Q4/2015 Report: 2015 – a Year full of Challenges

2015 proved a year full of challenges, as both demand and price levels dropped significantly. The collapse of the oil price resulted in much lower demand in the oil & gas industry. As a result, suppliers flooded other customer segments with their products, by this provoking fierce competition in world-wide markets. Because of this oversupply, but also because of a severe drop in the nickel price, prices for stainless tubes and pipes were in constant decline. There are no signs for quick improvement.

For Centravis, the situation was further aggravated by difficulties in the Russian market. The effects from a prolonged recession, due to low raw material prices and, high inflation and rapid currency devaluation, meant both lower volumes and substantially lower prices. Again, a fast recovery is unlikely, and new import duties on Ukraine products exported to Russia will make business even more difficult.

In order to mitigate such negative external factors, Centravis has started a comprehensive business transformation process improving productivity, raising efficiency and reducing cost. First encouraging results can already be seen, and significantly more will be achieved later this year.

During the 2015 year, we passed several important certifications, in particular ADGAS, ADNOC, ADCO and ZADCO, KBR, GE Power, Lyondell Basell, CB&I, KOCH Heat Transfer, VdTÜV 418, Ztrong Partner AS, Valmet, Achilles FPAL (Great Britain) & JQS (Norway and Denmark).

While most major industries experienced challenging times, the automotive and nuclear sectors were among those which kept the pace of development. Being proactive, Centravis invested into new equipment and services as well as products for higher-pressure engines, thus preparing itself for an again stronger demand in 2016.

2015 has seen a number of changes in the management team, necessary to successfully operate in turbulent times. Together, we are committed to provide excellent services to our customers, to maintain and improve the quality of our products, and to constantly improve working conditions for our employees.

2016 will again be a difficult year, for us like for the whole industry. The difficult environment forces us to speed up our internal program for improvement. We accept the challenge.

We thank all our customers for their continued support and trust.

Nikopol, March 18, 2016

Chairman of the Board Peter Kratz
Chief Executive Officer Yuriy Atanasov

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