Interpipe, the international vertically integrated pipe and wheel company, for 9 months of 2019 increased capital investment by 8% up to $ 42 mln. Investments in strategic projects increased by 19% up to $ 19 mln. Investments in fixed assets support projects remained at last year’s level and amounted to $ 22 mln. The company priority was to expand the capacities for finishing, cutting and heat treatment of pipes at Interpipe-NTRP and Interpipe Niko Tube, as well as investments in lines for the production of wheels and axles new types.
In January-September 2019, the company received $ 200 mln in EBITDA, which is 45% higher than in the same period of 2018, due to the high demand for railway products in the CIS and European markets.
Revenues for the reporting period increased by 5% up to $ 863 mln despite the recession in the global pipe market. It increased due to growth in sales of railway products by 36% up to $ 297 mln, which is associated with high demand in the CIS market. At the same time, revenue from pipe sales decreased by 7% up to $ 535 mln, due to a 27% drop in sales of oil and gas assortment (OCTG) pipes.
EBITDA increased mainly due to the positive results of the railway division, whose share in the total EBITDA for 9 months of 2019 reached 61%. EBITDA of the railway segment reached $ 123 mln (4.5 times growth). Such results became possible due to the high demand for railway products in the CIS market. And also due to the termination in August of 34.22% of anti-dumping duty on railway wheels in the Customs Union.
Pipe division’s EBITDA increased to 2% up to $ 48 mln. The results of the division were negatively affected by the drilling decline in Ukraine and low demand in other regions, for example, in the USA market. An additional negative factor was the expiration of the Suspension Agreement on the non-use of 7.5% of the USA anti-dumping duty on OCTG pipes in July 2019. These factors affected both sales and margins.
Interpipe is one of the ten largest manufacturers of seamless pipes in the world, is the third largest producer of seamless-rolled railway wheels in the world.
The company’s structure includes five industrial assets: Interpipe Nyzhnodniprovsk Tube Rolling Plant (NTRP), Interpipe Novomoskovsk Pipe Plant (NMPP), Interpipe Niko-Tube, Dnipropetrovsk Vtormet and the Dniprostal steelmaking complex under the Interpipe Steel brand.