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Earnings Release
IVL 9M2014 core earnings up 129%
First 9 months show 32% increase in Core EBITDA
Nov 10, 2014
Bangkok, Thailand – 10 November 2014 – Indorama Ventures Public Company Limited (IVL), a world leading producer of intermediate petrochemicals, today reported fiscal 2014 nine months’ results where total revenues rose by 10% YoY to THB 189.3 billion, Core EBITDA increased 32% to THB 14.4 billion and core net profit rose 129% to THB 3.6 billion. Higher volumes and sales primarily arose from acquisitions, debottlenecking projects, utilization rate improvements and the increased proportion of high value-added, or HVA, business.

“Our geographic and product diversity have maximized business opportunity across frontiers and we are able to take advantage of our efficiency to remain in the forefront in each market where we operate,” Lohia said. “We will continue with our growth plans while maintaining stringent financial discipline to ensure our shareholders realize gains that are robust under varying economic circumstances within diversified regions.”

The HVA segment contributed 21% of total volume, 33% of revenue and 40% of core EBITDA of the first nine months. The rapid decrease in price of crude oil, the strong US Dollar and low interest cost environment is a positive for the overall business. "We are pleased with our first nine months’ results, an outcome of our relentless focus on delivering on our strategic priorities,” said Mr. Aloke Lohia, Group CEO of Indorama Ventures. In the future quarters, the significant fall of crude oil is positive for demand in our necessities (PET and Fibers) portfolio and for improving margins in the HVA portfolio. The weakening Euro, Mexican Peso, Turkish Lira and Indonesian Rupiah are positive for the overall cost position of the company.

IVL is relatively more resilient and better hedged to crude oil volatility reflected in its inventory gain of Baht 80 million in the third quarter this year.  Also in the third quarter of 2014, net sales rose 7% to THB 63.6 billion, core EBITDA rose 10% to THB 4.3 billion and Core earnings were 41% higher at Baht 795 million over the same quarter last year. The increase in earnings, release of cash inflow from working capital due to lower feedstock prices (which fall in line with crude oil) and operational excellence measure to optimize working capital, resulted in strong cash inflow from operations in the first nine months rising by 127% to THB 19.1 billion over the same period last year.

The company continued to lower its net operating debt to equity, bringing it down to 1.15 times as of September 30, 2014, and further down to 0.73 times following the successful placement of the company’s perpetual debentures at the end of October (based on September financial results notionally adjusted with these proceeds). The company successfully placed THB 15 billion on 31st October 2014, being the largest ever Perpetual Debentures issued by a corporate in Thai Baht. Thai rating agency, TRIS, reaffirmed the company’s A+ Rating in October 2014.

 


(1)This by our internal classification includes insurance claim for business interruption loss of profits
(2)This by our internal classification includes depreciation and amortization expenses
(3)This by our internal classification includes gain on bargain purchase on new acquisitions, including Joint Ventures and their related transaction costs, pre operative expenses, insurance claim of property damage, reversal of provision for impairment of property, plant and equipment and inventories from floods in Lopburi, Thailand and other impairments.

Note: The consolidated financials are based upon elimination of intra-company (or intra business segment) transactions. For this reason the total of each segment may not tally with consolidated financials.