Khartsyzsk Pipe doubles monthly production in July

Khartsyzsk Pipe (HRTR UK) produced 44.6 kt of large diameter pipes in July, thus doubling output m/m, Interfax reported on August 8. Production fell 41% yoy to 172 kt in 7M13.

Roman Topolyuk: With a 73% capacity load in July, the company’s operating performance is clearly recovering after almost standstill mode in January-February. While its Russian peers benefited from increased consumption by Russian oil and natural gas companies, Khartsyzsk’s increasing production is being supported by higher orders from Central Asia, as its 2Q13 report indicated (87% of 1Q13 sales and 85% of 2Q13 sales came from Kazakhstan). Despite production steeply increasing, we don’t see so far the enterprise returning to paying out dividends until larger and more sustainable orders appear.