Turkish pipe producer Borusan Pipe recorded a significant drop in net profits for the first nine months of 2024, citing difficult market conditions. Net profit fell to USD 11 mln, a steep decline from USD 149 mln in the same period last year, according to its latest financial report.
The company attributed the profit slump to declining raw material prices, increased competition, and weakened demand. Despite implementing cost-reduction and efficiency measures, Borusan faced additional pressure in Q3 2024 from underutilized production capacity in its automotive business, particularly in its primary export market, Europe, and the industrial construction segment in both domestic and international markets.
The real appreciation of the Turkish lira, combined with a significant portion of revenue in foreign currencies, further strained operational expenses. High financing costs also negatively impacted on the company’s financial performance. Borusan’s EBITDA dropped sharply to USD 96 mln in Jan-Sep 2024, compared to USD 276 mln during the same period last year.
On a positive note, Borusan achieved a 15pct YoY increase in sales revenue, reaching USD 1.3 bln, and a 32.2pct YoY rise in sales volume to 907,300 tons. Revenue growth was driven primarily by the infrastructure project segment, boosted by the consolidation of Berg Pipe’s financials as of April 2023.
Borusan’s geographic diversification paid off, with the share of U.S. revenue rising 7 percentage points YoY to account for 70pct of total revenue. Other international markets contributed an additional 11pct, bringing the total international revenue share to 81pct.
The company revised its full-year outlook downward due to worsening demand, pricing challenges, and cost pressures in Q3 2024. Sales volume is now projected in the range of 1.1-1.2 mln tons, compared to the earlier forecast of 1.05-1.2 mln tons. Revenue expectations have been lowered to USD 1.6-1.8 bln, down from USD 1.7-2 bln, while the EBITDA margin is revised to 5-7pct, compared to the previous range of 8-10pct.
Founded in 1958, Borusan Pipe is a global leader in welded steel pipe manufacturing. Operating across three continents with 10 facilities and a production capacity of 1.7 mln tons, the company offers over 4,000 product varieties. It holds a leading position in the global steel pipe market.
