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WSP Holdings announces third quarter 2012 results

Friday, Dec 28, 2012

WUXI, China, Dec. 27, 2012 /PRNewswire/ -- WSP Holdings Limited (NYSE: WH) ("WSP Holdings" or the "Company"), a leading Chinese manufacturer of API (American Petroleum Institute) and non-API seamless casing, tubing and drill pipes used in oil and natural gas exploration, drilling and extraction ("Oil Country Tubular Goods" or "OCTG"), and other pipes and connectors, today announced its unaudited financial results for the third quarter ended September 30, 2012.

WSP Holdings reported revenues of $141.3 million in the third quarter of 2012, compared to $159.2 million in the second quarter of 2012, primarily due to a decrease in revenues generated from export sales. Domestic sales and export sales accounted for 52.8% and 47.2%, respectively, of total revenues for the third quarter of 2012.

On a quarter-over-quarter basis, domestic sales decreased primarily due to a 13.3% decrease in average selling prices, partially offset by a 12.1% increase in domestic sales volume. Export sales decreased quarter-over-quarter primarily due to a 19.4% decrease in export sales volume, which was largely attributable to a decrease in sales of API products.

On a year-over-year basis, domestic sales decreased primarily due to a 17.9% decrease in domestic sales volume, partially offset by a 2.7% increase in average selling prices. Export sales decreased year-over-year primarily due to a 20.0% decrease in export sales volume and a 17.0% decrease in average selling prices.

API and non-API product sales accounted for 67.8% and 18.2%, respectively, of total revenues in the third quarter of 2012. Lower quarter-over-quarter sales revenues from API product sales were primarily due to a 9.4% decrease in sales volume and a 6.2% decrease in average selling prices. Non-API sales revenues increased quarter-over-quarter due to a 1.9% increase in average selling prices.

API sales revenues decreased year-over-year primarily due to a 16.1% decrease in sales volume and a 5.4% decreased in average selling prices. Non-API sales decreased year-over-year primarily due to a 35.3% decrease in sales volume and a 20.8% decreased in average selling prices.

Gross margin in the third quarter of 2012 was 5.5%, compared to 4.8% in the second quarter of 2012 and 9.0% in the third quarter of 2011. Higher quarter-over-quarter gross margins were primarily due to decreases in raw material costs, which resulted in lower costs of revenues in the third quarter of 2012. Lower year-over-year gross margins were primarily due to a decrease in average selling prices.

Source: WSP Holdings Limited

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