By Mathias de Rozario and Noemie Naudin
(Reuters) – France’s Vallourec reported a 3% drop in its first quarter core profit on Thursday, as lower steel tube prices in North America weighed on its business despite continuing to improve from the prior quarter.
The steel tube maker’s operating earnings before interest, taxes, depreciation and amortization (EBITDA) fell to 207 million euros ($231.63 million), in line with its quarterly guidance.
Vallourec, which provides tubing for oil and gas, low-carbon energy and industrial markets, expects the EBITDA decline to continue in the second quarter, projecting it between 170 million and 200 million euros.
It, however, reiterated that it expects a rebound in the second half of 2025, driven by higher international tubes deliveries as a result of strong order intake in recent quarters.
“Market prices for OCTG (Oil Country Tubular Goods) tubes in the United States continue to rise, although they do not yet fully reflect the impact of the recently announced tariffs, due to the current uncertainty in the market,” CEO Philippe Guillemot said in a statement.
He added that Vallourec was well positioned in the U.S., with few direct impacts expected from President Donald Trump’s tariffs, as its production was highly localised.
The metallurgical group has benefited from cost saving efforts and reached its zero net debt objective in January, a year earlier than planned. The debt had peaked at 1.49 billion euros in mid-2022.
“For the 10th consecutive quarter, Vallourec posted positive overall cash flow generation,” Guillemot said in a call with journalists, adding this brought its net cash position to 112 million euros at the end of the quarter.
Vallourec, which is set to propose its first dividend in 10 years at its annual shareholders’ meeting next week, is now refocusing its efforts on core operations and developing them towards solutions for energy transition.
It said in April it was in exclusive negotiations with Aldebaran to sell Serimax, its subsidiary specializing in welding solutions, for 79 million euros.
($1 = 0.8937 euros)
(Reporting by Mathias de Rozario and Noémie Naudin in Gdansk, editing by Milla Nissi-Prussak)
