Profits at Vallourec rise as expected due to higher sales prices

French steel tube maker Vallourec announced a 12.3% increase in its core profit for the third quarter on Friday. This was within its own range of guidance, and was aided in part by higher prices as well as a slight rise in volume.

The company's EBITDA (earnings before interest, tax, depreciation, and amortization) increased to 210 millions euros (245 million dollars) during the period July-September, which is right in the middle the range of 195-225 million euros it provided in its second quarter results.

The group stated that the increase was primarily due to higher sales volumes and prices for Tubes and the positive impact of cost-saving initiatives. It also attributed the higher profitability at Mine & Forest to the Phase 1 Mine Extension Project.

Vallourec's EBITDA is expected to be between 799 and 829 millions euros for the full year, while the fourth quarter earnings are expected to fall within the same range of the third quarter. Last year, the company reported an 832 million euro core profit, despite not having provided a full-year forecast. In September, Vallourec entered into a contract to supply Brazil's Petrobras offshore operations until 2029. This could result in revenues up to $1 billion.

Speaking to journalists during an earnings call, CEO Philippe Guillemot stated that the company had won the majority of the tenders and services.

Guillemot said, "We will...significantly increase our market shares, since the previous contracts, which were awarded in 2022 gave us a smaller share of Petrobras volumes."

(source: Reuters)