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Vallourec reports second quarter and first half 2020 results

Boulogne-Billancourt (France), July 29th 2020 – Vallourec, a world leader in premium tubular solutions, today announces its results for the second quarter and first half of 2020. The consolidated financial information was presented by Vallourec’s Management Board to its Supervisory Board on July 28th 2020.

Q2 results: impacted by unprecedented O&G market situation in North America, while Vallourec’s results in other regions show strong resilience
  • Revenue of €843 million, down 22% year-on-year, mainly driven by lower Oil & Gas
  • EBITDA at €43 million, versus €102 million in Q2 2019, the decline being essentially located in North America, while other regions show solid resilience
  • Free cash flow consumption of (€77) million versus €16 million in Q2 2019, including higher restructuring and financial charges
  • Net income of (€493) million includes impairment charges recorded for (€441) million versus (€21) million in Q2 2019, reflecting mainly changes in discount rates, and in the long term market growth assumptions in O&G North America  

Balance sheet, liquidity and refinancing

  • Net debt at €2,326 versus €2,267 million at end of Q1 2020. Liquidity position at €1,543 million, versus €1,779 at the end of Q1 2020
  • The Group announced on February 19, 2020 its intention to launch a capital increase of 800 million euros combined with a new credit line of €800 million.

This operation was adopted by the Shareholders meeting on April 6, 2020. However due to new environment and adverse market conditions linked to Covid crisis, these refinancing operations were not carried out. Vallourec continues discussions, in particular with its reference shareholders and its banks, in order to define a new refinancing plan, taking into account the consequences of the Covid and oil markets crises on its activity and allowing it to deal with its upcoming maturities and rebalance its financial structure

Continued commercial momentum
  • Frame-agreement with Petrobras extended by two years, until mid-2023, reaffirming our historic partnership
  • Large awards in Africa and Middle East for deliveries in 2021

Leading ESG performance
  • Part of CDP Climate “A list” since 2019 (i.e. among the 2% best performing companies worldwide)
  • Carbon emission targets compliance with Paris agreement provisions approved by the Scientific Based Target initiative (SBTi) in June 2020. First O&G company to obtain this recognition

2020 Outlook confirmed
  • Outlook supported by resilience levers despite the sharp drop in North America onshore activity and Industry markets:
    • Brazil: offshore activity to accelerate in H2
    • Sustained activity from our highly profitable iron ore mine
    • EA-MEA: strong deliveries of high alloys tubes
  • Extensive cost cutting actions across the Group
    • Full adaptation of variable costs (including direct labor)
    • Acceleration of the savings in H2, confirming the full year target of €130 million savings announced in Q1 2020, o/w €51 million achieved in H1
  • Free cash flow targeted positive in H2, including a significant release of working capital

Key figures



H1 2020 H1 2019 Change  In € million Q2 2020 Q2 2019 Change
872 1,176 -25.9% Production shipped (k tons) 422 605 -30.2%
1,696 2,109 -19.6% Revenue 843 1,084 -22.2%
111 169 -€58m EBITDA 43 102 -€59m
6.5% 8.0% -1.5p.p. (as a % of revenue) 5.1% 9.4% -4.3p.p.
(514) (18) -€496m Operating income (loss) (485)
Författare VALLOUREC

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