Vallourec Posts $137M Loss for First Quarter
BOULOGNE-BILLANCOURT, France – Vallourec, the parent of Youngstown tube manufacturer Vallourec Star, posted a first-quarter net loss of $137 million, mainly because of low pricing, higher material costs and a weaker customer mix in the European market, the company said Wednesday.
This compares to a net loss of $308.9 million the year-ago quarter.
“Our financial performance improved sequentially and compared to the first quarter of 2016,” said Chairman Philippe Crouzet in a statement. “This is the direct consequence of the rigorous implementation of our transformation plan, of a favorable product mix in Brazil during this quarter, and, to a lesser extent, of the first benefits of the new momentum in the United States.”
Revenues were $851.7 million, up 16.7% compared to the first quarter of 2016, Vallourec reported. The company said that the higher revenues resulted from improved volumes in the United States and Brazil.
Vallourec Star operates a tube mill in Youngstown that supplies oil country tubular goods, or OCTG, pipe to the oil and gas market in North America.
Vallourec attributed the higher revenues in the United States to steadily rising rig counts, which led to more demand for Vallourec Star’s products. On average, the rig count in the United States increased 33% year-over-year and was 26% higher than the last quarter of 2016.
The improvement in the U.S. market enabled Vallourec to announce price increases during the first quarter that should affect business during the second half of this year, the company said.
“With a rebalanced geographical footprint and a reinforced financial structure, Vallourec is well-positioned to capture the opportunities of the global cycle recovery when it fully materializes,” Crouzet said.
Pictured: Vallourec’s Youngstown pipe mill.
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