With a return of operations at their mine coupled wiith a strong tubes business, Vallourec's revenue and EBITDA have continued to improve, further reducing
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Vallourec continues on its path back to Investment Grade and it is its call constraint nature that is keeping the bonds at 8.5% yield. All metrics point to a return to
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Vallourec reported strong numbers this morning backing up the 10% YTD increase in their share price this year. They have beaten our estimates for FY22 and with consensus
Read MorePlease find our updated model here.
The equity market reaction to this morning’s Q3 financials is negative but credit inventors should look past that and focus on the continued momentum in FCF before Working Capital and the lowering restructuring charges. We see the increasing inventory and increasing investment in Working Capital as an overall positive as the business continues to see positive momentum in its operations. We have not adjusted our projections this morning, although mid point of Company guidance is slightly higher than we anticipate. We are happy to maintain our position.
Read MoreThe recent Dallas Fed Energy Survey points to more difficulties for OIL & Gas drillers in the US, as inflationary pressure, shortage of equipment and lack of
Read MorePlease find our Vallourec model here. We will update the model further when Vallourec post their full H1 numbers in August.
Can Vallourec do a refinancing prior to completion of the cost savings? Vallourec’s Q1 results came with a large asterisk attached and Q2 is similar. However, alongside the fact that
SVP, one of the main creditors during the restructuring of Vallourec last year, is placing c.50% of their shares via Goldman Sachs and Barclays. This will reduce their holdings from 12.3% to c. 6%. Given the share performance this year,
Read MoreMain takeaway from Vallourec’s Q1 release last night is the emphatic statement that FY22 EBITDA now expected to be significantly above FY21, despite the mine shut down in Q1. The mine has restarted operations on May 4th, with restrictions for a
Read MoreFurther management changes at Vallourec were announced this morning, with a new CFO appointed. Mr Sacha Bibert, who was previously CFO of the
Read MoreVallourec has completed its selection process and has appointed Philippe Guillemot as Chairman and CEO. Mr Guillemot was f
Read MoreHigher shipped volumes than we had expected, drove top-line revenue and in turn increased EBITDA over our projections. But the increase in
Read MoreVallourec has reopened its mine operations following a temporary closure over the weekend due to the heavy rains in the Brazilian region. The heavy rains
Read MorePlease find our updated model on Vallourec here.
Vallourec’s timing on expanding their mining operations has given converted bondholders a significant boost to their investment, but it masks