Vallourec Posts Loss of $231 Million During 2016
BOULOGNE-BILLANCOURT, France – The parent of Vallourec Star in Youngstown reported a net loss of $231 million on $3.1 billion in revenues during 2016, but its chairman says its U.S. market is stabilizing.
“Entering 2017, the positive dynamics of the U.S. OCTG [oil country tubular goods] market are confirmed,” Philippe Crouzet, chairman of Vallourec SA, said in a statement Wednesday.
Vallourec is a global manufacturer of pipe and tube used mainly in oil and gas exploration. The company owns and operates Vallourec Star, which has two tube production plants in Youngstown along Martin Luther king Jr. Boulevard. A sister company, VAM USA, operates a threading mill at the Ohio Works Business Park.
Vallourec in 2015 posted a loss of $81.2 million on revenue of $4 billion.
Crouzet said that 2016’s financial results were “fully in line with targets, in a very challenging environment for Vallourec.”
While the U.S. market has improved, the company’s mid-term outlook depends on how fast the global oil and gas market recovers, Crouzet said. Oil companies have yet to sanction new offshore oil projects, which has delayed the recovery of the international OCTG market, he said.
“The year nonetheless ended on a more positive trend thanks to the recovery of the U.S. market,” he said.
Vallourec said it posted a $66.5 million net loss during the fourth quarter 2016 on revenues of $884.4 million versus a loss of $66.4 million during the fourth quarter of 2015 on revenue of $908.7 million.
The company said revenues in the United States were down significantly compared to 2015 because of lower oil and gas prices. However, the rig count gradually increased during the second half of the year.
Vallourec added that while demand is strong for OCTG pipe early in 2017, driven by higher final consumption and restocking at distributors, prices remain low.
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