“Responding to a generally weak overseas OCTG market, we increased our marketing and sales efforts in the Chinese domestic market. Our domestic sales accounted for 40.1% of our total net revenues in the first quarter of 2009, compared to 34.7% for the entire year 2008. Despite lower sales of OCTG products to North America, we successfully expanded new customer base in other overseas countries.

Our sales to overseas customers accounted for 60% of our revenues in the quarter, primarily because of sales of high-end API products to North Africa, said Longhua Piao, the chairman and chief executive officer of WSP Holdings.

First Quarter 2009 Results

WSP Holdings’ sales volume was 127,042 tonnes in the first quarter of 2009, up 33.7% from 95,024 tonnes in the year-ago quarter.

During the first quarter of 2009, domestic sales were $78.3 million and international sales were $117.2 million, accounting for 40.1% and 59.9% of total net revenues, correspondingly.

Sales volume for API products was 101,974 tonnes in the first quarter of 2009, up 117.5% from 46,883 tonnes in the year-ago quarter. API product sales were $147.5 million in the first quarter of 2009, up 148.2%, from $59.5 million in the year-ago quarter.

Sales volume for non-API products was 17,383 tonnes in the first quarter of 2009, down 45.6% from 31,948 tonnes in the year-ago quarter. Non-API product sales were $39 million in the first quarter of 2009, compared to $56.3 million in the year-ago quarter. Non-API products accounted for 20.0% of WSP Holdings’ net revenue in the first quarter of 2009, compared to 42.9% in the year-ago quarter. Lower sales revenues from non-API sales were primarily due to weak demand for non-API products from North America.

Gross profit in the first quarter of 2009 was $52.5 million, up 63.9% from $32 million in the year-ago quarter. Gross margin in the first quarter of 2009 was 26.8%, compared to 24.4% in the year-ago quarter. Gross margin improved because of comparatively higher average selling prices of API and non-API products, raised sales of high-end API products, and comparatively low and stable raw materials prices.

Operating expenses in the first quarter of 2009 were $22.3 million, up 222.3% from $6.9 million in the year-ago quarter. Operating expenses increased because of higher general and administrative expenses related to increases in the scale of WSP Holdings’ operations, the establishment of new subsidiaries, and higher salary expenses because of hiring additional employees. Selling and marketing expenses increased because of raised sales commissions to sales representatives.

Income from operations in the first quarter of 2009 was $30.1 million, up 20.1% from $25.1 million in the year-ago quarter. Operating margin was 15.4% in the first quarter of 2009, compared to 19.1% in the year-ago quarter.

Net interest expense was $3.9 million in the first quarter of 2009, compared to $1.5 million in the year-ago quarter. Net interest expense increased due to larger bank loans used for higher working capital requirements as a result of WSP Holdings’ increased scale of operations.

Basic and diluted earnings per ADS were both $0.21 for the first quarter of 2009, compared to $0.15 for both in the year-ago quarter.

There were 205,789,800 diluted weighted average ordinary shares outstanding in the first quarter of 2009, compared to 205,280,807 in the year-ago quarter.

Financial Condition

As of March 31, 2009, WSP Holdings had cash and cash equivalents, and bank balances of $158.7 million compared to $89.1 million as of December 31, 2008. Restricted cash totaled $319.3 million as of March 31, 2009, compared to $232 million as of December 31, 2008. Inventory grew because of the company’s raised scale of operations which resulted from new threading lines starting commercial production during the first quarter of 2009.

Net current asset was $86.4 million as of March 31, 2009, compared to $123.2 million as of December 31, 2008. Total WSP Holdings Limited shareholders’ equity was $427 million as of March 31, 2009, compared to $482.6 million as of December 31, 2008.

Recent Developments

In February 2009, Songyuan Seamless Oil Pipes Co. Ltd. (Songyuan Seamless), a subsidiary of WSP Holdings, put a new threading line with 60,000 tonnes per annum pipe finishing capacity into commercial production. Products from Songyuan Seamless will be sold to oilfields in Northern and Northeast China.

In March 2009, Liaoyang Seamless Oil Pipes Co., Ltd. (Liaoyang Seamless), a 70 % owned indirect subsidiary of WSP Holdings, put a new threading line with 60,000 tonnes per annum pipe finishing capacity into commercial production. OCTG products produced by Liaoyang Seamless will be sold to North China, Northeast China and overseas markets.

In April 2009, seven US companies and the United Steelworkers union filed a petition with the international trade commission and the US department of commerce, alleging that China-based OCTG manufacturers unfairly dumped OCTG products in the US market. The petitions allege that Chinese producers benefit from massive government subsidies and that dumping margins range from 40% to 90%.

The company has not been chosen as a mandatory respondent in the US government investigations regarding any below market dumping of OCTG into the US market or whether as a Chinese OCTG company it received subsidies from the Chinese government. The US department of commerce is in the process of determining which Chinese companies to examine while the US international trade commission is still reviewing whether the imports from China are causing or threatening to cause material injury to the US industry. Both US government agencies are anticipated to release their determinations in the upcoming weeks.

Business Outlook

Despite weak OCTG demand from international markets, we had solid performance in the first quarter of 2009. We expect stable and eventually increasing prices for oil and gas to lead to increased exploration and production activities and eventually increased demand for our OCTG products, said Piao. We have increased our sales to existing and new Chinese customers, and we have successfully sold our products to new customers in Central and South America, North Africa and Central and Southeast Asia, including Algeria and Ecuador. We are increasing our marketing efforts in the Middle East and Russia, and seeking more orders to supply our products to overseas projects of SINOPEC, CNPC and CNOOC.

Construction of both our new manufacturing and sales facility in Xinjiang Autonomous Region and our Texas pipe inspection facility are on schedule.

We now have a total of 864,000 tonnes of annual finished production capacity, up from 744,000 tonnes of annual production capacity as of December 31, 2008. We will continue to expand our projected production capability while managing capital and operational costs to meet the expected growth of our operations and to participate in the long-term growth opportunities in the Chinese and overseas OCTG markets, concluded Piao.