Vallourec Posts $959 Million Net Loss in 2015
YOUNGSTOWN, Ohio – Global pipe and tube manufacturer Vallourec, which operates a large operation here, reported a net loss of $959 million during 2015, the company announced Thursday.
The loss included non-cash impairment charges of $328 million and restricting charges of $112 million, the company reported.
The company, based in Paris, declared a loss of $85 million before interest, taxes, depreciation and amortization.
Pipe and tube companies such as Vallourec have struggled since the price of oil and natural gas started to plummet during the third quarter of 2014. Vallourec supplies pipe for drilling operations in the oil and gas industry.
“In 2015, Vallourec faced an extremely difficult business environment, characterized by major E&P capex cuts by its customers,” Philippe Crouzet, chairman of the management board, said in a statement. “Full year results were severely affected by the sharp drop in high margin oil & gas sales in the EAMEA region and in North America.”
Sales in the United States were “significantly down” last year because of the sharp decline in rig activity as prices continued to drop. In 2015, the rig count in the U.S. plunged 62%, the company noted.
These conditions are expected to persist throughout 2016, Vallourec said.
Vallourec said it cut 3,500 jobs worldwide during 2015 and plans to cut another 2,200 positions by 2017. Revenues were down 37.8% in 2015 versus the previous year, the company reported.
“A few days ago, we announced additional major strategic initiatives which will reshape Vallourec and re-position it on a long term profitable growth path,” said Crouzet. “These measures, most of which will be implemented by 2017, will improve Vallourec’s competitiveness and reinforce its financial strength.”
Pictured: Pipe rolls off the production line at Vallourec’s Youngstown Mill.
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