Page 70 - UKRRptJul21

Interpipe OCTG pipe sales surged 30% in 5M2.1
Railway product sales volume at Ukraine’s largest pipe and railway wheel producer Interpipepercentagewas 15.0 kt in May, a 13.5% m/m increase, according to the company’s monthly operational report released on June 17. Pipe sales added 9.1% m/m to 48.9 kt, while external billet sales rose 13.8% m/m to 8.0 kt. Total sales volume advanced 10.5% m/m to 71.9 kt. The m/m increase in railway product sales in May was driven by sales of wheels (+16.6% m/m to 11.5 kt) amid a robust demand from Belarus and Kazakhstan and expansion of cooperation with the national railway operator in India, according to the report. The m/m advance in pipe sales in May was led by a surge in line pipes (+18.5% m/m to 29.9 kt), driven by a growth in demand in Europe the US following the easing of quarantine measures Interpipe said. During 5M21, Interpipe’s pipe sales added 6.1% y/y to 198.8 kt, driven by a 29.6% y/y surge for OCTG pipes to 51.9 kt. Line pipe sales inched up 2.1% y/y to 115.2 kt, while sales of mechanical pipes jumped 30.9% y/y to 8.6 kt. However, welded pipe sales dropped 17.3% y/y to 23.1 kt in 5M21, as pipe prices lagged behind the rallying hot-rolled coil prices, the report said. Railway product sales plunged 28.0% y/y to 67.6 kt in 5M21, driven by a 35.5% loss for wheels to 53.3 kt, partially offset by a 37.0% jump for wheelsets to 12.1 kt. Interpipe boosted its external billet sales 74.3% y/y in 5M21 to 26.5 kt. Ukraine's share of Interpipe’s pipe sales in 5M21 dropped to 17%, or 5pp less than in 2020. At the same time, the share of sales in the Americas rose 3pp to 14%, MENA's share added 1pp to 25%, and the share of CIS countries advanced 1pp to 12%. Europe's share in pipe sales was unchanged at 29%. The share of Interpipe’s railway product sales in Ukraine in 5M21 dropped 6pp from 2020 to 8%, while the share of sales to Europe retreated 3pp to 32%. At the same time, the share of sales to CIS countries rose 5pp to 48%, and the share of sales in the Americas added 4pp to 7%. Regarding production volumes, which might be indicative of sales volumes in the coming months, Interpipe’s pipe production added 6.9% m/m to 51.6 kt in May, while railway product output slid 11.4% m/m to 13.0 kt. Steel production lost 3.6% m/m in May to 86.0 kt.
Ukraine’s largest pipe and railway wheel producer Interpipe won a court case against the Antimonopoly Committee of Ukraine (AMCU) regarding tenders for railway wheels, according to a Facebook page of Antitrust League, a communication platform for antitrust experts. AMCU’s October decision to fine Interpipe Ukraine and three other companies about UAH70mn ($2.5mn) and to bar them from participating in public procurements for three years was declared invalid and cancelled. According to the AMCU’s June 1 official freedom of information response to Antitrust League, this decision was made by Kyiv economic court on April 27.
EBITDA at Ukraine’s largest pipe and railway wheel producer Interpipe plunged 53% y/y to $40.4mn in the first quarter of 2021, according to the company’s financial statements published on June 3.
Interpipe’s revenue dropped 20% y/y to $201.0mn in the first quarter of 2021, driven by a 53% plunge in its railway product segment revenue to $59.6mn. Revenue from its pipe segment increased 10% y/y to $123.3mn.
EBITDA (before reallocation from its steel segment) of Interpipe’s railway product segment plunged 84% y/y to $11.5mn in the first
70 UKRAINE Country Report July 2021 www.intellinews.com