Environment and Energy

Northwest Pipe Tubular Segment Sales Drop 61% in Q2

August 11, 2015

Pipe and tube manufacturers have been struggling to stay afloat as oil prices continue to depress demand from the energy industry. Northwest Pipe Company, headquartered in Vancouver, is among those companies posting a loss for second quarter.

The Tubular Products segment of Northwest Pipe saw sales from operations decrease 61.3 percent year over year to $15.4 million in the second quarter, driven by lower volume at 17,700 tons (down 57 percent), a 10 percent drop in selling prices per ton, and high import levels. Operations were curtailed in April due to market conditions resulting in a net loss of $3.8 million for Q2. The tubular segment services a wide range of markets including oil and gas, structural industrial, fire protection, low pressure and agriculture. Northwest Pipe announced at the end of July its intention to sell its remaining Energy Tubular Products division. The facility, located in Atchison, Kansas, produces line, structural and standard pipe. Last year the company sold its OCTG assets to Centric Pipe LLC.

Sales for the Water Transmission segment also fell significantly in second quarter, decreasing 38.2 percent to $38.4 million from $62.2 million in Q2 2014. The company blamed depressed market conditions resulting in an “extremely competitive bidding landscape.” Although competition is likely to remain robust, Northwest expects to bid in the next few quarters on a number of water projects are currently in planning stage.

Net loss for the company totaled $12.2 million which included a good will impairment charge in the Water Transmission segment of $5.3 million.

JP Morgan, citing increased production, lowered its forecast Monday for Brent crude prices by $16 per barrel for 2015 and $19 for 2016. The JP Morgan forecast is now $54.50 per barrel for 2015 and $52.50 for 2016. WTI crude oil is forecast at 48.50 per barrel in 2015 and $46.50 next year.