BANGKOK, Thailand — May 10, 2018 — Indorama Ventures Public Co. Ltd. (IVL), a global chemical producer, today reported financial results for the first quarter 2018.
The company has delivered another outstanding set of financial and operating metrics, underpinned by improvement in production volumes and margins across all segments and geographies. EBITDA was $344 million, an increase of 34 percent YoY, which is reflective of underlying strength in all segments and structural improvement in the polyester value chain. The star performer in the first quarter was PET, which grew its EBITDA by 64 percent, while Feedstock EBITDA grew 23 percent and Fiber EBITDA grew 10 percent. Operating Cash Flow grew 10 percent to $249 million.
First quarter production volume increased by 6 percent YoY to 2.3 million metric tons, mainly as a result of organic volume growth, operational excellence projects and higher operating rates as well as the successful integration of the HVA acquisitions announced in 2017. The company achieved its highest ever quarterly earnings per share of THB 1.04 post dilution of 11 percent from the partial exercise of warrants.
There was a strong improvement in North America and in EMEA. Asia is also on the path to recovery. However, current earnings from Asia, although improving, are not fully reflective of the fundamental improvements underway in the industry. Strong polyester demand growth, China’s ban of waste plastics and improved supply discipline are contributing to Asian earnings, which are expected to gain momentum in the forthcoming quarters.
The global outlook continues to be positive, backed by improving Asian sentiment led by robust demand growth and a favorable demand-supply balance leading to a cyclical upturn of the polyester value chain. Demand for PET continues to grow at around 6 percent.
In a strategic move to enhance earnings potential and add long-term value to the business in the Americas, the company has announced the acquisition of a 550,000 metric tons per annum PET facility in Brazil, and a joint investment in a 2.4 million tonne PTA-PET project at Corpus Christi in the United States.
The company’s Operating Cash Flow over the last twelve months of $941 million, has helped strengthen its balance sheet with the net operating debt to equity ratio improving to 0.39. Our growth plans include several strategic projects and a robust M&A pipeline that will continue to improve returns and add earnings growth over and above our organic initiatives.
Aloke Lohia, Group CEO of Indorama Ventures said: “We have started the year with an outstanding performance and an all-time high financial and operational result. This performance reflects the robustness of our strategy, but diversified across the value chain and geographically, the dedication of our employees and the desire to create sustainable growth in value for all our stakeholders. The strength of our balance sheet, predictable cash flows and accretive growth avenue gives me the confidence that we will achieve our stated target of 45 percent EBITDA growth in 2019 over 2017.
NOTE: Core EBITDA comes after excluding inventory gains/losses from the reported EBITDA.
Posted May 10, 2018
Source: Indorama Ventures