CORINTH PIPEWORKS S.A. consolidated turnover in FY 2008 amounted to 385.1 mil. euro versus 357.5 mil. euro the year before, marking a 7.7% increase. ΕΒΙΤDΑ formed at 31.2 mil. euro versus 57.2 mil. euro in 2007, marking a 45.5% decrease versus the previous year. It is noted that during FY 2008, EBITDA margin stood at 8.1% of the consolidated turnover down from 16.0% in 2007. Earnings before tax marked a 60.5% decrease and amounted to 15.8 mil. euro, versus 40.1 mil. euro the year before, while earnings after tax and minority rights stood at 8.9 mil. euro (0.071 euro per share) versus 34.0 mil. euro (0.274 euro per share), in 2007.
The parent Company results also marked a corresponding course during 2007. More specifically, turnover in FY 2008 amounted to 346 mil. euro versus 340.6 mil. euro in FY 2007. EBITDA amounted to 26.4 mil. euro versus 52.6 mil euro in FY 2007 (or 49.8% decrease) while earnings before tax amounted to 10.5 mil. euro. Net after tax earnings amounted to 5.7 mil. euro (or 0.046 euro per share versus 0.24 euro per share in FY 2007).
Net debt (Debt - Cash) of Corinth Pipeworks was further reduced to 57.2 mil. euro versus 85.7 mil. euro as at 31/12/2007, while Shareholders Equity remained unchanged and amounted to 124.7 mil. euro for the group and 124.5 mil. euro for the company
The decrease of the operating earnings is attributed on the one hand to the Euro appreciation versus the US Dollar during the first half of 2008, reaching 10-year highest levels, in a period when the company was awarded several large projects by US and Middle Eastern clients, and on the other hand to the lower utilization rates of the ERW/HFI plant, during the same period, due to delays of launching several large projects in the Middle East. Moreover, the group's standard policy for fixing raw material prices as well as a substantial part of the freight cost, when undertaking a contact, did not allow to take advantage of the severe correction both in the steel markets, as well as the sea freight market, in the second half of the year. Positive has been the contribution of the Russian joint venture 'ZAO TMK-CPW', where CORINTH PIPEWORKS holds a 49% stake through its Cypriot subsidiary Humbel Ltd. During its first actual year of operations, the joint venture was awarded some significant (for its size) orders and recorded annual net profits of 4.9 mil. Euro.
2008, seems to be the final year of a four-year cycle of favorable conditions in the international markets and especially the energy ones. During the current year, economic environment around the world and in most industries has been deteriorated faster and more intensely, than initially forecasted. However, under the current global recession and the sharp drop of gas and oil prices, we expect a postponement of most projects for 2010 and 2011, when the demand for energy is expected to rebound at before crisis levels. In addition, the increasing protectionism emerges as a new uncertainty factor, being the result of the global financial crisis, and may be further adopted in case that economic environment remains weak beyond the forecasts.
On the other end, several energy groups that have strong cash position and/or enjoy high credit rating (Europe, Middle East, North Africa) consider current conditions (low steel prices and low freight cost, intense competition) to be favorable to continue their investments in gas extraction and transmission infrastructure. Moreover, the repetition once again of the old conflict between Russia and Ukraine, regarding the natural gas transmission to Europe, has intensified the need to diversify both in terms of gas sources as well as transit pipelines.
In such market conditions, CORINTH PIPEWORKS aims at intensifying its efforts of the past few years to continue reducing its operating cost, further penetrating into the European, N. African and Middle East markets, expanding its product range, while maintaining its current financial structure. Besides, its strategic choice to become one of the most innovative and reliable steel pipes producer, allows the company to maintain its presence in various areas of the world and confront the current adverse conditions with the least possible consequences.
The Data and Information of 2008 will be published at the March 27, 2009 edition of newspapers 'KATHIMERINI' and 'NAYTEMPORIKI' and together with the FY 2008 annual Financial Report will be uploaded on the company's website, www.cpw.gr as well as on the ATHEX website www.athex.gr.
Note: More information regarding CORINTH PIPEWORKS SA is available at the company's website www.cpw.gr.