* Reports lower Q3 sales, profit vs Q2
* U.S., Europe continue to be challenging
* Russian demand supported by oil firms’ drilling projects
MOSCOW, Nov 27 (Reuters) - Russia’s largest maker of steel pipes for the oil and gas industry TMK expects results to improve in the fourth quarter, with strong domestic demand offsetting weak overseas markets.
The company said on Tuesday that third-quarter net profit fell to $69 million from $76 million in the previous three months, broadly in line with forecasts.
“Despite certain challenges on the U.S. and European markets, strength in Russian demand for oil and gas pipe should allow the company to demonstrate stronger results in the fourth quarter compared to the third quarter of 2012,” TMK said
The third-quarter profit decline reflected lower sales volumes of seamless pipes caused by major repairs at several Russian plants, a reduction in U.S. welded pipe sales, lower prices and the impact of currency translation.
Group revenue fell 9 percent from the previous quarter to $1.62 billion.
For the Russian division, revenue fell by 9 percent from the previous quarter to $1.13 billion, while American division revenue declined by 8 percent to $410 million.
“The U.S. market environment in the fourth quarter of 2012 is expected to remain challenging due to a lower rig count, a high level of imports and customers’ focus on inventory management,” the company said.
In crisis-hit Europe, where TMK’s quarterly sales fell 22 percent to $75 million, customers continued to keep inventories at a minimum level and are seeking lower prices.
TMK said it still expects full-year 2012 earnings before interest, taxation, depreciation and amortisation (EBITDA) to be slightly higher than last year.
Its third-quarter EBITDA fell 16 percent quarter on quarter to $243 million, in line with expectations.