The Magnitogorsk Iron and Steel Works (MMK) and Gazprom have signed two agreements for trilateral scientific and technological cooperation programs with pipe producers TMK and the Chelyabinsk Pipe-Rolling Plant (ChelPipe), MMK announced.

The programs are designed to be implemented from 2016 to 2021. They will provide mutually beneficial solutions to Gazprom’s needs for innovative and reliable pipe products. The programs will focus on developing technology for flat products and pipes from high-strength steel (up to k90/X120); steel that is highly resistant to carbonic acid environment, as well as stress corrosion; and from steel used in applications across a wide temperature range. Cooperation among the companies will entail the development of new engineering materials for natural gas liquefaction and underwater production projects.

Under the agreement, MMK will work with TMK and ChelPipe on research and development (R&D), as well as technology, while Gazprom will provide organizational and consulting support. The companies’ technical, scientific, organizational, and intellectual capacities will be key to the successful implementation of the programs, and the three project participants will solicit other specialized entities to join in the implementation process to ensure quality results.

Gazprom is the world’s biggest gas company. Its authorized capital is RUB118.367 billion (USD1.95 billion), which consists of 23,673,512,900 common shares of stock with a face value of five roubles. The Russian government is Gazprom’s controlling shareholder.

The IFRS net profits of Gazprom to be distributed among the company’s shareholders for the first half of 2016 decreased by 10 percent to RUB607.16 billion (USD10.01 billion). Sales revenues, net of VAT and custom duties, increased by five percent to RUB3.064 trillion (USD50 billion). The sales revenue growth was mainly driven by an increase in gas sales to Europe and other countries.

The Magnitogorsk Iron and Steel Works is among the largest world steel manufacturers and the leader in Russia’s iron and steel industry. The company’s assets in Russia are a large iron and steel complex that encompasses the entire production chain from preparation of iron ore to the advanced processing of rolled steel. MMK produces a great variety of metal products, and high-level-processed goods of the greatest added value prevail in the company’s product mix. In 2010, MMK produced 11.4 million tons of steel and 10.4 million tons of finished metal products.

The IFRS net profits of the MMK Group for the first half of 2016 increased by four percent year-on-year to USD486 million from USD468 million. Revenues decreased by 18 percent to USD2.602 billion from USD3.156 billion. The EBITDA for the accounting period decreased by 12 percent to USD847 million, and the operating profit fell by 10 percent to USD624 million.

According to AK&M Information Agency’s DataCapital information retrieval system, the RAS net profit of the Magnitogorsk Iron and Steel Works for the first half of 2016 decreased by 10.49 percent to RUB25.659 billion (USD420 million) from RUB28.666 billion (USD470 million) registered in the prior year. Revenues decreased by 1.83 percent to RUB157.75 billion (USD2.60 billion) from RUB160.684 billion (USD2.65 billion). Sales profits fell by 15.64 percent to RUB33.851 billion (USD560 million) from RUB40.129 billion (USD660 million). Pre-tax profits went down by 10.02 percent to RUB32.334 billion (USD530 million) from RUB35.933 billion (USD590 million).

TMK (literally Pipe Metallurgical Company) is a tubular goods producer that is among the top three world pipe manufacturers. TMK’s production assets located in Russia, the U.S., Romania, and Kazakhstan are capable of manufacturing six million tons of tubular goods annually. TMK’s principal beneficiary is Dmitry Pumpyansky.

The IFRS net profits of TMK for the first nine months of 2016 grew 27 times to USD81 million. Revenues decreased by 24.2 percent to USD2.436 billion. The adjusted EBITDA decreased by 20.1 percent to USD390 million.

According to AK&M Information Agency’s DataCapital information retrieval system, the RAS net profit of TMK for the first half of 2016 went up 89.54 percent to RUB19.434 billion (USD320 million) from RUB10.253 billion (USD170 million) registered in the prior year. Revenues increased 3.3 times to RUB74.522 billion (USD1.23 million) from RUB22.601 billion (USD370 million). Sales profits soared 3.62 times to RUB3.466 billion (USD60 million) from RUB958.367 million (USD15.8 million). Pre-tax profits went up 2.11 times to RUB21.606 billion (USD360 million) from RUB10.235 billion (USD170 million).

The Chelyabinsk Pipe-Rolling Plant (ChelPipe) manufactures pipes of various grades. Its share in the tubular goods output of the Russian Federation is about 12 percent. The company’s shareholders are the ELF Group Ltd (18.83 percent), Maris Services, Inc. (17.19 percent), Platini Steel Trade Ltd (15.28 percent), Orem Group S.A. (14.85 percent), Level Bay (9.73 percent), and the Pervouralsk New Pipe Plant (9.3 percent).

The IFRS net profits of ChelPipe for the first half of 2016 increased by 38 percent to RUB5.81 billion (USD100 million). Sales revenues decreased by 10 percent to RUB68.624 billion (USD1.13 million). Gross profits increased by two percent to RUB21.945 billion (USD360 million).

According to AK&M Information Agency’s DataCapital information retrieval system, the RAS net profit of ChelPipe for the first half of 2016 decreased by 25.71 percent to RUB3.438 billion (USD60 million) from RUB4.628 billion (USD80 million) registered in the prior year. Revenues decreased by 15.1 percent to RUB51.324 billion (USD850 million) from RUB60.455 billion (USD1 billion). Sales profits fell by 16.72 percent to RUB7.432 billion (USD120 million) from RUB8.924 billion (USD150 million). Pre-tax profits declined by 24.08 percent to RUB4.452 billion (USD70 million) from RUB5.864 billion (USD100 million).