OREANDA-NEWS. The Chelyabinsk Pipe Plant public company (PAO ChelPipe), a leading Russian producer of pipes and a supplier of integrated solutions for Fuel & Energy companies, announces its consolidated IFRS financial results for the six months ended June 30, 2016.

Financial Results for six months 2016 

(RUB million, unless otherwise stated)

 

 

 

 

 

1H 2016

  

   1H 2015

%

Revenue

 

68,624

 

75,958

-10%

Pipe sales, thousand tons

876

  

1,073

-17%

 

  

 

 

  

Gross profit

21,945

 

21,613

2%

Operating profit

12,809

 

10,769

19%

Profit before tax

7,624

 

5,689

34%

Net profit

5,810

 

4,211

38%

 

  

 

 

  

EBITDA (adjusted*)

16,961

 

14,458

17%

 

  

 

 

 

EBITDA margin

24.7%

 

19.0%

 

Net profit margin

8.5%

 

5.5%

 

 

  

 

 

 

Operating cash flow

7,611

 

10,286

 

 

 

 

 

 

CAPEX

(2,183)

 

(3,348)

 

 

*Adjusted EBITDA (hereinafter EBITDA) is net profit for the reporting period before financial expenses and income, profit tax, amortization of fixed and intangible assets, foreign-exchange gains or losses, profit tax expenses, losses (profit) from disposals of subsidiaries, and negative goodwill.

 Sales:

  • The total pipe sales in 1H 2016 amounted to 876 thousand tons, which is 18% less versus the same period in 2015 (-197 thousand tons). The supplies to the RF market amounted to 811 thousand tons (-17%), exports: 65 thousand tons. ChelPipe Group’s share in total Russian pipe shipments was 17.4%.
  • The Company sold 358 thousand tons of welded pipes, including 330 thousand tons of large-bore (LB) pipes, which is 33% and 35% less respectively versus 1H 2015. The decrease came as a result of changes in shipment schedules on Gazprom projects (the Power of Siberia and North European Gas Pipeline) and Transneft’s reduced consumption of LB pipes for repairs and operational needs of the existing oil pipelines.
  • The sales of seamless pipes went down by 4% versus the same period in 2015 to 518 thousand tons, which conforms to the market trends.
Financial Results:
  • According to 1H 2016 results, the revenue decreased by 10% versus January-June 2015, and was 68,624 mln rubles.
  • The gross profit went up by 2% to 21,945 mln rubles, with EBIDTA growing by 2,503 mln rubles. The EBITDA margin rose by 5.7 percentage points to 24.7% as a result of the improved shipments structure, in particular, increased OCTG share and the Company’s improved performance through cutting down its permanent expenditure.
  • Thus, over January-June 2016 ChelPipe Group generated a profit amounting to 5,810 mln rubles (1H 2015 profit was 4,211 mln rubles) and a positive operating cash flow of 7,611 mln rubles (that of January-June 2015 was 10,286 mln rubles). The net profit margin grew up to 8.5%.
  • In the first half-year 2016, ChelPipe Group reduced its joint debt on loans and borrowings by 6,024 mln rubles to 88,080 mln rubles (as of December 31, 2015, it was 94,104 mln rubles).
  • The Company’s net debt went down to 79,820 mln rubles (as of December 31, 2015, it was 86,069 mln rubles). As of June 30, 2016, the net debt-to-adjusted EBITDA ratio went down to 2,5х versus 2,9х as of December 31, 2015.