In its financial results according to international financial reporting standards (IFRS) for the full year of 2016, RussianpipeproducerTMKregistered a net profit of $165.62 million compared to a net loss of $368 million registered in 2015.
In 2016, the company's sales revenues decreased by 19 percent year on year to $3.34 billion, mostly due to a negative currency translation effect, lower large-diameterpipe(LDP) volumes at the Russian division compared to a record high 2015 and weak sales at the American division as a result of falling US drilling activity.
In the given year, the same factors negatively affectedTMK's adjusted EBITDA, which decreased by 18.5 percent compared to the previous year to $530.15 million.
TMKstated that inRussia, in the current year, it believes planned oil production cuts by Russian oil and gas companies will not have a significant impact on OCTG and linepipedemand, and seamless oil and gaspipeconsumption will remain strong. A hike in raw material prices could have a negative impact on the Russian division’s performance in the first quarter of this year; however, this should be offset by a further increase inpipeprices in the second quarter.TMKexpects lower LDP consumption in the current year, due to the completion or rescheduling of a number of major pipeline construction projects. Increased drilling activity in the US is expected to drive an improved performance of the American division in 2017. In Europe in the current year, the company expectspipeprices to recover and product mix to improve, which should positively impact financial results of the European division.