Vallourec Sees Stable 2008 Sales, Plans Cost Cuts

PARIS (Reuters) - Vallourec (VLLP.PA: Quote, Profile, Research), the world's largest producer of seamless steel tubes, said on Tuesday its 2007 net profit rose 7.5 percent, and forecast stable sales this year, despite a weaker dollar and surging raw material costs.

The company also unveiled a plan to achieve annual cost savings of more than 200 million euros ($304.3 million) by 2010, and said it would propose a 16.7 percent increase in its dividend to 7 euros euros per share for the 2007 financial year.

Vallourec earned a full-year net profit of 986.2 million euros -- slightly below a Reuters Estimates average forecast of 1 billion euros -- against 917 million euros in 2006.

Operating income was 1.623 billion euros, up 5 percent year on year, as strong demand for tubes to build power plants helped lift sales 10.8 percent to 6.14 billion euros.

"The group estimates sales in 2008 will be at least equal to 2007, on a comparable basis," Vallourec said in a statement.

"In the light of the recent surge in iron ore prices, the group confirms its intention to pass on the impact of changes in the euro-dollar exchange rate and higher raw material costs by increasing its selling prices," it added.

The company, which has been the target of takeover speculation in recent months, also said it would continue to pursue new opportunities for external growth.

(Reporting by Marie Maitre, editing by Will Waterman)