PARIS—Vallourec expects to post a net loss this year as the demand for its seamless steel pipes for the oil industry has collapsed together with oil prices.

The company said it expects the fourth quarter to be even worse than the first nine months of the year when it booked a net loss of €439 million ($474 million) compared with a net profit of €169 million in the year-earlier period. The company's profit in the third quarter was €164 million, from a profit of €80 million a year earlier.

The company attributed the losses to the dwindling demand from oil companies for drilling material as they cut costs to adapt to the oil-price collapse.

Vallourec's situation illustrates how oil-industry suppliers are sometimes suffering more than oil companies from the price environment. Some oil companies, like Total, have found profit sources in the refining or petrochemical industries to offset oil production's plunging revenue.

The company had posted a €924 million net loss last year after booking an exceptional impairment worth €1.1 billion. Excluding the one-off charge, the company's net profit was €239 million in 2014.

Over the past few years, Vallourec had made large efforts to focus on the supplies to the oil industry as demand for its other steel products had dwindled in Europe, its main market.

Vallourec's Chief Financial Officer Olivier Mallet said he expects demand for pipes from the oil industry will pick as oil companies will have to resume drilling at some point to supply the market. He said this could happen in late 2016 or early 2017.

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(END) Dow Jones Newswires

November 09, 2015 12:45 ET (17:45 GMT)

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