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Earnings Release
Indorama Ventures 3Q 2016 Net Profit of THB 2,852 million, Up 57% Year-on-Year
Nov 10, 2016
  • Achieved Record Production of 2.38 Million Tonnes, higher by 22%
  • Quarterly EPS at THB 0.55, up 65% on a Y-o-Y basis
  • 3Q2016 ROE higher at 14.8%, ROCE higher at 11.4%

Bangkok, Thailand – 10 November 2016 – Indorama Ventures Public Company Limited (IVL), a leading global chemical producer, today announced its financial results for the third quarter 2016. The company reported a significant increase in its core profit (after tax and non-controlling interests (NCI) of Baht 2.85 billion in 3Q16, an increase of 57% year-on-year (YoY) on a reported basis. With one-off items, net profit was Baht 3.2 billion, an increase of 564%. This was driven by higher volumes in the feedstock business from recent acquisitions in the USA and Spain, a higher operating rate at 89%. Core EBITDA in 3Q16 was Baht 7.5 billion and the business continued to deliver double-digit Return on Capital Employed (ROCE).

Mr. Aloke Lohia, Group CEO of IVL said, “We continue to deliver strong performance across all business segments. It is encouraging that despite market volatility, demand for our products continues to remain vibrant with ongoing strong fundamentals. Indorama Venture’s performance can be attributed to having a sound strategy in place that leads to continued, profitable growth. Our financial position remains robust delivering strong cash flows from both existing and newly-acquired businesses and ongoing working capital efficiency. I remain confident that we are on track to achieve our 2018 goals”

Commenting on the global business, Mr. Lohia said, “Our North America business continues to outperform and has delivered consistent growth across all segments, with overall volumes growing by 33% following the completion of the acquisition of the BP facility, improvement in operating rates and higher integration. The gas cracker project is on plan and is expected to start up in the fourth quarter of 2017. It will offer us further integration in North America and therefore capturing the full value chain gains as well as improved return on capital.

“We see improvement in our EMEA business with strategic volume growth of 22% albeit following a depreciation of the Euro during the last twelve months in all business segments. Our aggregate EBITDA per tonne rose, driven largely by the increase in the High Value-added (HVA) business. IVL’s Asian operations delivered a significantly improved performance as production increased by 11% year-on-year,” Mr. Lohia concluded.

Indorama Ventures strategic planning to navigate tough market conditions existing due to overcapacity in Asia has achieved a transformational shift across several parameters. Overall production has increased by 22%, driven mainly by improved integration wherein feedstock production has increased by 44%.

As a consequence of increased integration and strategic expansions, core EBITDA of the Company has grown across all segments and at THB 25.48 billion is up 16% on an LTM 3Q16 basis. The Fiber segment grew its core EBITDA sharply by 26% YoY due to strong demand while the PET segment grew 9% YoY. The feedstock segment grew 13% YoY as the production from the newly acquired assets in the USA and Spain helped build volumes.

Also on a trailing 12 months basis, core EPS after perpetual debenture interest has increased to THB 1.67, a significant increase of 59%.

LTM3Q16 has only two quarters impact of new facilities added in recent months in the US and Spain. As the Company’s latest acquisitions improve with IVL leverage and get fully integrated into the business, the Company stands to benefit further from the synergy gains in the coming years.