Vallourec digs its losses, plans 1,050 job cuts

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VALLOUREC IS HAVING ITS LOSSES, PLANS 1.050 JOB ABOLISHMENT

PARIS (Reuters) – Vallourec on Wednesday published a net loss of 636 million euros for the first nine months of 2020, marked by a plunge in demand from its oil customers, and announced around 1,050 job cuts in order to strengthen structurally its competitiveness.

The producer of seamless steel tubes said in a press release that it foresees around 350 job cuts in France in production units and support functions, including the closure of its heat treatment facilities in Déville (Seine-Maritime ).

Vallourec is also planning 200 new job cuts in Germany over the 2021-2022 period – also with “intensive” recourse to partial unemployment and the implementation of a reduction in working time – and another 500 this year in support functions in Brazil.

Edouard Guinotte, the chairman of the management board, also declared during a press conference call that he wanted to conclude “as quickly as possible” an agreement to reduce the group’s debt, in any event before February 2021.

After having to give up a plan to increase capital of 800 million euros in the face of the collapse in oil prices due to the health crisis, Vallourec asked its creditors to convert more than half of its debt into capital, which would amount to giving them control of the group.

Vallourec, which has the public bank bpiFrance and the Japanese company Nippon Steel as its main shareholders, posted a debt of 3.5 billion euros at the end of September, of which 1.7 billion would fall due next February.

The group, very exposed to a North American oil and shale gas market in turmoil, has confirmed that it is targeting 130 million euros in gross savings this year, in addition to adjusting its variable costs. a decline in activity, and strict control of its spending, with an investment envelope limited to around 160 million.

It also confirmed its objective of generating positive free cash flow in the second half of the year.

In the third quarter, Vallourec recorded a net loss, group share of 69 million euros (against -60 million a year earlier), gross operating income of 71 million (-15.5%), a figure of business of 716 million (-32.5%) and free cash flow of 35 million (compared to 26 million).

In terms of oil and gas markets, the group underlines in particular that the number of drilling rigs in North America reached its lowest level in mid-August and estimates that prices “should start to recover at the beginning of the year. 2021 “in this region.

(Benjamin Mallet, edited by Marc Angrand)

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