Vallourec's profit rises on higher US prices, Mideast business stays resilient

By Mathias de Rozario

May 13 (Reuters) - French steel tubes maker Vallourec VLLP.PA on Wednesday reported a 4% rise in its first-quarter core profit that landed within its own guidance range, boosted by rising market prices in the United States.

Vallourec's earnings before interest, taxes, depreciation and amortization (EBITDA) were $220 million in the quarter, against the previously guided 165 million to 195 million euros ($194 million to $229 million). It had changed the reporting currency to U.S. dollars at the start of January.

Shares of the company, which provides tubing for oil and gas, low-carbon energy and industrial markets, rose around 5% in early Paris trading. They have gained more than 60% since the start of the year.

Vallourec reported stable tubes volumes in North America and said higher U.S. market prices more than offset increased energy and raw material costs.

Despite the war in the Middle East, the company made more than 25% of its revenue in the region, as main clients like Aramco in Saudi Arabia and ADNOC in the United Arab Emirates recorded resilient activity, it said.

"These customers have pipelines that enable them to continue exporting oil without having to pass through the Strait of Hormuz, so their business remained buoyant in the first quarter and is expected to remain so in the second quarter," CEO Philippe Guillemot told journalists.

Vallourec targets an EBITDA of between $175 million and $205 million in the second quarter, and said war-related cost overruns should be largely offset in the second half of the year.

The company continues its push into the new energy sector, Guillemot said. It signed a long-term supply agreement for tubular solutions with U.S. geothermal company Fervo Energy in April, representing up to $800 million in potential revenue.

($1 = 0.8522 euros)