Tubos Reunidos first-half profit grows, outlook negative

Spanish seamless tube supplier Tubos Reunidos (TR) saw most of its main indicators grow in the first half of 2023 compared to the previous year and H2 of 2022, Kallanish notes.

This was mainly due to an improvement in activity and strong demand in the North American market, TR president Francisco Irazusta comments. “The upstream (OCTG) and midstream sectors showed very solid performance since the second half of 2022, as well as the demand coming from the mechanical sector in Europe,” he says.

However, order intake has dropped significantly in recent months due to downward adjustments in both apparent demand and prices. These factors will have a significant impact on second-half results, but the expectations remain in line with the TR strategic plan, the executive explains.

“Some projects stopped due to the uncertain environment and the constant increase in interest rates, which is undoubtedly impacting demand. In this sense, Tubos Reunidos currently has a portfolio of orders worth €141.7 million and forecasts a second half of the year with a significant decrease in sales and Ebitda compared to H1,” Irazusta adds.

The group’s revenue in January-May moved up by 35% versus the same period in 2022 to €300 million. The North American market represented 53% of total sales, almost equal year-on-year.

TR says its investments will total almost €25 m in 2023. Because the US is the most relevant market for its business, the company will devote almost €7m to the upgrade of its Houston plant to double the capacity of its US facilities up to 75,000 tonnes.

The company posted an Ebitda of €70m in the January-May period, an improvement of €20m compared to H2 2022. TR performance is pending auditing, the seamless tube supplier adds.

Todor Kirkov Bulgaria