Tubos Reunidos closes with a turnover of 324 million and its business portfolio grows by 44%.
Amurrio, 28 February 2025. The Tubos Reunidos Group published their year-end results today, closing the 2024 financial year with a turnover of EUR 324 million.
The Group's EBITDA was EUR 8.8 million and the consolidated net profit for the year was EUR 28.6 million, which represents the third consecutive year of positive net results and has enabled a significant increase in equity. The discount auction process completed in January 2024 generated a debt reduction of EUR 80 million and a net positive financial result of EUR 66.5 million, which had a decisive impact on the Group posting a profit.
Cost containment actions, production and consumption efficiencies resulting from the actions already implemented in the part of the Strategic Plan relating to process transformation, as well as the moderation in the average cost of energy and raw material, have helped to offset some of the reduction in sales volumes and prices compared to the previous two years. The order book of EUR 144 million, up 44% compared to year-end 2023 thanks to the efforts and commercial strategy focused on premium and low-emission products, such as the O-Next® range, combined with greater market dynamism gives us confidence in the future good evolution of turnover.
The 2025 financial year will continue to be marked by the uncertainty of recent years and the effect of economic policy, especially tariffs, by the Trump Administration. This policy seeks both to favour the production of native energy sources and to increase exports, especially of natural gas, which are measures that should result in increased demand for seamless steel pipes. On the other hand, the effects of the tariffs adopted on seamless steel pipe trade flows globally are difficult to predict, but they undoubtedly pose a challenge for which Tubos Reunidos has a solid portfolio position, as it has a factory in the market with the highest demand and price (USA) and the trust of customers.
Business development
Demand for seamless steel pipes was affected in 2024 by: persistently high inventory levels among customers and distributors, customer caution in the face of expectations of cost containment, the erratic evolution of the main European economies, global geopolitical uncertainty, the impact that the change of administration in the US may have and the competitive pressure of Chinese producers who are experiencing weak domestic demand. Since mid-2023, this combination of factors has led to a drop in order volume that has had a strong collateral impact on price and, consequently, on margins.
Even so, as the financial year has progressed, and especially in the last quarter, we have been seeing a greater dynamism in the demand of some markets and segments. Thus, pipes used in drilling and carrying, and pipes used in power plant manufacturing projects are showing a positive market performance that has translated into order book growth in the last quarter of 2024. On the other hand, pipes for mechanical use and, in general, all products intended for European markets remain sluggish due to the mass entry of products imported at a lower cost into the European Union (EU), mainly from China and Ukraine, and the worrying weakness of the German economy.
In terms of the geographical distribution of our seamless steel pipe sales, the US remained our biggest market, with sales of EUR 126 million, representing 41% of the Group's total revenue. The performance of the OCTG (Oil Country Tubular Goods) market in the US, the largest in the world, has been characterised by a reduction in the number of oil drilling rigs , pressure from local producers to protect their market share in a low-demand environment, and, in general, by the conservative attitude of distributors waiting for the result of the elections and, subsequently, the first measures of the Trump Administration. These first measures seem to indicate that extraction activity will be boosted and solidify the trend towards increased protectionist measures.
In Europe, Germany (the continent's main market) has had an erratic performance marked by weak economic growth, political instability and the impact of the cost of energy after the reduction in Russian gas consumption. Italy and the Netherlands, (the second and third largest markets, respectively, heavily focused on large distributors), have been more consistent, remaining almost flat compared to 2023. Overall, all European markets have been severely affected by the strong growth in imports of low-cost products, especially from China and Ukraine, which has become a determining factor for the future of the industry in EU countries. As far as the seamless steel pipe market is concerned, the war in Ukraine has led to favouring imports from Ukraine to the EU, to the detriment of other European manufacturers. In this case, the possible end of the war in this country could favour the market, either because of the increase in Ukrainian reconstruction needs or because of the end of Ukraine's competitive advantage.
Among the other regions, growth in the Middle East, Africa and the domestic market was notable. This was the result of the company's strategic focus on diversifying its order book internationally and driven by the reactivation of projects.
Strategic Plan
With regard to the monitoring of the Strategic Plan, two of the key milestones have been the completion of the unification of steel mills and the debt reduction. The first of these, a fundamental pillar of the Strategic Plan, has meant that, since 1 January 2024, all the Group's steel manufacturing has taken place at the Amurrio plant, generating cost and emission efficiencies. Following this unification, the land and facilities of the old Sestao steelworks have been sold, generating a positive financial impact and positive results for the financial year.
The debt reduction carried out in January 2024 through a discount auction process led to the repayment of EUR 107 million of convertible debt through the payment of EUR 27.5 million. This operation generated a debt reduction of EUR 80 million and a net positive financial result of EUR 66.5 million, which had a decisive impact on the Group posting a profit for the third consecutive year.
The launch of the O-Next® product—a product with certified emissions of 0.0 in scope 1 and 2, which allows us to drive our customers' decarbonisation processes—also stands out as a differentiating factor compared to other manufacturers.
Since its presentation in April in 2024, there has been a growing interest in this product, which has resulted in signing agreements with several benchmark customers and in the manufacture of the first tonnes to be delivered during the first quarter of 2025.
Outlook for 2025
The year 2025 is marked by uncertainty in global markets.
At the forefront of these uncertainties are the unknowns about the economic policy of Donald Trump's presidential mandate and, specifically, tariffs. Despite concerns about the inflationary effect these measures could have on the domestic market, the elimination of the current quota scheme and exemption on the import of steel products from 12 March will have a very significant impact on our sector — the consequences of which may extend to other geographical areas, which could be affected by the de facto closure of the North American market and the transfer of price competition to these other places. On the other hand, the expectation of a strong dollar and the expected adoption of measures to stimulate investment in the OCTG segment open the possibility of a recovery in demand after many months marked by sluggishness and excess stock.
In the EU, the debate focuses on the state of the industry, especially in Germany, which has been affected by the end of access to cheap energy and the political instability of recent months that seems to be coming to an end with a potential grand coalition government. Nonetheless, the International Monetary Fund expects small growth of 1.0% in 2025, although the main economy, Germany, will only grow by 0.3% after two years in recession. However, it remains to be seen what effect the change of government after the elections on 23 February may have on the development of its economy. On the other hand, pressure from Chinese imports and the ineffectiveness of the protective measures adopted by the EU increase concerns about the future of the sector. On a positive note, the warning given by the Draghi report and many industry associations has brought this issue into the spotlight, which is an essential first step towards the adoption of measures to restore a globally competitive industry. The war in Ukraine, especially the end of it, may provoke a positive reaction in the market for power generation projects and thus also for seamless steel pipes.
About Tubos Reunidos
Tubos Reunidos has production centres in Álava, Bizkaia and Texas; and has a commercial presence in more than 50 countries through commercial agents and delegations in Germany, Italy, Korea, China, Dubai and the United States. In 2024, it ended the year with a turnover of EUR 324 million and a workforce of 1400 professionals.
Tubos Reunidos is a global steel group specialised in the manufacture of seamless steel pipes for strategic sectors such as bioenergy, geothermal energy, solar and wind energy, nuclear energy, carbon capture, oil and gas, as well as automotive, construction and engineering and hydrogen generation.
Tubos Reunidos is the first seamless steel pipe manufacturer to produce a net zero steel pipe, reaffirming its commitment to the transition to a low-carbon economy.
