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MOSCOW, Aug 18 (Reuters) - TMK, Russia’s largest maker of steel pipes for the oil and gas industry, said on Friday its first-half core earnings, or EBITDA, rose 2 percent year on year and would rise further in the second half due to stronger sales in the United States.
TMK, controlled by Russian businessman Dmitry Pumpyansky, said it was still on track for stable margins but stronger financial results in 2017 compared with the previous year.
“Continued improvement in the U.S. oil and gas market has enabled TMK to benefit from stronger demand and pricing,” Chief Executive Alexander Shiryaev said in a statement.
“Drilling activity and E&P (exploration and production) spending in the U.S. continue to grow and, alongside our stable performance in Russia, this will support stronger group EBITDA in the second half,” he added.
Its adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation) totalled $275 million in January-June compared with $269 million a year ago.
TMK’s first-half net profit was down to $23 million from $71 million a year ago, while revenue rose 27 percent to $2.1 billion.
TMK’s U.S. business began contributing positive EBITDA in the first quarter of this year after seven quarters in the red, on the back of strongly recovering U.S. drilling rig activity, Citi said in a preview on TMK’s results.
“The recovery of TMK’s U.S. business remains in our minds the key driver behind the company’s efforts to meaningfully de-lever TMK’s balance sheet, and thus de-risk the stock,” it said.
TMK’s total debt decreased to $3.0 billion as of June 30 from $3.1 billion as of March 31 partially due to rouble depreciation against the dollar. Its net debt was at $2.6 billion. (Reporting by Polina Devitt; Editing by Dmitry Solovyov and Edmund Blair)