Pumpyansky is knowledgeable regarding TMK
Will US penalties affect PAO TMK's operations, and how rapidly will the enterprise increase earnings after its combination with ChelPipe?
According to a DOFA reporter, TMK has unveiled its initial financial statement since the ChelPipe agreement. The acquisition of the holding firm finalized in March for 84.2 billion rubles, bolstering TMK's standing in the extensive-diameter pipe sector.
As outlined in the current statement, the company's income and EBITDA grew, but its profitability lessened. The firm indicates a 56% yearly rise in income to 174.3 billion rubles, and an 11% rise in adjusted EBITDA to 22.7 billion rubles. Nevertheless, TMK's profitability declined by five percentage points to 13% (based on EBITDA). Meanwhile, ChelPipe's proportion of TMK's income totaled 25%, Kommersant indicates.
This is credited to the elevated base effect of the initial portion of 2020 and escalating metal costs. TMK could still enhance its profitability by decreasing metal costs, which already lessened in August.
In March, Evraz and TMK revealed a contract for 160,000 tons of blanks for delivery in 2021–2022 utilizing formula pricing.
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The company's net debt increased in absolute figures by 2.5 times compared to the year's start, reaching 251.8 billion rubles. Subsequent to the ChelPipe agreement, TMK anticipated its net debt to adjusted EBITDA ratio to surpass 3 by the year's conclusion.
TMK workforce
Thus far, the Russian pipe market has grown by 1% compared to the initial portion of 2020, propelled by escalating demand in the industrial pipe division and heightened shipment quantities of extensive-diameter pipes.
These occurrences are unfolding against the backdrop of limitations on oil manufacturing as part of the OPEC+ accord.
Dmitry Puchkarev, an expert at BCS “World of Investments,” opines that TMK's second-quarter results can be viewed as favorable. He believes the company's primary financial metrics notably improved due to the group's incorporation with ChelPipe.
“Net debt, according to our calculations, amounted to RUB 293.4 billion, down 3.6% quarter-on-quarter due to positive free cash flow. The net debt/EBITDA ratio remains quite high at 6.1x, but the situation has improved, as expected, compared to 7.2x in the previous quarter. Free cash flow amounted to RUB 14.3 billion, compared to a RUB 14 billion outflow in Q1. A decrease in working capital had a significant impact on this figure,” BCS Express quotes the expert as saying.
The release of PAO TMK's report coincided with discouraging news for the enterprise from foreign countries.
On the eve, the United States levied anti-dumping duties on seamless pipes from PAO TMK in the sum of 210%.
The US Department of Commerce's tariffs apply to the import of particular pipes from Russia, Ukraine, and the Republic of Korea. Washington asserts that the import of pipes from these countries has purportedly caused “substantial damage to American industry.”
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According to TASS, the anti-dumping duties on imported goods from Russian PAO TMK and JSC Volzhsky Pipe Plant will total 209.72%, those from the Ukrainian industrial enterprise Interpipe will total 23.75%, and those from the South Korean steel corporation ILJIN will total approximately 4.5%.
Furthermore, the document indicates that countervailing duties of 48.38% and 1.78%, respectively, were levied on Russian and Korean companies due to potential receipt of subsidies. These duties can only be rescinded following reviews, which the US will conduct every few years.
Meanwhile, TMK has the capability to enhance manufacturing quantities. According to analysts, the price of seamless oversized tubular goods (OCTG) commenced to rise in June, following steel prices. This trend is propelled by escalating oil prices, and construction activity in the domestic market could furnish additional backing to pipe producers in the second portion of the year.
dofa.news
