20 Oct 2014 09:07
OAO TMK / Miscellaneous 20.10.2014 09:07 Dissemination of a Regulatory Announcement, transmitted byEquityStory.RS, LLC - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement.--------------------------------------------------------------------------- October 20, 2014 PRESS RELEASE TMK Announces 9M 2014 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 nine months of2014. 3Q 2014 and 9M 2014 Highlights - During the nine months of 2014, TMK shipped a total of 3,159 thousand tonnes of steel pipe, down 1.3% year-on-year. In 3Q 2014, shipments grew by 6.7% quarter-on-quarter. - During the nine months of 2014, seamless pipe shipments grew by 2.3% year-on-year to 1,848 thousand tonnes. Shipments in 3Q 2014 increased by 3.3% quarter-on-quarter to 621 thousand tonnes. - During the nine months of 2014, welded pipe shipments dropped by 5.9% year-on-year to 1,311 thousand tonnes due to weaker demand for large diameter pipe (LDP) and industrial pipe. In 3Q 2014, welded pipe shipments were up 11.4% quarter-on-quarter, reaching 482 thousand tonnes. - Shipments of OCTG pipe, TMK's core product, were up 5.5% year-on-year, reaching 1,417 thousand tonnes in the nine months of 2014. In 3Q 2014, the shipments of this product dropped by 7.1% quarter-on-quarter to 446 thousand tonnes due to a seasonal reduction in oil and gas drilling in Russia. - Shipments of premium connections for the nine months of 2014 increased to 649 thousand joints, up 13.3% year-on-year. In 3Q 2014, shipments of premium products were up 20.7% quarter-on-quarter, reaching 245 thousand joints. 3Q 2014 and 9M 2014 Summary Results (thousand tonnes) Product 3Q 2014 2Q Q-o-Q, % 9M 2014 9M 2013 Y-o-Y, % 2014Seamless pipe 621 601 3.3% 1,848 1,806 2.3%Welded pipe 482 433 11.4% 1,311 1,393 -5.9%Total 1,103 1,034 6.7% 3,159 3,200 -1.3%includingOCTG 446 480 -7.1% 1,417 1,343 5.5% 3Q 2014 and 9M 2014 Market Overview and Performance by Division Russian Division In the nine months of 2014, TMK's Russian division shipped 2,144 thousandtonnes (1) of tubular products, down 4.3% year-on-year. In 3Q 2014, thedivision's shipments were up 9% quarter-on-quarter, reaching 762 thousandtonnes. In January-September 2014, seamless pipe shipments totalled 1,329 thousandtonnes, a decline of 2% year-on-year. In 3Q 2014, shipments were up 1.3%quarter-on-quarter to 440 thousand tonnes. In the nine months of 2014, shipments of seamless OCTG pipe remained almostflat year-on-year at 754 thousand tonnes, while dropping by 18.3%quarter-on-quarter to 217 thousand tonnes in 3Q 2014 due to a seasonalreduction in oil and gas drilling in Russia. In the nine months of 2014, shipments of seamless line pipe remained flatyear-on-year at 347 thousand tonnes, while growing 34.6% quarter-on-quarterto 134 thousand tonnes in 3Q 2014. The increase was due to the launch of anumber of pipeline construction and related infrastructure projects. In 3Q 2014, shipments of seamless industrial pipe went up by 28.4%quarter-on-quarter to 89 thousand tonnes, driven by a seasonal rise indemand for this product. During the nine months of 2014, as a result ofconsiderably weaker demand from industrial companies in 1H 2014, shipmentswent down by 11.8% year-on-year to 227 thousand tonnes. Welded pipe shipments declined by 7.7% to 815 thousand tonnes in the ninemonths of 2014 as a result of lower demand for LDP and line pipe. Duringthe nine months of 2014, LDP shipments were down 14.3% to 300 thousandtonnes due to the completion of several projects in the CIS countries. In3Q 2014, LDP shipments were up 33.1% quarter-on-quarter to 128 thousandtonnes as several major pipeline projects got underway in Russia(Bovanenkovo-Ukhta - 2, Southern Corridor, Kuyumba-Taishet and others). Inthe same quarter, welded line and industrial pipe shipments amounted to 91and 100 thousand tonnes, up 18.3% and 9% quarter-on-quarter, respectively. (1) This includes shipments from TMK's Russian facilities, TMK-Kaztrubpromand TMK GIPI to the Russian, CIS and non-CIS markets (excluding the NorthAmerican market). American Division In the nine months of 2014, TMK's American division increased its shipmentsto consumers by 6.1% year-on-year, reaching a total of 900 thousand tonnesof tubular products (2). In 3Q 2014, the division's shipments were up 4.9%quarter-on-quarter to 308 thousand tonnes. In the nine months of 2014, seamless pipe shipments were 404 thousandtonnes, up 19.7%. In 3Q 2014, 148 thousand tonnes were shipped, which is anincrease of 17.9% quarter-on-quarter. In the nine months of 2014, shipments of seamless OCTG pipe were up 19.9%to 313 thousand tonnes, driven by the ongoing rise in drilling activity anddevelopment of unconventional hydrocarbon reserves in North America. In 3Q2014, shipments of this pipe were up 16.7% quarter-on-quarter, reaching 115thousand tonnes. In the nine months of 2014, shipments of seamless line pipe were down 33.9%to 26 thousand tonnes. In 3Q 2014, the division shipped 8 thousand tonnesof this pipe, up 2.5% quarter-on-quarter. These changes in demand aretypically inherent in the field development cycle. The division's shipments of seamless industrial pipe increased by 73.8% to66 thousand tonnes in the nine