TMK posts $104 million net profit in 2010, foresees strong pipe demand

Russia's largest oil and gas pipe producer TMK has announced that in 2010 its revenue went up by 61 percent year on year to $5.58 billion, with its net profit increasing to $104 million from a net loss of $324 million in 2009, due to the strong recovery in demand across all key markets, higher output and pricing improvement. TMK's adjusted EBITDA almost tripled in 2010 to $942 million.
 
Accordingly, in 2010, TMK's total steel pipe sales volume increased by 43 percent year on year to 3.962 million mt, including 2.119 million mt of seamless steel pipes. TMK's Russian division increased its sales by 30 percent year on year to 2.99 million mt, its American division sales volumes amounted to 804,000 mt, a 125 percent increase over 2009, while its European division saw a 48 percent year-on-year rise in its sales to 169,000 mt.
 
Specifically, in 2010, TMK's OCTG sales volumes increased by 43 percent to 1.478 million mt, driven by recovery in drilling activity in both Russia and the US, its line steel pipe sales volumes grew by 52 percent to 761,000 mt on the back of strong demand from Russian and the US oil and gas companies, while its large diameter (LD) steel pipe sales volume more than doubled over 2009 and came in at 700,000 mt, driven by the ongoing construction of major pipeline projects in Russia.
 
In 2011, TMK expects demand for pipe products to remain strong driven by high oil prices and continuing economic recovery.
 
"The consumption of large diameter pipes in Russia reached record levels in 2010 and is expected to hold up in 2011, driven by the construction of the major pipeline projects of Gazprom and Transnef, such as Ukhta-Torzhok, Pochinki-Gryazovets and others," reads TMK's statement
 
In 2011, TMK's Russian division plans to increase OCTG and line pipe shipments by around seven percent, while LD shipments are expected to exceed 700,000 mt. In addition, in 2011 TMK's North American division TMK IPSCO expects to increase product shipments by around 10 percent. Healthy shipment volumes should allow TMK to "sustain profits compared to the second half of 2010."