20 Apr 2016 10:33
PAO TMK / Miscellaneous - Urgent PriorityTMK Announces 1Q 2016 Operational Results 20-Apr-2016 / 10:33 CET/CESTDissemination of a Regulatory Announcement, transmitted by EquityStory.RS,LLC - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- 20 April 2016 PRESS RELEASE TMK Announces 1Q 2016 Operational Results The following contains forward looking statements concerning future events.These forward looking statements are based on current information andassumptions of TMK management concerning known and unknown risks anduncertainties. TMK, one of the world's leading producers of tubular products for the oiland gas industry, announces its operational results for the first quarterof 2016. 1Q 2016 Summary Results (thousand tonnes) Products 1Q 2016 4Q Q-o-Q, % 1Q 1Q 2015 Y-o-Y, % 2015 2016Seamless pipe 564 613 -8.1% 564 619 -8.9%Welded pipe 281 325 -13.4% 281 376 -25.2%Total 845 938 -9.9% 845 995 -15.1%includingOCTG 312 388 -19.6% 312 425 -26.5% 1Q 2016 Highlights - In the first quarter of 2016, TMK shipped a total of 845 thousand tonnes of steel pipe to consumers, down 9.9% q-o-q and 15.1% y-on-y. The drop in shipments was mainly due to the continuing decline in shipments in the American division. - In 1Q 2016, seamless pipe shipments amounted to 564 thousand tonnes, down 8.1% q-o-q and 8.9% y-o-y due to American division shipments decline. However, European division showed growth of shipments. - In 1Q 2016, shipments of welded pipe dropped by 13.4% q-o-q and 25.2% y-o-y to 281 thousand tonnes, due to lower shipments of welded pipe in the American division. OCTG pipe shipments amounted to 312 thousand tonnes in 1Q 2016, down 19.6%q-o-q and 26.5% y-o-y. The decline was due to lower shipments of weldedOCTG pipe in the American division, as well as changes in Russian divisionOCTG sales structure. 1Q 2016 Results by Division Russian division 1Q 2016 vs. 4Q 2015 In 1Q 2016, TMK's Russian division saw a 6.5% quarter-on-quarter decline inits shipments of tubular products to 741 thousand tonnes (1). Seamless pipe shipments were down 3.4% to 481 thousand tonnes. In 1Q 2016,OCGT shipments amounted to 271 thousand tonnes, down 9.2% q-o-q. Welded pipe shipments dropped by 11.8% to 260 thousand tonnes. In 1Q 2016,LDP shipments were down 10.7% to 141 thousand tonnes, against the backdropof a record-high consumption of large diameter pipe in 4Q 2015. Yet TMK kept its market share in main business segments. (1) This includes shipments from TMK's Russian facilities, TMK-Kaztrubprom and TMK GIPI to the Russian, CIS and non-CIS markets (excluding North America). 1Q 2016 vs. 1Q 2015 The total amount of shipments by the Russian division grew 2.4% y-o-y. Seamless pipe shipments were up 4.7%. Seamless OCTG shipments grew 8.5%,driven by the rise in oil drilling activity across Russia in 2016. In 1Q2016, welded pipe shipments were almost flat year-on-year. LDP shipmentswere down 9.0% y-o-y, against the backdrop of a record-high demand forlarge diameter pipe in 2015. American division 1Q 2016 vs. 4Q 2015 According to Baker Hughes, in 1Q 2016, the active rig count in the USAtotalled 464 rigs, a 34% drop q-o-q, as many oil and gas productionprojects continue to be suspended due to low global oil prices. Besides,the continued significant supply of imports to the American pipe market isputting pressure on prices. In 1Q 2016, TMK's American division shipped 63 thousand tonnes of tubularproducts, down 40.9% q-o-q. Shipments of seamless pipe dropped 45.6% to 42 thousand tonnes. SeamlessOCGT shipments amounted to 38 thousand tonnes, a 45.8% dropquarter-on-quarter. Welded pipe shipments declined 28.9% q-o-q to 21 thousand tonnes. 1Q 2016 vs. 1Q 2015 In 1Q 2016, the American division's shipments were down 72.5% y-o-y, due tosignificant declines in drilling in the USA throughout 2015, coupled with asignificant inventory build-up. Seamless pipe shipments were down 64.5% in 1Q 2016, while seamless OCTGshipments dropped 62.7% y-o-y. In 1Q 2016, welded pipe shipments in the American division declined 80.9%y-o-y. European division 1Q 2016 vs. 4Q 2015 Despite the flatness of European industrial pipe market in 1Q 2016, theEuropean division increased its shipments of seamless pipe by 6.9% to 41thousand tonnes. 