Interpipe sells 95 kt of wheels in 1H18, invests to expand capacity

Sales of railway products at Ukraine’s largest producer
Interpipe (INPIP) reached 95 kt during 1H18, according to an Interfax-Ukraine
report that cited the company’s press release.

Interpipe plans to invest USD 15 mln in a new railway
wheel production line that will be launched in 2019, according to the company’s
CFO Denys Morozov as cited by Interfax-Ukraine. The line will increase export
sales capacities by 40K of premium wheels per year, Morozov said, adding that
the investment into the line has a payback period of two years.

Dmytro Khoroshun: The
annualized rate of sales for 1H18, 190 kt per year, is up 10% from 172 kt per
year for 2017. This dynamic is a positive surprise considering the hike of the anti-dumping duty by Russia in January 2018.
We estimate that the new line will increase Interpipe’s wheels capacities by
15-20 kt p.a.

We continue to think the time is right for
Interpipe and its creditors to move forward with the debt restructuring the company has recently proposed.