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Earnings Release
IVL Revenues and Earnings rise in 3Q13 Revenues of THB 59 billion a new quarterly record
Nov 11, 2013
Bangkok, Thailand – 11 November 2013 – Indorama Ventures Public Company Limited (IVL), the world’s largest Polyester value chain company, saw an improvement in its business in the third quarter of 2013, with revenue climbing by 11% to  US$1.9 billion from US$1.7 billion in 3Q12. The company experienced its highest EBITDA of the past eight quarters, up 23% over the last quarter to US$131 million. In line with EBITDA growth, IVL achieved a net profit after tax and minorities of US$ 35 million (THB 1.1 billion) in 3Q13, versus US$ 7 million (THB 0.2 billion) in 2Q13. A modest recovery of prices led to an inventory gain of US$8 million in 3Q13.

The company’s core businesses are Polyethylene Terephthalate (PET), which reported an EBITDA of US$67 million in 3Q13 while the Fibers and Yarns segment reported EBITDA of US$18 million. Feedstock, consisting of PTA and MEG, reported EBITDA of US$47 million, a recovery of both volumes and earnings after the successful change of catalyst at the company’s Oxide & Glycols site in Houston, Texas.

“As a global company with a strong portfolio of assets, Indorama Ventures’ strategy has been to diversify risk geographically and therefore regional results provide an important overview of how the moving parts of the business are performing,” says Aloke Lohia, Group CEO of Indorama Ventures Public Company Limited.  “Our Asian business, which has seen the impact of tremendous oversupply of PTA in the region for a few years now reported an EBITDA of US$40 million in 3Q13 against US$28 million in the previous quarter once we strip out income from insurance claims, indicating some improvement. Asian PTA spreads were still less than half of their former levels, which we believe are not sustainable for the majority of players and will have to recover gradually for the industry to strike a balance at which it can sustain itself.

“Our European business was steady but soft with EBITDA of US$16 million against US$17 million in 2Q13, due to regional oversupply, Asian imports and a seasonal dip at the end of summer. However, the North American performance has been consistent with EBITDA now at US$76 million and the full operation of our Oxide and Glycols plant is likely to gain from better margins in an undersupplied industry,” Lohia said.

“The High Value Add (HVA) and the Western commodity business have been steady due to strategic investments made over last three years. Indorama Ventures’s ongoing investments will lead to larger volumes in an improving market while our Operations Excellence Team will improve cost reduction further, contributing to overall gains of US$150 million in the next three years.

With the New Year fast approaching, Lohia is keen to “Go for Growth” as the downcycle has hit many players a lot harder than Indorama Ventures.

“We are a growth company and we were able to add some very interesting pieces to our portfolio over time. Our strategy is bearing fruit during phases of the industry when everyone else is finding times tough, I am keen to explore appropriate opportunities for growth which will enable us to deliver increased profitability sustainably over the long term,” he said. “Indorama Ventures is now actively pursuing growth opportunities that have a strategic fit with our existing operations geographically or in terms of product diversification and are value accretive.”