In its financial results according to international financial reporting standards (IFRS) for the first quarter of the current year, Russian pipe producer TMK registered a net profit of $8.33 million, decreasing from a net profit of $42.02 million recorded in the same quarter of 2017.
In the first quarter this year, the company's sales revenues increased by 35 percent year on year to $1.27 billion, driven by improved results at all three divisions (Russian, American and European). In the given period, TMK's adjusted EBITDA rose by 13 percent compared to the same quarter of the previous year to $160.18 million. The growth in adjusted EBITDA was partially restrained by higher year-on-year raw material prices, which also put additional pressure on the adjusted EBITDA margin which decreased from 15 percent in the first quarter of 2017 to 13 percent in the first quarter of this year.
In Russia, TMK expects seamless OCTG consumption to remain strong in the current year with weak large diameter pipe demand, due to the completion or rescheduling of a number of major pipeline construction projects. In the second half of this year, TMK expects an easing of the recent pressure on margins, driven by growing raw material prices.
Meanwhile, TMK’s European division anticipates its financial results for 2018 to be stronger compared to 2017 due to growing pipe demand and a more favorable product mix resulting mostly from the newly-installed heat treatment facility at its Romania-based subsidiary TMK-ARTROM.