shipments were down 10% year-on-year, mainly due to lower shipments of seamless OCTG pipe at the Russian division (down 11% year-on-year) and weaker demand for industrial seamless pipe at the European division.
- Welded pipe shipments increased by 8% year-on-year, due to higher shipments of large diameter and industrial welded pipe at the Russian division.

1Q 2020 vs. 4Q 2019

- Total pipe shipments declined by 7% quarter-on-quarter, mainly due to lower shipments of seamless pipe, reflecting an unfavourable economic environment and oil price volatility.
- Seamless pipe shipments were down 9% quarter-on-quarter, due to weaker demand for seamless line pipe and seamless OCTG (seamless OCTG shipments were down 3% quarter-on-quarter) at the Russian division and lower shipments of industrial seamless pipe at the European division.
- Welded pipe shipments were virtually flat, supported by higher shipments of large diameter pipe, which compensated for a lower demand for welded industrial pipe at the Russian division.

Igor Korytko, CEO of TMK, said:

 “In 1Q 2020, we saw a quarter-on-quarter decline in our total pipe shipments at both the Russian and European divisions. The current challenging macro environment globally and significant oil price volatility have put pressure on pipe consumption in all our main markets.

Although the Russian oil and gas pipe market traditionally shows certain resistance towards drops in oil prices, we do not expect the situation to improve in the second quarter. The market environment will most likely continue to negatively impact demand for our products, including seamless OCTG pipe.”

2Q 2020 Outlook

In both Russia and Europe, we expect the overall demand for the Group’s products to remain under pressure in the second quarter of 2020, due to the continued unfavourable macroeconomic environment and oil price volatility.

TMK Announces 1Q 2020 Operational Results