TheChek News Flow

Vallourec Guides FY14 EBITDA -10% y/y, decline in orders in to impact deliveries through the first half of 2015 - press

Vallourec is updating its 2014 guidance following a significant temporary reduction in demand for its Oil & Gas operations in Brazil and in Europe, Asia, Middle-East, Africa (EAMEA) segments. In Brazil, Petrobras has decided to eliminate most of its tube inventories by year end, while maintaining its drilling plans. This will be a one-time adjustment. It will heavily weigh on Vallourec's sales in the second semester of 2014, with an estimated net EBITDA impact of circa €60 million. In addition, the Brazilian non Oil & Gas activities are impacted by the continued deterioration in the local macroeconomic environment, and declining iron ore prices. 

In EAMEA, the level of orders has strongly reduced resulting from E&P[2] operators adjusting their inventories and delaying some tenders for premium products. This will impact deliveries through the end of the year and in the first half of 2015. It does not change the positive structural trends resulting from major E&P capex programs in the region, required to offset depletion and support growing demand. 

The Group has taken several actions on the operational front to mitigate these temporary negative impacts:

In Brazil, Vallourec is adapting its mills to the lower load. 

To adjust to a lower demand in EAMEA, Vallourec is adapting its industrial operations servicing those markets, in addition to the recently announced measures aiming at structurally improving its European cost base. 

As a result, the Group now targets EBITDA to be down by approximately 10% when compared to 2013. 

The Group remains focused on Free Cash Flow generation, and has accordingly decided to reduce its capital expenditures by €100 million (down from an initial target of €500 million for 2014). 

Philippe Crouzet, Chairman of the Management Board, said: "The Group is facing a more challenging environment mainly due to temporary adjustments by selected large customers, and has taken immediate measures to adjust to this new situation. Management remains convinced of the long-term attractiveness of the global Oil & Gas end markets the Group serves and committed to implementing its strategy aimed at taking full advantage of these favorable structural trends."

Stock has been strong since this morning, all brewers names are strong

CALRB DC +2%

TAP US +5.65%

SAB LN +4.84%

China's "Evaporated" Collateral Scandal Spreads To Second Port

Starting back in May of 2013, we first predicted that China's "Lehman event", even more troubling than the recent advent of Chinese corporate bankruptcies and perhaps even its housing crisis, namely the "discovery" that behind China's virtually-infinite rehypothecation machine - the backbone of its shadow funding markets - the amount of actual physical commodities is severely limited and misrepresented, meaning that for every paper claim on an underlying "funding" metal, there are pennies on the dollar, or renminbi as the case may be, of actual underlying collateral. Or, as MF Global's Jon Corzine may say, "it evaporated." A year later, this too prediction has come true, and overnight none other than Goldman laid out a checklist of just how the recent revelation that not all bonded warehouses at the port of Qingdao, China's third largest, will become the catalyst to further CCFD unwinding.

--> Full article {http://bit.ly/1kXmHl9}

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TAP is one of the last independant brewer in the US

Strong volume today 1.1mil shares already