November 9, 2017 / 7:07 PM / 2 years ago

UPDATE 1-France's Vallourec lifts guidance on U.S. drilling rebound

(Adds CFO comments)

Nov 9 (Reuters) - French steel pipe maker Vallourec raised its 2017 financial guidance on Thursday for the second time since July, after higher oil and gas revenue in the United States and cost cutting helped it swing to a core profit in the third quarter.

The company’s core oil and gas business has benefitted from increased drilling activity in the United States, where the rig count remains well above last year’s level despite recent declines.

“With the very strong increase in volumes, which started at the end of 2016 and grew during the whole of the first half of 2017, we started to significantly increase our prices,” said Chief Financial Officer Olivier Mallet during a call.

“Compared to the low point, we have increased our prices by just over 25 percent.”

The company said it expected the rig count in the United States to plateau in the months to come, assuming no major change in U.S. oil prices.

It now expects a loss before interest, tax, depreciation and amortisation of 10-30 million euros for the full year. It previously targeted a loss of 44-94 million euros.

Vallourec reported earnings before interest, tax, depreciation and amortisation of 9 million euros for the third quarter, versus a loss of 52 million euros a year earlier. (Reporting by Alan Charlish and Benjamin Mallet; Editing by Elaine Hardcastle and Mark Potter)

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