Russia's TMK sees up to 6 pct rise in 2008 sales

MOSCOW, May 20 (Reuters) - TMK (TRMKq.L: Quote, Profile, Research), Russia's largest producer of steel pipes for the oil and gas sector, expects its sales to rise by 5 to 6 percent this year, the company's deputy general director said on Tuesday.

Vladimir Shmatovich said during a conference call sales would be helped by an increase in production capacity expected in the second half of this year.

"In 2009, we expect (sales) growth of around 15 percent. This is a conservative outlook. This growth will come primarily from seamless pipes," Shmatovich said.

In 2007, sales volumes at TMK (Trubnaya Metallurgicheskaya Kompaniya), rose by 3 percent to 3.088 million tonnes. Sales of seamless pipes rose 5.8 percent to 2.039 million tonnes.

TMK's Financial Director Tigran Petrosyan said TMK planned to raise prices in May by an average 15-18 percent for seamless pipes for the oil and gas sector compared with average first-quarter prices and by 25-30 percent for welded pipes.

"If raw material prices continue to grow in the second quarter we will continue raising prices for pipes," Petrosyan said.

The company expects that input costs will affect its profitability in 2008 as a whole compared with 2007 but hopes to see a year-on-year increase in earnings before interest, taxation, depreciation and amortisation (EBITDA).

In 2007, EBITDA at TMK was $931.5 million, while the EBITDA margin stood at 22 percent. (Reporting by Polina Devitt; Writing by Maria Kiselyova; editing by Elaine Hardcastle)