Vallourec reports second quarter, first half 2016 results

Staff report

YOUNGSTOWN

Today, the France-based parent company of Youngstown’s Vallourec Star plant reported a year-over-year 25 percent decline in second-quarter revenue.

In the second quarter, Vallourec reported converted euro-to-dollar revenue of $846.2 million compared with revenue of $1.29 billion reported in the second quarter of 2015.

“Poor market conditions have continued to weigh on our first-half 2016 revenues and results, despite a second quarter which benefited from a better mix compared with the first quarter,” Philippe Crouzet, chairman of the management board, said in a statement. “The second half of 2016 will continue to be significantly impacted by low demand and intense pricing pressure.”

A statement Thursday from a Vallourec spokeswoman said, “Vallourec Star’s operations remain stable. We are seeing an improvement in market conditions and are optimistic the trend continues.”

For the first half of the year, Vallourec’s revenue of $1.5 billion was down by 30.7 percent from the first half of 2015.

Vallourec serves the oil and gas industry more than other energy industries. Falling energy prices have continually impacted the company’s revenue and led to layoffs, including those at the Vallourec Star plant here where small-diameter pipe for hydraulic fracturing is produced.

In the oil and gas market, Vallourec’s revenue for the second quarter was down by 35 percent; revenue in power generation increased by 29.1 percent; and industry and other market revenue declined by 16 percent.

Adjusted earnings in the second quarter were reported at a loss of $35.4 million. That’s compared with income of $14.4 million reported in the second quarter of 2015.

The company says its transformation plan is moving forward with ongoing restructuring and divestments in Europe.

Vallourec recorded $110.7 million in cost reductions in 2015 and reports $66.4 million has been saved in the first half of 2016.

At the end of June, the number of employees at Vallourec was down 21 percent from the end of 2014.