Vallourec reports slimmer profits in Q1

French steelmaker Vallourec S.A., which has a scrap-fed melt shop and steel tube production facility in Ohio, has reported earnings before interest, taxes, depreciation and amortization (EBITDA) of more than $230 million in this year’s first quarter.

The profit figure is down by about 12 percent from Vallourec’s earnings in the first quarter of last year and represents a 3.3 percent decline compared with the prior quarter.

The company divides its operations into a Tubes business unit, which serves the oil and gas and other industrial sectors, and its Mines & Forest business unit, which controls iron mining and timber resources in Brazil.

The company predicts global markets for its more than 60 percent recycled-content steel tubes—a  figure that rises to 98 percent at its Youngstown, Ohio, electric arc furnace (EAF) melt shop—will remain stable at best in the quarter now underway,

Vallourec forecasts sales volumes in its Tubes business unit will be “flat to slightly down sequentially” in this year’s second quarter and then international shipments are expected to increase in the second half of this year compared with the first half “due to strong bookings over recent quarters.”

“Our key international customers are progressing their long-term plans,” Vallourec CEO Philippe Guillemot says. “As a result, our first quarter bookings continued the strong trend we observed in the fourth quarter, and we see a robust pipeline of opportunities ahead of us.

“Our premium positioning has enabled us to generate solid profitability, not only in our Tubes segment, but also for our mine in Brazil.”

Guillemot also says geopolitical circumstances have the potential to affect Vallourec’s earnings later in the year.

“Financial market sentiment on the oil and gas sector has soured in recent weeks due to dual concerns about rising oil output by OPEC-Plus members and fears of a slowdown in oil demand,” he says. “Meanwhile, United States market prices have shown a continued upward trend, but they do not yet reflect the full impact of recently announced tariffs due to ongoing market uncertainty.

“We are well positioned for any market environment. We [have] strong positions with global national oil companies, international oil companies and resilient independent U.S. producers. We have centralized production in cost-efficient hubs close to our key customers. We can serve all of our onshore U.S. customers’ needs from our integrated operations in the U.S., putting us in an ideal position to navigate today’s trade environment.”