May 18, 2018 / 9:24 AM / a year ago

UPDATE 1-Russia's TMK Q1 net profit plunges 80 pct as FX gains decline

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MOSCOW, May 18 (Reuters) - TMK, Russia’s largest maker of steel pipes for the oil and gas industry, reported an 80 percent fall in first-quarter net profit on Friday, distorted by a decline in foreign exchange gains compared to a year ago.

TMK’s top line increased on the back of strong demand in the Russian market, the company, which is controlled by Russian businessman Dmitry Pumpyansky, said in a statement.

First-quarter net profit fell to $8 million, but earnings before interest, taxation, depreciation and amortisation (EBITDA) rose to $160 million from $142 million a year ago.

TMK said it still expected its 2018 adjusted EBITDA margin to be broadly flat compared to 2017, while overall adjusted EBITDA would rise, but it did not say by how much.

In February, TMK’s U.S. subsidiary, IPSCO Tubulars, halted an initial public offering of its shares in New York, when a global sell-off in equities gripped global markets.

On Friday, TMK made no mention of whether IPSCO would revive its share sale plan. It said that first quarter EBITDA of its U.S. division totalled $26 million, up from $9 million a year ago but down from $39 million in the last quarter of 2017 due to an increase in raw materials prices and lower sales prices.

It said its European division expects stronger financial results in 2018 due to higher demand and a more favourable product mix, but did not elaborate. (Reporting by Polina Devitt; Editing by Susan Fenton)

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