By Dagmarah Mackos
(Reuters) – French steel pipemaker Vallourec on Monday reported a 55% jump in quarterly core profit, boosted by higher volumes, higher prices and strong performance of its tube business.
“Our tube business continues to improve quarter after quarter driven by a favourable environment due to a worldwide focus on energy security,” CEO Philippe Guillemot said in a statement.
Vallourec’s third-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) rose to 198 million euros ($204 million) from 128 million euros a year earlier.
Oil and gas-related revenue in North America more than doubled in the third quarter driven by higher prices and volumes.
Guillemot said Vallourec’s tube business continued to perform well across geographies, but higher energy costs are being felt at its German sites, which it plans to close.
In May, Vallourec said it would close its German manufacturing sites as well as its heat treatment line in Saint-Saulve in France and a site in Scotland, as a part of a restructuring plan.
The group confirmed its full-year core profit (EBITDA) guidance of 650 to 750 million euros and a strong fourth quarter.
It added that production at its Pau Branco iron ore mine in Brazil, where operations have been gradually restarting after heavy rainfall shut it down in January, would be higher than anticipated in the fourth quarter, bringing total volume for the year to 3.8 million tons.
($1 = 0.9728 euros)
(Reporting by Dagmarah Mackos; editing by Kim Coghill and Jason Neely)
