Vallourec Posts First Quarter Loss of $326 Million
BOLOUGNE-BILLANCOURT, France – Hit hard by the collapse of the global oil and gas market, pipe and tube manufacturer Vallourec posted a net loss of $326 million during the first quarter of 2016, the company said Tuesday.
Vallourec, which operates Vallourec Star in Youngstown, said its revenues fell 36.2% to $771.9 million, brought on by what the company said were record low volumes.
The company manufactures oil country tubular goods, or OCTG, pipe for mostly the oil and gas industry. Drilling activity and rig counts are substantially down since October 2014, when commodity prices began to tumble.
Oil companies have since cut spending and capital investment on their drilling programs, which has put additional pressure on suppliers such as Vallourec.
“As expected, the first quarter of 2016 was marked by a decrease in volumes,” said Philippe Crouzet, chairman of the management board, in a statement. “This new record low illustrates the extent of the crisis the oil and gas markets are going through.”
The company said that the rest of this year would remain difficult, but revenues are expected to improve during the second quarter because of a backlog of orders. Vallourec reported that personnel levels were down by 500 thus far in 2016 compared to the end of 2015.
In February, Vallourec announced that it would cut 2,200 jobs by 2017.
Pictured: Vallourec Star operations in Youngstown.
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