Tubos Reunidos returns to profit, sees demand improvement

Spanish seamless tube supplier Tubos Reunidos (TR) saw most of its main indicators grow in the first half of this year compared to January-June 2021, Kallanish notes.

This was mainly due to an improvement in activity as a result of strong demand and the passing on of increased costs to sales prices, together with efficiency measures in its Strategic Plan, the company comments.

“The improvement seen in H1 2022 means that we can look to the rest of the year with moderate optimism,” TR says. “We have a large order book and the market is showing positive signs in terms of demand, but weathering the uncertainty and the challenges that it brings will undoubtedly remain the key focus.”

The preliminary anti-dumping measures announced by the US against a number of countries that are major exporters of OCTG to the upstream sector, such as Mexico, Argentina, Russia and South Korea, have led to price increases and shortages. Concern about potential difficulty procuring OCTG is benefiting TR’s sales, the company observes.

“In this scenario, the Group’s portfolio is mainly based on commodity products, albeit at prices significantly higher than usual due to the current rising costs as well as the upbeat signs from the demand point of view,” TR adds.

The company remains focused on selling OCTG green pipe for the upstream sector and pipe for the midstream and mechanical sectors, which is likely to be extended until the end of the year. It will pivot towards higher value-added and alloyed pipe in 2023, as downstream order intake recovers supported by the resumption of large power generation, as well as refining and petrochemical projects.

The group’s shipments reached 120,663 tonnes in H1, 64% more than in the previous six months. This volume was also 84% higher year-on-year.

TR sales revenue in H1 moved up by 113% versus July-December 2021 to €228.7 million ($233.8m) and by 99% y-o-y, with the North American market representing €104.9m.

The company posted Ebitda of €14.5m in H1, an improvement of €25.4m compared to a negative €10.9m in the same period of 2021.

Todor Kirkov Bulgaria