Home / PRODUCTS & SERVICES / Suppliers You Should Know: Tubacex launches expanded range for oil and gas sector at ADIPEC 2017


Suppliers You Should Know: Tubacex launches expanded range for oil and gas sector at ADIPEC 2017

by Arabian Oil & Gas Staff on Dec 17, 2017


Senior officials of TUBACEX Group (left to right): Manuel Serabia, director; Jess Esmors, CEO; Ajay Sambrani, managing director, Asia Pacific and MENA; and Jibu Peter, director, sales and marketing, MENA.
Senior officials of TUBACEX Group (left to right): Manuel Serabia, director; Jess Esmors, CEO; Ajay Sambrani, managing director, Asia Pacific and MENA; and Jibu Peter, director, sales and marketing, MENA.

TUBACEX is an industrial group founded in 1963, devoted to manufacturing seamless tubes in stainless steel and high-nickel alloys and super alloys, with its head office in Llodio, Alava, Spain. It is a leading multinational group, with industrial facilities in Spain, Austria, US, Italy, India and Thailand, a global distribution network and a worldwide sales presence.

TUBACEX is the largest worldwide producer of seamless tubes in stainless steel and high-nickel alloys, and one of the few companies to have an integrated production – steel manufacturing, hot extrusion and cold-rolling of the tubes.

TUBACEX is listed in the Spanish Stock Market since 1970 and its shares are integrated in the IBEX SMALL CAPS index.

Securing a profit of $1.31mn

The continued reduction in investments throughout the entire value chain of the oil and gas sector is leading to a significant fall in volumes and serious pressure on prices. This situation has led to a dramatic reduction in projects awarded in this sector, which has had an impact on demand over the last few months.

In such a depressed market context, TUBACEX has managed to achieve a positive net profit of $1.31mn between January and September. The company’s good positioning and the increase in its market share in the highest value-added segments is enabling it to withstand the present situation. Thus, in the first nine months of the year, sales increased to $440.1mn, up 1.2% from the same period last year. The EBITDA (earnings before interest, taxes, depreciation and amortization) was $28.74mn, a reduction of 20.5%.

Jesús Esmorís, CEO, TUBACEX, stated: “The gradual increase in our market share in higher value-added products, operational improvements and constant efforts to control costs are our pillars in order to maintain our results and enable us to present positive net profit even in the current market environment.”

The TUBACEX strategy based on a good positioning in high value-added products enables it to have a historic backlog of $831.1mn to be supplied over the next three years. In this regard, it is worth highlighting that the company will receive an advance payment in the coming weeks of $66mn for one of its multi-year, high value-added projects, the production of which will have an important impact on the second half of the year but the invoicing of which will be concentrated over 2018, 2019 and 2020.

Bearing in mind this advance payment, the net financial debt will amount to $266.25 million, with a ratio of 7.8x the EBITDA. This high debt ratio is temporary and has been prompted by the acquisition and integration of two strategic companies in 2015 along with an increase in working capital, which amounts to $275.54mn, meaning an increase of $58.06mn with respect to the year end. This is due to two factors – on the one hand, to the opening of new TUBACEX Service Solutions (TSS) distribution centres; and on the other, to the production of high value-added projects.

TUBACEX expects that the debt ratio will fall corresponding to progress in the execution of the strategic projects order backlog and that it will achieve 3x the objectives over the next year. On the other hand, the company’s cash flow position ensures that it is able to face its debt deadlines for the next 3-4 years, even in the worst scenario.

TUBACEX does not foresee any significant change in the market over the short-term. Esmorís remarked: “The current level of investment in our sector is not sustainable; so, signs of recovery should be seen throughout 2018. Fortunately, until this recovery arrives, our current portfolio of premium products enables us to anticipate a significant improvement in results for the coming quarters.”

Reinforcing leadership in fittings

Within its strategy to become a global supplier of tubular solutions, TUBACEX has reinforced its product portfolio for the oil and gas sector – the complete range of stainless steel seamless pipes with outside diameter from 3mm to 72” – and presented it all under one umbrella at ADIPEC 2017. This represents the largest product portfolio of tubes, pipes, fittings and special connections.

TUBACEX has shown at ADIPEC its reinforcement in fittings and special components extensive production programme with the joint venture signed with the Japanese company Awaji Materia. This strategic acquisition has enabled the company to complete the fittings range offered until now through TTA (Spain) and IBF (Italy) through a Thailand-based manufacturing plant.


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