Interpipe EBITDA grows 20% yoy in 2012, posts net loss

Обзоры по компаниям и отраслям 02.08.2013 Interpipe (INPIP) reported on Aug.1 a 20% yoy increase in 2012 EBITDA to USD 305 mln, while revenue grew 6% yoy to USD 1.77 bln. The company posted a USD 71.7 mln net loss in 2012 vs. net income of USD 41 mln a year ago, citing a PP&E impairment as the main reason. Its EBITDA margin improved to 17% in 2012 from 15% in 2011. Total pipe sales grew 12% yoy to 1.022 mmt in 2012 and sales of wheels – the second-largest and the most profitable segment (24% EBITDA margin) – increased 24% to 211 kt. Net debt to EBITDA improved to 3x from 3.5x in 2011, while its debt/equity ratio eased somewhat from a high 2.3x to 1.9x. Roman Topolyuk: Interpipe’s top line and EBITDA increase was driven by sales growth in pipes and wheels in 2012. The latter was accompanied by the launch of its new EAF steel mill, Dniprostal, last year, which produced 500 kt of steel billets for Interpipe (38% of the mill’s capacity load) replacing its outdated and inefficient open-hearth facility that was decommissioned. The net loss was aggravated by 36% yoy higher financial costs on the top of the impairment Throughout 2013, Dniprostal increased its capacity load to 98% in June from 82% in January. So we estimate that in 1H13, Interpipe might have increased its margins even further yoy. However, the Russian government’s recent decision to remove duty-free quotas for the company’s key market, and Customs Union import duties of 19-39% applied in July, may hurt Interpipe’s sales in 2H13. Another threat to sales is an anti-dumping investigation on seamless pipe imports from Ukraine and eight other countries that was launched by U.S. authorities in July. Shipments to the U.S. market grew to 10% of total sales in 2012 from 9% a year ago.