Interpipe reports its main operating results for Y2016

3 February 2017

In Y2016 Interpipe decreased sales of pipes by 10% and increased realization of wheels by 22%. As a result total finished production sales made 572k tons (-5% y-o-y).

Geographical sales distribution looked as follows:

k tons 2012 .. 2015 2016 Change, %
Pipes
Ukraine 211 .. 106 119 12%
CIS 520 .. 152 105 -31%
Other countries 289 .. 248 234 -6%
Wheels
Ukraine 132 .. 16 24 52%
CIS 58 .. 36 55 51%
Other countries 21 .. 41 35 -14%

In Y2016 main factor of sales decline was slump in realization on CIS market, while sales on Ukrainian and European markets increased (by 12% for both markets up to 119k tons and 124k tons correspondingly). On the other side sales on MENA market declined by 19% to 69k tons, because of negative situation in Turkey, Egypt and Iraq markets.

As for wheels, realization on CIS markets became main growth factor, Ukrainian sales increased as well (due to slow recovery of Ukrainian railcars market, mainly related to state orders).

Sales of steel billets in Y2016 made 40k tons.

Crude steel production by Interpipe Steel grew by 16k tons up to 614k tons. The company stated that metal scrap deficit (for Interpipe) in Y2016 made 43k tons, as a result, in H2 the company stopped billets realization to 3rd parties.

We estimate that in Y2016 sales of Interpipe in money terms made approximately USD 600M, EBITDA USD 80-100M.

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