East Pipes: Water, energy security drives pipe demand

Mohammed Darweesh, CEO of East Pipes Integrated Company for Industry

Mohammed Darwish, Acting CEO of East Pipes Integrated Company for Industry (East Pipes), said the outlook for the pipe sector will remain positive in the coming period.

Speaking to Argaam, Darwish noted that pipeline infrastructure has become increasingly strategic and is no longer driven solely by project demand, but also by energy and water security, export flexibility, and supply chain resilience.

He explained that water transmission projects remain the backbone of demand for the company, while the oil and gas segment represents a strategic growth dimension.

He stressed that East Pipes’ priority is to translate this market vision into disciplined execution while maintaining margin quality and continuing to create sustainable value for shareholders.

The company maintained strong profitability levels, with gross profit margin at 28.1%, operating profit margin at 26.7%, and net profit margin at 24.9%. Shareholders’ equity reached SAR 1.56 billion, including retained earnings of SAR 1.3 billion, equivalent to nearly four times the company’s capital.

Cash liquidity rose to SAR 681 million by year-end, while the company successfully reduced loans to zero by the end of the year. This clearly reflects the strength of the company’s financial position and the efficiency of its cash flow management. Thus, annual dividends totaled SAR 6 per share.

East Pipes' record performance reflects the strength of its business model, the confidence of its customers, and the commitment of its teams across major infrastructure projects.

Success depends on reliability, quality, and disciplined execution, which remain the company's core focus.

Over recent years, the company has strengthened its market share and secured major strategic projects, reinforcing its position as a leading industrial partner in the infrastructure and energy sectors in Saudi Arabia and the region.

Darwish said the fifth production line, which began commercial operations in March 2026, marks an important milestone in the company’s growth journey by enhancing production capacity, operational flexibility, and readiness to serve large-scale strategic projects.

He noted that East Pipes is among the leading industrial firms specialized in manufacturing helical submerged arc welded (HSAW) pipes used in water, oil, and gas projects, in addition to providing double-jointing and advanced pipe coating services.

The company owns three integrated plants, including a pipe manufacturing plant with an effective capacity of up to 600,000 tons annually, a double-jointing plant, and a pipe coating plant with annual capacity exceeding 4 million square meters.

The firm had previously announced on Tadawul that its board approved doubling the coating plant’s production capacity.

Darwish pointed out that some water projects may experience scheduling adjustments due to award cycles, financing conditions, or reprioritization, but emphasized that the underlying demand for water infrastructure will remain strong and sustainable.

He added that Saudi Arabia has a clear pipeline of strategic water transmission projects, including Riyadh–Qassim, Jubail–Buraidah, and Ras Mohaisen–Al Baha, among other major transmission systems, indicating that medium- and long-term demand will remain robust.

Opportunities in the oil and gas segment have become increasingly visible as an additional growth driver, with the company monitoring opportunities linked to developments in the East–West pipeline, the Master Gas System Phase 4 project, as well as maintenance requirements for existing and other strategic pipeline networks, Darwish said.

East Pipes' net earnings in the fiscal year ended March 31, 2026 leapt 50% to SAR 573.3 million, compared with SAR 382.1 million a year earlier, according to Argaam data.