TMKS.L Regulatory News (TMKS)

18 Apr 2008 16:52

OAO TMK18 April 2008 -------------------------------------------------------------------------------- April 18, 2008 PRESS RELEASE TMK Announces Production Results for the First Quarter of 2008 OAO TMK ("TMK" or "the Company"), one of the world's largest pipe producers,today announces its production results for the 1st quarter of 2008. TMK shipped707 thousand tonnes of pipes, which is 8% less than in the 1st quarter of 2007.Despite an 8.5% decrease in demand for pipes at the Russian market in the Q1 of2008, the Company managed to increase its Russian market share to 25.7% up from24.8% in Q1, 2007. This growth was due to an increase in supplies of line pipes,including anticorrosion-coated, both seamless and welded line pipes by 7% and43% respectively. Oil and gas industry, which is now experiencing the shift tooil and gas production in challenging geological conditions, has shown greaterdemand for such pipes. The demand for such tubular goods in the CIS also enabledthe Company to increase its shipments of seamless line pipes by 16%. In Q1, 2008, TMK continued implementing its Strategic Investment Program, aimedat increasing production volumes of higher value-added tubular goods, improvingproduct quality and reducing costs. The scheduled shutdown of obsolete Pilgermills to be replaced by the state-of-the-art PQF rolling mill at Tagmet renderedsignificant impact on seamless pipe sales volumes. The Q1 2008 sales volumes ofseamless pipes decreased by 7% compared to the Q1 2007 figures and amounted to485 thousand tonnes. However, commissioning of the new 600 000 tpa high-tech PQFmill scheduled for the 3d quarter of 2008 will enable TMK to enter the marketwith new products of a higher quality, including Premium connections, and toincrease its seamless pipe shipment volumes at year end. Moreover, in Q1 of2008, despite a 6% decrease in OCTG shipments, the Company continued increasingshipment volumes of drill and tubing pipes by 40% and 2% respectively versus Q1,2007 figures. Delays associated with the implementation of large-scale pipeline projects, suchas "Eastern Siberia - Pacific Ocean Pipeline" resulted in a decline of theRussian large-diameter pipe market. This situation remains favorable for TMK, asin the Q3 of 2008 the Company is going to launch its new welding mill producinglongitudinal large-diameter pipes with up to 42 mm wall thickness, which willsignificantly enhance TMK's competitiveness and readiness prior to the launch oflarge-scale pipeline projects. Meanwhile, respective TMK's shipments in the Q1 2008 decreased by 12% amountingto 222 thousand tonnes. Nevertheless, in March, 2008, the Company increasedlarge-diameter pipes sales by 10% versus February. For the first time ever TMKshipped a 10 thousand tonnes batch of large-diameter pipes to Turkmenistan underthe contract signed with "Turkmenneft", the leading oil company in the country.Additionally, the Company started shipping its large-diameter pipes to the NordStream pipeline project. OAO "TMK" (www.tmk-group.com) Founded in 2001, TMK (LSE: TMKS) is the largest pipe producer in Russia and oneof the three global market leaders. In 2007, TMK shipped over 3 million tonnes of pipes. TMK supplies to companiesin more than 60 countries. TMK production facilities are located in Russia and Romania: • Volzhsky Pipe Plant; • Seversky Tube Works; • Taganrog Metallurgical Works; • Sinarsky Pipe Plant; • SC TMK-Resita SA; • SC TMK-ARTROM SA; • TMK Oilfield Services: • Orsky Machine Building Plant; • Truboplast pipe coating company; • TMK Central Pipe Yard; • TMK Pipe Maintenance Department. For further information please contact: TMK PR Department: TMK IR DepartmentAlexey Sotskov Alexei RatnikovTel: +7 495 775 7600 ext. 2125 Tel: +7 495 775 7600 ext. 2078Email: PR@tmk-group.com Email: IR@tmk-group.com www.tmk-group.com This information is provided by RNS The company news service from the London Stock Exchange