North America continues to stand out as the main market for Tubos Reunidos

Results for the first half of 2023

The second most important market has been the European Union, with 23% of the total and a growth of 13% compared to the first half of 2022.

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El Reunidos Tubes Group has published the results for the first half of fiscal year 2023 where it continues with the trend of the last months of the previous fiscal year. lThe turnover for the semester has reached 333 million euros, a 36% increase compared to the 244 million in the first half of 2022 which, in turn, already represented an improvement compared to previous years. This increase has been based, fundamentally, on the high prices that the market reached in the last months of 2022, which have translated into billing and orders throughout the semester.

 

The good evolution of sales has been accompanied by cost containment which, together with the efficiency actions contemplated in the Strategic plan, has allowed us to achieve exceptional margins of 26%, which are historic for the company. EBITDA stands at 87 million euros, exceeding by 72 million euros what was obtained in the same period of the previous year, and generating 22 million euros more in just six months compared to the figure for the entire previous year. For its part, the net profit achieved was 54,5 million euros compared to 1,9 in the same period of 2022.

Strategic plan:

Likewise, it is worth highlighting the effort made in the execution of the investments contemplated in the Strategic Plan, with a volume executed of 16 million euros in the period. Among the actions in progress, the work to concentrate the foundry processes of the steel mills of Trápaga and Amurrio in the latter, which will allow the production of both billet and ingots in the same facility, raw material for the manufacture of tubes of different diameters and compositions. In these six months there has been considerable progress in the works of the new steelworks, with the completion of the structure of the warehouse, the completion of the assemblies, the construction of the

casting and carrying out the first cold tests. Throughout the second half of the year, it is expected to carry out the first casting of ingots and to progressively undertake the transfer of all ingot production from the Sestao factory.

 

It is also worth highlighting the strong growth shown by the countries of the Middle East and Africa, which, although they only represent 3% of the turnover, have grown by 174%, reinforcing the geographical and product diversification strategy.

 

Likewise, other investment actions have been initiated aimed at improving the efficiency of the plants or expanding production capacity. We are expanding the heat treatment capacity and threading capacity of the plant. U.S. to be able to meet the demand for treated pipe in that country.

 

Finally, we are undertaking investments related to energy efficiency, mobility and reducing the carbon footprint, in line with the Group's commitments to sustainability.

 

Sales by geographic areas and sector:

 

By geographical area, North America continues to stand out as the Group's main market, representing 52% of the total, although it has shown a decreasing trend throughout the semester. The second most important market has been European Union, with 23% of the total and a growth of 13% compared to the first half of 2022.

 

It is also worth highlighting the strong growth shown by the countries of Middle East and Africa which, although they only represent 3% of the turnover, have grown by 174%, reinforcing the geographical and product diversification strategy.

 

By sectors, sales growth has been focused on upstream (OCTG), which represents 38% of the total billing volume, with a 104% increase over the first half of 2022, and in midstream, with a 51% increase. . On the contrary, a certain weakening of pipelines for mechanical-industrial applications and maintenance of downstream sales is perceived despite the fact that many projects are pending reactivation in the environment of high interest rates.

 

The order book stood at 151 million euros at the end of the first half of the year. There is a paralysis of the market, especially in United States and Europe, as a consequence of the excess supply after the high price levels reached in recent months, although we consider that this fact is temporary and that in the coming months the balance between supply and demand will be readjusted.

 

As of June 30, we have a more balanced portfolio by sector, but with prospects for insufficient order intake in the coming months, which makes it unfeasible in the short term to fill the productive capacity of the small tube plant in Amurrio. For this reason, the Group has requested an ERTE for productive reasons in

this plant.