East Pipes: Strong operating demand; deposits and investments make up 3% of net profit

In an interview with Argaam, he added that several major projects are currently underway, including the Riyadh–Qassim, Jubail–Buraidah and Ras Mishaan–Makkah water transmission systems.

He explained that rising demand for helical spiral arc-welded (HSAW) pipes in infrastructure and energy projects boosted utilization rates, which was the main factor behind the company’s 21.4% year-on-year (YoY) revenue growth in the third quarter ended December 2025.

Darweesh attributed the rise in net profit to revenue growth, improved operational efficiency, higher sales volumes in line with scheduled deliveries and an improved sales mix.

He noted that returns from deposits and short-term investments accounted for only around 3% of total net profit in the third quarter, as core operating activities remained the primary source of profitability.

The company’s current nominal production capacity stands at around 400,000 tons per year, while actual output may reach up to 500,000 tons depending on project specifications for pipe diameters and thicknesses.

With the addition of nearly 100,000 tons per year from the ongoing project, nominal production capacity is expected to rise to about 500,000 tons, while actual capacity could reach approximately 600,000 tons annually.

Darweesh said East Pipes expects the Master Gas System (MGS) – Phase 4 project to be executed by 2026-end or early 2027, which will play a key role in supporting demand for its products.

The company’s market outlook remains positive, he said, adding that demand is expected to maintain its current momentum.

Darweesh reaffirmed the company’s commitment to disclosures made on Tadawul in February 2025 concerning the establishment of a new production line for spiral submerged arc welded (SSAW) pipes at its plant in Dammam 2nd Industrial City.

According to the company’s announcement, the project began in February 2025 and is scheduled for completion in Q4 of FY 2025–2026. Trial production is expected during the same period for one month, followed by commercial operations in Q1 of FY 2026–2027.

East Pipes also announced an expansion in its coating segment, which will double capacity from four million to eight million square meters and improve in-house material handling capabilities. These steps are expected to support operational efficiency and strengthen readiness to execute anticipated projects.

Darweesh noted that after meeting strong domestic demand, East Pipes is now prepared to selectively expand into new markets, supported by a balanced project portfolio across the water and gas sectors, helping sustain stable profit margins over the medium to long term.

East Pipes is prioritizing meeting delivery schedules in the fourth quarter, ramping up production and enhancing operational readiness to support revenue and profitability growth, he said.

According to Argaam data, the company’s profits rose 38% to SAR 408.8 million in the first nine months ended December 2025, compared to SAR 296.5 million a year ago. The third-quarter profit stood at SAR 160 million.