Vallourec SA, a French producer of steel pipes for the oil and gas industry, tumbled the most in more than a year after warning that a weak Brazilian real and slowing of drilling in that country may hurt profit.
The shares slid as much as 11 percent in Paris trading, the biggest intraday decline since May 11, 2012. They traded 9.4 percent lower at 44.68 euros as of 2:40 p.m. in Paris. In excess of 3 million shares changed hands, more than five times the three-month average daily volume.
After the close of trading yesterday, the company said in a statement that the current level of the Brazilian real is “expected to have a negative translation impact on H2 2013 results.” Vallourec reiterated targets for the year, with volumes and sales to increase and earnings before interest, taxes, depreciation and amortization to improve, it said.
“Although we believe the medium-term outlook for Vallourec’s products remains positive, we see few upside catalysts in the near term, pending stabilization in currencies and demand,” Standard & Poor’s said in a note to investors today.
S&P reduced its rating on the stock to hold from buy and lowered its target estimate to 48 euros.