Vallourec warns of lower first-half profit as US prices weigh

May 16, 2024 12:38 PM IST

Vallourec forecast earnings before interest, tax, depreciation and amortisation of less than 470 million euros for the first half of 2024, compared to around 502 million euros it had targeted previously.

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“In the US, a reset in market expectations has caused some further incremental pricing pressure,” Vallourec Chairman and CEO Philippe Guillemot said in a statement.

Shares in Vallourec fell 5.5% in early trading.

Vallourec, which provides tubing for oil and gas, low-carbon energy and industrial markets, posted a 27% year-on-year drop in first-quarter EBITDA to 235 million euros.

Second-quarter earnings were expected to moderately decline compared to the January-March period, it added.

Asked about a precise full-year EBITDA forecast, Guillemot said during a media call this “will depend on market conditions in the United States, which are indeed slow to stabilize, but are expected to stabilize in the second half of the year.”

“I can also confirm that, at these EBITDA levels, we will be in a position to continue with the group’s debt reduction,” said Guillemot, adding that debt reduction is “ahead of schedule”.

Net debt dropped to 485 million from 570 million at the end of 2023 and Guillemot said this reduction made him “even more positive about the timing of the return to investors”.

Vallourec said it expects to start returning capital to shareholders in 2025 at the latest.

“I will remind you that there has been no return to investors in the last ten years,” Guillemot added.

This article was generated from an automated news agency feed without modifications to text.