months of 2014, driven by a rise in demandfrom regional and industrial markets. In 3Q 2014, 25 thousand tonnes ofseamless industrial pipe were shipped, up 30.7% quarter-on-quarter. In the nine months of 2014, shipments of welded pipe were down 2.8% to 496thousand tonnes. In 3Q 2014, shipments of welded pipe amounted to 160thousand tonnes, down 4.8% quarter-on-quarter. In January-September of 2014, the division's shipments of welded OCTG piperose 4.1% to 339 thousand tonnes, while dropping 4.4% quarter-on-quarter to110 thousand tonnes in 3Q 2014, as planned reductions in the production oflow margin items prior to the U.S. OCTG trade case decision took effect in3Q 2014 deliveries. Welded line pipe shipments in the nine months of 2014 fell by 2.8%year-on-year to 73 thousand tonnes and rose by 7.6% quarter-on-quarter to26 thousand tonnes. In the nine months of 2014, welded industrial pipe shipments were down23.4% to 84 thousand tonnes. In 3Q 2014, shipments of this pipe amounted to24 thousand tonnes, down 16.2% quarter-on-quarter. These reductions werethe results of the division's continued efforts to shift production fromlow margin products to more complex, higher value-added products. (2) This includes products manufactured by TMK's Russian and Romanianfacilities and sold on the North American market. European Division The European pipe market continues its gradual recovery after a lastingstagnation. However, the growth in demand for seamless industrial pipe, thedivision's core product, remains limited. The division shipped 115 thousand tonnes of seamless pipe in the ninemonths of 2014, up 2% year-on-year. In 3Q 2014, the division's shipmentswere down 20.4% quarter-on-quarter to 33 thousand tonnes due to atraditional summer slowdown in business activity in Europe. Premium Segment The demand for TMK UP premium connections remains high, sustained byexpansion of directional and horizontal drilling in America and Russia. TMK shipped a total of 649 thousand joints of TMK UP premium connections inthe nine months of 2014, up 13.3% year-on-year, while also boosting thequarter-on-quarter figure by 20.7% to 245 thousand joints in 3Q 2014. 4Q 2014 Outlook The Russian pipe market is likely to grow in 4Q 2014, driven by an increaseexpected in horizontal drilling and development of oil and gas fields, aswell as by the start of the new procurement season. Owing to that, TMKexpects a steady demand for oil and gas pipe, particularly seamless OCTG. The implementation of major pipeline projects in Russia will enable theCompany to increase shipments and improve product mix in the welded pipesegment, especially LDP. TMK also awaits the expansion of demand forseamless line pipe as the infrastructure projects related to trunk pipelineconstruction are carried out. In August, the US International Trade Commission (ITC) confirmed theDepartment of Commerce's decision to impose anti-dumping and countervailingduties on manufacturers from nine countries. The ITC ruling is expected tocontribute to more fair competition in the US market, better pricingenvironment, and improved performance of TMK's American division. In 4Q 2014, TMK expects shipments to remain broadly flat compared to 3Q2014, while improved product mix gives grounds to project strongerfinancials. ***For further information regarding TMK, please, visit www.tmk-group.ru aswell as download the YourTube iPad application from the App Storehttps://itunes.apple.com/ru/app/yourtube/id516074932?mt=8&ls=1 *** ТМК (www.tmk-group.ru) TMK (LSE: TMKS) is a leading global manufacturer and supplier of steelpipes for the oil and gas industry, operating 28 production sites inRussia, the U.S., Canada, Romania, Oman, the UAE, and Kazakhstan, and twoR&D centres in Russia and the U.S. In 2013, TMK's pipe shipments totaled4.3 million tonnes. The largest share of TMK's sales belongs to high marginoil 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 on the London Stock Exchange, the OTCQXInternational Premier trading platform in the U.S. and on the MoscowExchange MICEX-RTS. TMK's production assets structure: Russian Division: American Division:Volzhsky Pipe Plant; 12 plants of TMK IPSCO;Seversky Tube Works; OFS International LLC.Taganrog Metallurgical European Division:Works; TMK-ARTROM;Sinarsky Pipe Plant; TMK-RESITA.TMK-CPW; Middle East Division:TMK-Kaztrubprom; TMK GIPI (Oman);TMK-INOX; Threading & Mechanical Key Premium LLC (Abu-TMK-Premium Service; Dhabi);TMK Oilfield Services. TMK Corporate CommunicationsIlya ZhitomirskyPhone: +7 495 775 7600E-mail: pr@tmk-group.com 20.10.2014 The EquityStory.RS, LLC Distribution Services include RegulatoryAnnouncements, Financial/Corporate News and Press Releases.Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: EnglishCompany: OAO TMK 40/2a Pokrovka 105062 Moscow RussiaPhone: +7 495 775-7600Fax: +7 495 775-7601E-mail: tmk@tmk-group.comInternet: tmk-group.comISIN: US87260R2013Category Code: MSCTIDM: TMKSSequence Number: 2331Time of Receipt: Oct 20, 2014 09:05:07 End of Announcement EquityStory.RS, LLC News-Service ---------------------------------------------------------------------------UK-Regulatory-announcement transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.