Tubos Reunidos S A : continues recovery and fulfilment of Strategic Plan

• At today's Ordinary General Meeting in Bilbao, the 2022 accounts were presented and approved, and an update on the 2023 results was provided.

• Tubos Reunidos had a positive 2022, with net profits of EUR 43.5 million.

• Revenue for the period up to 31 May 2023 exceeded EUR 300 million, an increase of 35% year on year.

• During the first five months of the year, Tubos Reunidos generated net profits of over EUR 50 million, which is more than EUR 7 million higher than the figure for the entire previous year.

• Planned investments for 2023 are in excess of EUR 25 million.

Bilbao, 29 June 2023. The 2022 annual accounts of Tubos Reunidos were approved at its Ordinary General Meeting in Bilbao today. Executive Chairman Francisco Irazusta also provided an update on the first five months of the year.

Between 1 January and 31 May 2023, revenue exceeded EUR 300 million, an increase of 35% year on year that was forecast by the Group's end-2022 order book.

Although this data is testament to a very positive first half, we should acknowledge that order intake is currently adjusting to a market downturn. This situation affects both demand and prices, which will undoubtedly have an impact in the second half of the year.

Chairman Francisco Irazusta commented: "We must continue to work every day and not lose sight of the uncertainties that are present across all global economies right now as a result of higher raw materials costs, unprecedented energy costs and supply chain problems, and the resulting impact on inflation. Investments in the sector, born out of a need to adapt to the energy transition, can cause ups and downs because higherinterest rates hinder project viability, and we have already noticed a slowdown in demand".

Although activity is dependent on the markets, the company has stressed that it is in line with its Strategic Plan. Indeed, in 2022 Tubos Reunidos achieved a net profit of EUR 43.5 million, compared with a loss of EUR 64.7 million in 2021.

Mr Irazusta added: "2022 was a good year, with a strong increase in demand for drilling and driving in North America and the contraction of a significant portion of traditional supply, as a consequence of the anti-dumping provisions there, meaning that, throughout the year, the order intake continued to gain momentum month on month".

Strategic Plan

The 2021-2026 Strategic Plan continues, and in 2022 the most notable elements to be implemented were:

1. Collective Agreements for the Amurrio and Trápaga plants signed for the period 2022-2027.
2. Investments under way to improve processes at both plants and start-up of the Group's new steel mill in Amurrio, which will commence operations in the third quarter of 2023, as well as greater production capacity in the USA.
3. Fulfilment of contractual obligations with SEPI (Sociedad Estatal de Participaciones Industriales - Spanish state-owned industrial holding company) and the financial institutions that in 2021 had supported the Tubos Reunidos Group's business project.

Forecasts

There was growth in the 2023 financial year up to 31 May, with revenue up by 35% year on year to more than EUR 300 million, and margins also improved with EBITDA of over EUR 70 million. Net profits were in excess of EUR 50 million, which is EUR 7 million more than in the whole of 2022.

In contrast, order intake has declined significantly in recent months due to a downturn in both apparent demand and prices, which will have a significant impact on second-half results. This is, however, in line with the Strategic Plan. Tubos Reunidos currently has an order book worth EUR 141.7 million.

Energy transition

The important events we are currently experiencing mean that the energy sector is right in the midst of a period of growth and accelerated transition, so it is difficult to predict how this year will end, let alone how 2024 will start.

Regarding investments in 2023, the smelting processes at the Trápaga and Amurrio steelworks will be pooled after the summer, and gradual investment will be made in the rolling and finishing facilities of the Trápaga and Amurrio plants. We will also invest in implementing our increasingly advanced digitisation plan and in the heat treatment and finishing capacity of our US plant. These investments exceed EUR 25 million and will allow us to make concrete progress with the implementation of our Strategic Plan.

About Tubos Reunidos

Tubos Reunidos is a company listed on the Spanish stock market, with more than 130 years of experience. It is a global leader in special niche segments of seamless steel pipe products. The Group has four production units in Amurrio and Subillabide (Álava, Spain), Valle de Trápaga (Bizkaia, Spain) and Texas (USA).