Vallourec projects that activity in the global oil and gas industry will remain muted in 2021 but expects its iron ore mine to provide increased supply this year.
The French steel tube provider noted that North American drilling is anticipated to slowly resume and keep developing at off-shore Brazil sites, though the EU and the Middle East and Africa regions may encounter challenging market conditions until 2022.
The company sees its industry markets gradually recovering in 2021, which should entail positive price trends. Although it has been affected by sharp raw material cost increases in early 2021, the company plans to continue its cost savings programs throughout this year.
The pipe maker’s sales volume dropped by 30.2pc to 1.6mn mt in 2020 compared to 2.29mn mt in 2019. Shipments fell by 21.5pc to 408,000mt in Q4 2020 against 520,000mt in the same quarter in 2019.
Vallourec recorded a 22.3pc decline in consolidated revenue, to €3.24bn ($3.9bn) in 2020 compared to €4.17bn in 2019. Consolidated revenue dropped by 17.3pc to €830mn in Q4 2020 from €1bn in the same quarter a year prior. Revenue was impacted in 2020 by reduced activity due to the COVID-19 pandemic and its effects on global oil demand and E&P activity.
The company’s EBITDA decreased by 25.6pc to €258mn in 2020 versus €347mn in the previous year. EBITDA was down 19pc at €76mn in Q4 2020 from €94mn in Q4 2019. The company cited a near steady margin was recorded for its year-on-year EBITDA which reflected its ability to adapt to the pandemic.
(€1 = $1.20)