SMM News: the results released by TUBACEX, a Spanish multinational manufacturer of stainless steel, high alloy seamless tubes and fittings, show that it has benefited from the gradual improvement of the market and the increase in the proportion of sales of high-tech value products. Its sales rose about 38.1 per cent to 677.3 million euros in 2018 from a year earlier, the highest in recent years (as well as quarterly), with a year-on-year increase of about 31.4 per cent to 157.4 million euros in the fourth quarter. Gross operating profit (EBITDA) reached its highest level since 2008, reaching 69.6 million euros, an increase of about 168.2% over the same period last year, with the fourth quarter rising to 14.3 million euros from 1.7 million euros a year earlier. Gross operating margin rose to 10.3% from 5.3% the previous year, including 9.1% in the fourth quarter, up from 1.5% in the same period a year earlier. Operating profit (EBIT) changed to 34.5 million euros from-28.3 million euros last year, including 6.1 million euros in the fourth quarter from-28.5 million euros a year earlier. Net profit attributable to the Group changed from-19.7 million euros to 17.4 million euros in the previous year, with a profit of 5 million euros in the fourth quarter from-19.1 million euros in the same period a year earlier.
The high proportion in the field of oil and gas exploitation and production also reflects the high production of special pipe (OCTG) and umbilical cord pipe for oil and gas production. Thanks to the Iran project, TUBACEX's OCTG sales grew significantly in 2018. Although US sanctions have led to the shelving of Iranian projects, demand for OCTG in the Middle East is expected to grow. Sales of umbilical cord tubes recorded in 2018. In addition to supplying a large number of umbilical cord tubes to BP (BP) 's project in Shahdniz, Azerbaijan, orders from Barracuda or Manuel in the Gulf of Mexico continued to increase orders for umbilical cord tubes in the first few months of 2019. The transformation of energy conservation and emission reduction in the fossil energy power generation industry, led by China, continues, and TUBACEX has participated in several fossil energy power generation projects in China. In addition to the improvement in the Chinese market, the Indian and Korean markets are also expected to grow significantly in the next few years. TUBACEX has developed new advanced steel, together with shot peening hardening technology, to provide solutions for the industry.
On the nuclear side, TUBACEX is supplying pipes for Areva's Hinkley Point project in the UK. A letter of intent was signed at the end of 2018 to provide products and services for the El Dabaa nuclear power project in Egypt.
There has been a partial recovery in new projects in the middle and lower reaches, such as oil refining. Specifically, the refining furnace tube increased in 2018. Geographically, the Group has grown significantly in the Chinese market, such as participating in the Yantai Wanhua Ethylene Project and the Dongying Hydrocracking Project.
Looking ahead, TUBACEX said there is no doubt that we are coming out of the longest crisis in the oil sector. 2019 is expected to be a year of change, with a large number of investment projects approved for construction, and although it will take time to translate into demand for the company's products, it is expected to expand strongly in 2020 and 2021. At the same time, several unique multi-year high value-added projects are in the final stages of negotiations, good positioning and strategic alliance make the company optimistic about the acquisition of orders in 2019, hoping to break the record. The 2019 results are expected to be very similar to 2018 and are likely to end 2019 with the largest undelivered orders and highest visibility in the company's history.