1Q 2016 vs. 1Q 2015 In 1Q 2016, total shipments of tubular products in the European divisionremained virtually flat year-on-year. Premium Segment In 1Q 2016, the demand for TMK UP(TM) premium threaded connections remainedweak, due to the suspension of complex oil and gas production projects inRussia and the USA, where premium products are widely used. Nevertheless,TMK successfully bid for tenders of oil and gas companies for supplies andmaintenance of premium tubular products during the first quarter. Inparticular, in 2Q 2016, TMK will supply about 14 thousand tonnes of casingpipe with TMK UP(TM) premium threaded connections to Rosneft. In addition,TMK NGS-Buzuluk, the part of TMK Oilfield Services, won a tender to providetechnology and engineering supervision services for running casing with TMKUP(TM) into wells off the coast of Sakhalin for Gazprom. 2Q 2016 Outlook According to TMK, the Russian oil and gas pipe market will be flat in 2Q2016. The company expects to maintain current shipment volumes of OCTG andline pipe. In the United States, the demand for oil and gas pipes will remain weak dueto further declines in drilling volumes, large inventories, and continuedlow-priced imports. The American pipe market is not expected to recoverbefore the end of 2016. Industrial pipe consumption in the European pipe market will be stable in2Q 2016, with the demand expected to increase slightly as the constructionand repair season starts. *** For further information regarding TMK, please, visit www.tmk-group.com aswell as download the YourTube iPad application from the App Storehttps://itunes.apple.com/ru/app/yourtube/id516074932?mt=8&ls=1 TMK on Facebook - https://www.facebook.com/TMKGroupEN *** TMK (www.tmk-group.com) TMK (LSE: TMKS) is a leading global manufacturer and supplier of steel pipefor oil and gas industry, operating more than 30 production sites in theUnited States, Russia, Canada, Romania, Oman, UAE and Kazakhstan and twoR&D centers in Russia and the USA. In 2015, TMK's pipe shipments totaled3.9 million metric tons. The largest share of TMK's sales belongs to highmargin oil country tubular goods (OCTG), shipped to customers in over 80countries. TMK delivers its products along with an extensive package ofservices in heat treating, protective coating, premium connectionsthreading, warehousing and pipe repairing. TMK's securities are listed onthe London Stock Exchange, the OTCQX International Premier trading platformin the U.S. and on the Moscow Exchange MICEX-RTS. TMK's assets structure by division: Russian division: American division:Volzhsky Pipe Plant; 12 plants of TMK IPSCO;Seversky Tube Works; OFS International LLC;Taganrog Metallurgical Works; TMK Completions. European division:Sinarsky Pipe Plant; TMK-ARTROM;TMK-CPW; TMK-RESITA.TMK-Kaztrubprom; Middle East Division:TMK-INOX; TMK GIPI (Oman).TMK-Premium Service;TMK Oilfield Services;TMK CHERMET. TMK Corporate Communications Alexander GoryunovTel: +7 (495) 775-7600E-mail: pr@tmk-group.com --------------------------------------------------------------------------- 20-Apr-2016 The EquityStory.RS, LLC Distribution Services include RegulatoryAnnouncements, Financial/Corporate News and Press Releases.Media archive at www.dgap.de/ukreg --------------------------------------------------------------------------- Language: English Company: PAO TMK 40/2a Pokrovka 105062 Moscow Russia Phone: +7 495 775-7600 Fax: +7 495 775-7601 E-mail: tmk@tmk-group.com Internet: tmk-group.com ISIN: US87260R2013 Category Code: MSCU TIDM: TMKS Sequence Number: 3104 Time of Receipt: 20-Apr-2016 / 10:30 CET/CEST End of Announcement EquityStory.RS, LLC News Service --------------------------------------------------------------------------- 455821 20-Apr-2016UK-Regulatory-announcement transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.