UPDATE 1-Vallourec slips into net loss, to cut 1,400 jobs
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PARIS Feb 24 (Reuters) - French steel pipe maker Vallourec unveiled a plan to cut 1,400 jobs in 2015 on Tuesday as a drop in demand from oil company customers following the plunge in crude prices tipped the group into a full-year net loss in 2014.
Vallourec, which had flagged in January a 1.1 billion euro ($1.25 billion) write-down on European and Brazilian assets, said it expected to cut costs by 350 million euros in 2015-2016 and slash annual investments to 350 million euros from 450 million euros.
"We are expecting a very difficult 2015, the beginning of the year has been extremely unstable," Chairman Philippe Crouzet told reporters during a news conference.
The oil and gas sector account for two thirds of Vallourec's revenue. The drop in oil prices, which have more than halved since June, have prompted oil companies to cut capital expenditure and tighten exploration budgets.
Vallourec said it expected exploration and production (E&P) spending by oil majors to drop by 15 percent this year. Major client Total unveiled its own investment cuts earlier this month.
The group is also targeting a positive free cash flow in 2015, after 274 million euros in 2014, it said in a statement.
In 2014, the group swung to a net loss of 924 million euros, compared to a profit of 262 million euros the year before, on sales of 5.7 billion euros, up 2.2 percent.
Vallourec plans to pay a dividend of 0.81 euros per share in 2014. ($1 = 0.8825 euros) (Reporting by Benjamin Mallet, writing by Michel Rose, editing by Leigh Thomas)
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