* 2013 sales up 4.7%, EBITDA up 16.8%, beats consensus
* Expects oil and gas sales to continue rising in 2014
* To start cutting investment spending in 2014
* Expects positive cash flow in 2014, ups dividend 17.4%
(Adds details from call)
PARIS, Feb 26 French steel tube maker Vallourec
said it expected sales and core earnings to rise
moderately at best this year, after strong sales to oil and gas
clients outweighed the pain from a higher euro to push up 2013
A bellwether for investment in heavy industry, Vallourec
makes seamless steel tubing for oil and shale gas drilling, the
automotive industry and for use in building components.
Vallourec's sales have been driven in the last few years by
its oil and gas clients as they have made large investments, but
it warned last year that a rise in the euro would hurt results
from the fourth quarter of 2013. It manufactures most of its
products in the euro zone.
"I am pleased with the strong dynamism of our oil & gas
sales, which represented two thirds of our total sales in 2013
and contributed to the increase in our EBITDA (earnings before
interest, tax, depreciation and amortization) margin," Vallourec
Chairman Philippe Crouzet said in a statement.
Asked in a conference call whether the company would be
affected by cuts in capital expenditures announced by major oil
companies such as Total, Crouzet said he expected
investment by independent oil explorers and national oil
companies to offset that decline.
"In a survey we did, we had about 60 percent of oil majors
announcing a stabilisation or a drop in capex ... but experts
tell us national oil companies will continue to increase their
capex," Crouzet said, adding he was seeing that in Africa, the
Middle East and by major Brazilian client Petrobras.
After the market closed on Wednesday, Vallourec posted
higher sales and profit figures than analysts had expected.
For 2014, Vallourec said it expected a rise in oil and gas
investment among clients overall and a rise in oil and gas sales
The group as a whole is targeting a stable to moderate
increase in sales and EBITDA, it added.
After years of investments to build plants in the United
States and Brazil, Vallourec said it would start tapering
capital expenditures and expected positive cash flow generation
in 2014, its first since 2009.
It proposed to pay a dividend of 0.81 euro per share, up
17.4 percent and higher than the 0.79 euro analysts had
Its sales rose 4.7 percent to 5.578 billion euros ($7.6
billion) in 2013, the group said, beating expectations.
EBITDA rose 16.8 percent to 920 million euros, with the
EBITDA margin up 1.7 percentage points to 16.5 percent.
Net income rose 18.6 percent to 262 million euros.
Analysts expected on average net profit of 251 million euros
and EBITDA of 899 million euros on sales of 5.43 billion euros,
giving an operating margin of 16.6 percent, according to a
Thomson Reuters I/B/E/S consensus.
($1 = 0.7317 euros)
(Reporting by Michel Rose; Editing by Lionel Laurent and Jane