The Brazilian subsidiary of French steel tubing producer Vallourec said financial results are expected to show improvement in the ongoing year, following a period of recession in Latin America’s largest economy.
Vallourec Solucoes Tubulares do Brasil (VSB) said improved financial metrics would come with increased tube prices, a condition it expects to take place by the end of the year.
Manfred Leyerer, financial director at VSB, told Brazilian newspaper Valor the company’s best chance for improving its financial performance is in the US.
Last year, when oil prices started to spike, shale gas activity in the US started to grow, increasing demand for tubes. Vallourec’s facility in the US couldn’t attend the growing demand, so the Brazilian subsidiary needed to help by providing Brazilian tubes.
“But this operation has a limited participation in our business and it seems to have a deadline (to end),” the executive said, adding Brazil sent 341,000 mt of steel tubing to support the US plant.
Brazilian oil producer Petrobras, a major consumer of tubes, has started to improve its financial planning, improving prospects for Vallourec in Brazil.
“What we see now is a much more consistent strategic planning, which is in line with the reality and our own analysis. We have the feeling Petrobras found the way to exit a crisis within three or five years,” he said.
Leyerer said 2016 was the worst year the company ever had. The executive, however, didn’t disclose how much the company expects to grow in 2017.