What does Tubi do? 

Tubi is a manufacturer of specialised, large diameter high density polyethylene (HDPE) pressure piping. This pipe is used in industrial, irrigation, agricultural, mining, and oil and gas industries. The company's first mobile pipe plant was completed in 2014. By 2017, the company had produced 14,000 tonnes of pipe. In May Tubi opened its third production plant, located side-by-side with its existing plant in Florida USA. Another plant is located in Odessa, Texas.   

How has the Tubi share price been performing? 

The company listed on the ASX last year at 20 cents a share. Tubi shares were trading as high as 35 cents last August, but dropped sharply at the start of November when the company revised earnings forecasts downward. Prospectus forecasts were for statutory earnings before interest, tax, depreciation and amortisation (EBITDA) of $9.467 million and EBIT of $6.09 million for FY20. The company revised these downwards to $1.775 million and $0.01 million, respectively. 

How is Tubi's business performing? 

Tubi was able to continue production throughout the pandemic as production of HDPE pipe is considered an essential service in Florida. Having 2 plants located side-by-side allows for lower electricity and labour costs and reduced plant maintenance. With the opening of the new plant, Tubi saw production increase 55% from Q3 to Q4. The production results were in line with Tubi's strategy of moving from 1 plant to 3 across the US, with each servicing different markets. 

The company says the uplift in production proves the competitive advantage of its mobile technology and ability to produce on-site, long length pipe. Production orders for July and August have been confirmed for the Florida plants, underpinning the first quarter of FY21. CEO Marcello Russo noted, "significant orders from key clients are increasing in frequency, product diversity and volumes. With the third manufacturing plant commissioned and operating, Tubi is well positioned to service these orders." 

What's next for Tubi? 

Tubi's latest production update, revealing July's 21% increase in production, demonstrated the benefits of the new plant. Russo commented: "The two plants situated in Florida have been producing consistently, efficiently, at high rates of volume, and producing at a high standard of quality. Our customers are benefitting from our operations, our competitiveness, and our product differentiators."

Investors will be hoping this flows through to an uplift in earnings.

At the time of writing, the Tubi share price is sitting at 11 cents per share, down 4.35% on yesterday's close.

The post Why the Tubi share price is spiralling today appeared first on The Motley Fool Australia.

Tubi announces production turnaround

Despite the disruptions of the coronavirus pandemic, Tubi's company update announced that it's seen a significant production turnaround.

During Q4 and Q4 FY20 the company achieved a 55% increase in production volume. Tubi increased its production volume through a 85% increase in month-on-month volume from April to May and a further 51% increase in volume from May to June.

Tubi attributed the turnaround in production volume to its mobile technology and ability to produce onsite, long-length piping. The company outlined its production strategy in its March investor presentation and results are currently in line with this thanks to its recent volume increase.

Tubi also confirmed its existing production orders at its Florida plant through July and August. The company's Chief Executive Officer, Marcello Russo stated that "Significant orders from key strategic clients are increasing, resulting in greater product diversity and volumes."

In addition, Russo reassured investors that, "With the third manufacturing plant commissioned and operating, Tubi is well positioned to service these growing orders through covid-19."  

What does Tubi do?

Tubi is an Australian-based manufacturer of specialised, large-diameter high-density polyethylene (HDPE) piping. The company uses its piping for water, irrigation, oil and gas, mining, and infrastructure. Tubi's competitive advantage comes from the company's mobile production plants which allow a reduction in manufacturing and transportation costs.

Tubi currently has 3 production plants operating in the US, with 2 plants in Florida and 1 in Texas. The company's Florida operations were classified as an essential service and continued operations during the COVID-19 pandemic.

In addition to mobile plants, Tubi also boasts lower costs and faster installation than its competitors. Tubi's key drivers include efficient production, economies of scales, spread price and substantial cost savings to clients. The company holds its own sales team and has first rights to over 15 projects.

Foolish takeaway

At the time of writing, the Tubi share price is trading 100% higher at around 15 cents. The company opened the day at 9 cents and hit an intraday high of 33 cents. 

The post Tubi share price soars 250% with COVID-19 business update appeared first on The Motley Fool Australia.