Vallourec Posts 3Q Loss, Expects Flat Market
PARIS – French pipe and tube manufacturer Vallourec posted a 164 million euros — or a $152 million — loss during the quarter ended Sept. 30 because of a continuing slump in the energy market, and the company says it isn’t likely the business will improve in the near-term.
“The adverse market environment we have been facing since the beginning of the year has continued to deteriorate,” said Vallourec Chairman Philippe Crouzet in a statement. “While the decline in production from mature oil fields and U.S. shale plays will trigger a recovery of E&P investments in the medium term, we do not expect market conditions to improve in the short term.”
Vallourec Star, a Vallourec subsidiary, operates two large pipe and tube manufacturing plants at its complex just off Martin Luther King Jr. Boulevard in Youngstown. Last month, Vallourec Star announced it would place an undetermined number of employees on layoff at that location starting the week of Oct. 20.
In July, Vallourec Star announced it would place on layoff between 60 and 80 jobs in Youngstown because of the weak oil and gas market, and instated a three-week shutdown of the plant last spring.
On Monday, the parent company reported a group net loss of 164 million euros, or $176 million, during the third quarter of 2015, versus a net profit of 25 million euros, or $26.9 million for the same period in 2014. For the first nine months of the year, the company reported a net loss of 439 million euros, or $472 million, compared to a profit of 169 million euros, or $181.8 million during the same period last year.
Revenues for the third quarter stood at 872 million euros, or $938 million, a 35% drop compared to the third quarter of 2014, which realized 1.34 billion euros, or $1.44 billion.
For the first nine months of 2015, the pipe and tube giant posted revenues of 2.9 billion euros, or $3.1 billion, compared to 4 billion euros, or $4.3 billion, a year earlier, a 27% drop.
Revenues in North America were down 29.9% for the first nine months of 2015, the company reported. North American operations reported revenues of 881 million euros, or $947 million, during the period compared to 1.25 billion euros, or $1.34 billion, during the same period last year.
Vallourec manufacturers oil country tubular goods, or OCTG, pipe mainly used in the oil and gas industry. Since the start of the year, oil and gas prices have plummeted, causing drillers to pull back.
Pictured: Vallourec’s Youngstown pipe mill.
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