Vallourec says lower demand in Brazil to hurt revenue growth
Sept 26 (Reuters) - French steel-tube maker Vallourec SA said a weak Brazilian real and reduction in demand for new oil and gas wells in Brazil could dent growth in revenue and EBITDA margin this year.
Vallourec had attributed its higher profits in the last two quarters to higher sales in the oil and gas sector in Brazil and the Middle East, which offset low gas drilling activity in the United States.
The company said in a statement that it saw no signs of recovery in shale gas drilling in the United States, but was positive it could take advantage of shale oil drilling. ()
North American energy companies have been focusing on drilling for oil as gas prices remain depressed.
"... The product mix driven by shale oil drilling is evolving towards lower-margin semi-premium connections," Vallourec said in a statement after an investor conference in Pittsburgh.
Vallourec makes seamless steel tubing used in oil and shale gas drilling, the automotive industry as well as building components.