Vallourec, the global leader in premium tubular solutions, has demonstrated resilient performance in the third quarter of 2024, posting an EBITDA of €168 million with a robust margin of 19%. The company's financial results reflect its strategic adaptability in challenging market conditions, particularly in the US OCTG sector.
The company's revenue stream in Q3 2024 reached €894 million, marking a 22% decrease compared to the same period last year. This decline was primarily attributed to a 15% reduction in volume, stemming from lower Industry volumes following the closure of European rolling mills. The revenue impact was further compounded by a 1% price/mix effect, a 2% Mine & Forest effect, and a 4% currency effect.
In the Tubes segment, which represents Vallourec's core business, EBITDA reached €162 million in Q3 2024, compared to €193 million in the same period last year. The decrease was mainly due to lower profitability in North America, though this was partially offset by improvements in other regions driven by higher market pricing and benefits from the New Vallourec plan. The segment maintained strong operational efficiency with EBITDA per metric ton at €556.
The Mine & Forest division demonstrated operational resilience, achieving an EBITDA of €22 million, despite challenging market conditions. Iron ore production sold reached 1.3 million metric tons, showing a decrease from 1.8 million metric tons in Q3 2023. The division's performance was impacted by lower sales volumes and realized prices, though it showed sequential improvement with a 43% increase in EBITDA compared to Q2 2024.
Vallourec's financial health continued to strengthen, with total cash generation reaching €130 million in Q3 2024. The company's deleveraging efforts proved successful, marking the eighth consecutive quarter of debt reduction, with net debt decreasing to €240 million from €364 million in the previous quarter. This achievement underscores the effectiveness of the company's financial management strategy.
The company's liquidity position remained robust at €1,561 million, comprising €814 million in cash and significant available credit facilities. This strong liquidity profile provides Vallourec with substantial financial flexibility to pursue its strategic initiatives and navigate market fluctuations.
Looking ahead, Vallourec maintains its full-year 2024 EBITDA guidance of €800-850 million, demonstrating confidence in its operational capabilities despite market challenges. The company expects Q4 EBITDA to increase sequentially, driven by higher deliveries in both US and international markets, though iron ore production is anticipated to decline due to seasonal factors and soft export market conditions.
