Interpipe EBITDA jumps 37% in 1H19

EBITDA at Ukraine’s largest pipe and railcar wheel
producer Interpipe (INPIP) jumped 37.4% yoy to USD 125.4 mln in 1H19, according
to a short version (no notes) of the company’s 1H19 financial statements
released on Oct. 16.

Segment-wise, EBITDA of its pipe segment jumped 39.4%
yoy in 1H19 to USD 44.5 mln. Its wheel segment EBITDA skyrocketed 2.9x yoy to
USD 60.2 mln, while its steelmaking segment EBITDA plunged 49.1% to USD 20.0
mln.

In a release that accompanied the statements, the
company said the key drivers of its 1H19 performance were (a) strong demand for
pipes from the oil & gas sector in the U.S. and Ukraine; (b) increasing
demand for railway wheels in the CIS countries; and (c) the decrease in global
steel prices and scrap shortage in Ukraine.

The company’s revenue inched up 2.7% yoy in 1H19 to USD
557.2 mln, while its net loss shrank 37.7% yoy to USD 25.4 mln. Interpipe’s
operating cash flow (before working capital, interest and profit tax) increased
18.5% yoy in 1H19 to USD 137.2 mln, while net cash from operations skyrocketed
4.3x yoy to USD 84.2 mln. The company’s CapEx (cash outflows on purchases of
PP&E and intangible assets) rose 14.2% yoy to USD 24.3 mln.

Interpipe’s cash and cash equivalents jumped 52.8%
during 1H19 to USD 200.0 mln. The company’s working capital increased 33.7%
during 1H19 to USD 230.7 mln, according to Concorde Capital calculations.

Dmytro Khoroshun: The strong
1H19 results were expected from Interpipe because the company disclosed in mid-August in its restructuring documentsthat its 5M19 EBITDA was USD 105.6 mln. Also, one of Interpipe’s assets, NTRP, reported strong 1H19 results(EBITDA of USD 74.7 mln, a 44% yoy increase).