May 08, 2020 1410

PJSC «ChelPipe» is announcing operating results for the 1st quarter of 2020

PJSC «ChelPipe» is announcing operating results for the 1st quarter of 2020 PJSC «ChelPipe» is announcing operating results for the 1st quarter of 2020
Public Joint Stock Company "Chelyabinsk Pipe Plant" (PJSC "ChelPipe"), a leading manufacturer of tubular goods and provider of integrated solutions for the fuel and energy industry companies, is announcing operating results for the 1st Quarter of 2020.

Pipe Division

Shipment by product types:
unless otherwise stated
Q 1 2020 Q 1 2019 Chg., %
Seamless industrial pipes 118 124 (5)%
OCTG 109 130 (16)%
Line pipes (O&G) 39 38 3%
LDP (large diameter pipes) 106 152 (30)%
Other welded pipes 10 5 100%
TOTAL 382 449 (15)%
Total volume of shipments decreased by 15% compared to the 1st quarter of 2019 and amounted to 382 kt. The key factor that contributed to decrease in total volume of shipments was the reduction in LDP supply - both to the domestic market due to completion of large gas pipeline construction projects of PJSC Gazprom (Sakhalin - Khabarovsk - Vladivostok, North European Gas Pipeline) and foreign countries due to completion of European Union gas transportation infrastructure projects.

ChelPipe Group has decreased OCTG shipment for 16% - to 109 kt because some orders were postponed to late 2020. ChelPipe Group OCTG market share in Russia is 16% - the Group has maintained its status as one of the leaders in this segment.

Total seamless industrial pipes shipment for Q1 2020 decreased insignificantly and accounts for 118 kt. This reduction was also caused by some postponed tenders and orders. Despite this the ChelPipe Group remains the Russian market leader in the seamless industrial pipe segment.

Total volume of shipments of large diameter pipes (LDP) produced by the ChelPipe Group decreased by 30% compared to the same period last year and amounted to 106 kt. Also, shipments to the domestic market decreased by 17% or 16 kt. Volume of shipments to the market of the CIS countries increased by almost 2.5 times - by 11 kt due to deliveries to Uzbekistan. Deliveries to non-CIS countries decreased by 84% or 41 kt. As a result of 1st quarter of 2020, ChelPipe Group has become the largest supplier of large diameter pipes among Russian manufacturers with a market share of 22%.

ChelPipe Group shipments of line pipes in the 1st quarter of 2020 amounted to 39 kt, which is almost the same level as in the same period in 2019.

Trunk Pipeline Equipment Division

During the 1st quarter of 2020, total volume of shipments of Trunk Pipeline Equipment Subdivision of the ChelPipe Group increased by 20% compared to the 1st quarter of 2019 and amounted to 3.9 kt. Pipeline fittings (hot and cold bends, short-radius bends, pipe spools and stamp-welded parts) manufactured by JSC "Pipeline Bends" and ETERNO, LLC (companies of the ChelPipe Group) were delivered to customers as part of repair and maintenance programs and for field infrastructure development, including to the non-CIS countries. In addition, ChelPipe Group sold high-tech products of the ETERNO INGENIUM line for the Akkuyu nuclear power plant under construction in Turkey.

In the new economic environment, in order to maintain stability, ChelPipe Group will focus on the development of export sales, the need for which will increase in the context of devaluation of the ruble, and will also focus on developing its customer service package in high value-added segments.

Despite the slowdown in business activities at the end of the 1st quarter of 2020, ChelPipe Group continued to adhere to strategic development priorities and completely fulfill its obligations to customers, creditors, shareholders, investors and the public; in particular, it maintained sustainable development projects. We continue to closely monitor development of the situation and take large-scale measures to prevent the spread of coronavirus, which allows the company to minimize possible socio-economic risks. One of the main priorities of ChelPipe Group today is tight cost control and implementation of a program to increase operational efficiency, which, given the increased volatility of world markets, will allow the company to ensure financial and economic stability and maintain workforce capacity.
Boris Kovalenkov
General Director of PJSC "ChelPipe"
For more information, please contact:

Head of the Department of Corporate
Finances and Investor Relations
Dmitriy Muz
+7 (495) 775 35 55 # 44-85

Head of Press Service
Tatyana Cherepanova
+7 (495) 775 35 55 # 44-89

For reference:
ChelPipe Group is one of the leading industrial groups in the Russian metallurgical complex with a highly diversified client portfolio. At the end of 2019, the Company's share in total shipments made by Russian pipe manufacturers amounted to 18%. The share in high-margin segments of the market (large-diameter pipes and threaded OCTG) amounted to 31% and 19%, respectively..

The following ferrous metallurgy enterprises and companies are a part of the ChelPipe Group: Chelyabinsk Pipe Plant, Pervouralsk Pipe Plant, the warehouse complex, which sells the group's tubular goods in the regions; META, a scrap-metal collecting and recycling company; enterprises producing trunk pipeline equipment: JSC "Pipeline Bends", ETERNO, LLC, MSA (Czech Republic); and Rimera Group of Companies, which provides oilfield services.

Thanks to the use of safe technologies and materials, modernized enterprises of the ChelPipe Group have minimal environmental impact and manufacture environmentally friendly products. Company supports the social sphere and creates conditions for employees to have a healthy lifestyle. In 2020, the ChelPipe Group is celebrating its 10 th anniversary of the corporate METAllurgy philosophy.
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