Interpipe to report 9M19 results on Dec. 19

Ukraine’s largest
pipe and railway wheel producer Interpipe (INTHOL) plans to report its 9M19
results on Dec. 19.

Dmytro Khoroshun: We expect Interpipe’s 3Q19 revenue
to amount to about USD 256 mln, an 8% drop from the average value for the first
two quarters.

In particular,
revenue from seamless pipe sales should have plunged to about USD 111 mln in
3Q19, down 29% as compared to the average 1Q19 and 2Q19 value, driven by a 23%
decrease in sales volumes to 100 kt and a 7% drop in average sales price to USD
1,109/t.

We estimate revenue
from welded pipe sales will slide 4% in 3Q19 to USD 24 mln, as a 23% loss in
price to USD 700/t will be partially compensated by a 25% increase in sales
volumes to 35 kt.

We calculate
Interpipe’s wheel segment revenue will jump 26% from the average 1Q19 and 2Q19
value to USD 111 mln in 3Q19, helped by both a 13% increase in sales volume to
54 kt and a 12% gain in price to USD 2,043/t.

Interpipe’s total
EBITDA will amount to USD 51 mln in 3Q19, down 18% from the average for the
first two quarters, according to our calculations. We expect pipe segment
EBITDA to plunge to around zero in 3Q19 (from USD 43 mln in 1H19).

Wheel segment EBITDA
will rise 27% from the average for the first two quarters to USD 38 mln, while
steel segment EBITDA will amount to USD 13 mln, a 26% increase from the 1Q19
and 2Q19 average.

However, our model
for Interpipe, in particular how the company allocates its fixed and billet
costs between the segments, is still in development and will be updated using
the actual 9M19 results.