MRC Global chairman: '2015 to be a challenging year'
MRC Global Chairman, President and CEO Andrew Lane said the company is bracing for a changing landscape in 2015.
MRC Global recently released its fourth quarter and annual 2014 results, which revealed record or near-record performances. However, MRC Global Chairman, President and CEO Andrew Lane said the company is bracing for a changing landscape in 2015.
“We expect capital spending in North America to be down more than 35%, impacting our upstream business most directly,” he said. “We believe the downstream business will be impacted more modestly. With lower revenue expected in 2015 we will focus on reducing costs and optimizing working capital, which we expect will increase operating cash flow and reduce outstanding debt between $200 and $300 million. Given the macro global energy outlook, we expect 2015 to be a challenging year for our company. However, we feel like we have positioned the company to weather this cycle and be in an even stronger position when we emerge.”
In the fourth quarter of 2014, company sales were $1.512 billion or 12.5% higher than the fourth quarter of 2013. Net income for the fourth quarter of 2014 was $31.2 million or $0.30 per diluted share compared with 2013 net income of $23.3 million or $0.23 per diluted share.
“We had a good fourth quarter in light of the falling oil prices during the quarter,” Lane said.
Lane noted the company’s fourth-quarter revenue and adjusted EBITDA of $102 million was the second-best fourth quarter in the company’s history, surpassed only by 2008.
Lane added MRC Global’s $5.933 billion in revenue in 2014 was a company record and its $424 million in adjusted EBITDA was the third-best year surpassed only by 2012 and 2008 with both those years having much higher carbon pipe pricing than 2014. MRC Global’s 2014 net income of $144 million was the third-best in company history, trailing only 2008 and 2013.
In other company news, MRC Global recently announced McJunkin Red Man Corp., MRC Global’s U.S. operating company, has executed a five-year extension to its current supply agreement with Marathon Oil Co.
The agreement, which has been in place since 2009, provides for the supply of maintenance, repair and operations materials, line pipe, OCTG and MRO/project services in the Eagle Ford and Bakken shales, the Rocky Mountain region and the Gulf of Mexico.
The agreement continues a long-standing relationship between the two companies that dates back more than 25 years. Marathon Oil is a leading Houston-based global exploration and production company with operations in North America, Europe and Africa.