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Indorama Ventures Reports Net Earnings of THB 4.4 Billion in 1st Quarter 2017
May 08, 2017
  • Core EBITDA increased by 60% to THB 7,681 million.
  • Reported Net Profit after Tax and NCI of THB 4,426 billion, up 8% year-on-year. EPS THB 0.87
  • Volumes up 24%, commensurate with increased sales by 25% on a year-on-year basis.
Bangkok, Thailand – 8 May 2017 - Indorama Ventures Public Company Limited (IVL), a global chemical producer, today reported financial results for first quarter 2017.
The overall performance of the company has been superior as a consequence of following a holistic integrated and globally diversified business model. The quarterly performance benefitted from expanded margins from successful integration of the HVA and other assets acquired in 2016 and the added benefit of normalized production from IVL’s EOEG facility in USA.
On a year-on-year basis, production was up 24% and sales revenue was higher by 25%. In 1Q17, core EBITDA for the company grew by 60% to THB 7,681 million. This step change in the quality of earnings is a reflection of the strategic fit of our acquisitions of selected portfolios which enhance the quality of our earnings and reduces volatility across cycles. The Industry itself continues to face challenges from over-capacity built over last 5 years.
In LTM as of March 31, 2017, IVL’s existing businesses, excluding the acquisitions made in 2016, delivered improved results as well from better capacity utilization and operational excellence projects to reduce cost. The Company reported volume growth in all geographic areas. Overall operating rate remained at 86% over the previous 12 months in 1Q17, enabled margin expansion and better asset utilization. Core EBITDA in last 12 months was THB 30 Billion, +37% year on year and ROCE improved to 12%, reflecting the Company’s prudent approach towards growth and capital allocation.
Mr. Aloke Lohia, Group CEO of IVL said, “We had a strong start to 2017 with 1Q17 performing very well on all of its key performance indicators. Through a unique integrated business model and growth in our HVA portfolio, we continue to outperform and deliver industry-leading performance despite continuing Industry over-capacity. Our robust earnings and significant EBITDA growth in the quarter and last 12 months is a reflection of the successful deployment of our focused strategies of earning diversification, growth in key geographies and value-enhancing integration.”
Over the past 5 years or so, IVL has invested substantially in creating a diversified earnings stream via its HVA portfolio. Diversification into HVA, which now accounts for 50% of overall core EBITDA, has enabled the Company to deliver robust earnings on a sustained basis. In order to ensure sharp focus, the HVA business is further segmented in three distinct and high-growth industry verticals, namely; automotive, hygiene and Industrials and is driven by investments in IP and innovations. Starting from scratch, the HVA segment now delivers revenues of around $ 3 billion and serves applications that individually grow at around 7% year-on-year. The recent announcement of the Glanzstoff acquisition similarly provides a strategic fit to the automotive segment in the HVA portfolio.
IVL is committed to investing around $ 1.2 billion on identified growth and maintenance-related projects over the next 2 years. Additionally, and during the same period, the company believes that there will be financial headroom for further investments based on its projections of internal cash accruals and prudent borrowing capacity. Operating cash flows has increased sizably from THB 4.97 billion in 1Q16 to THB 7.73 billion achieved in 1Q17.
“We look forward to another year of disciplined growth. PTA expansion in Rotterdam in mid-2017 and startup of US gas Cracker by end 2017 would not only provide strategic integration but are expected to further improve the quality and sustainable growth of earnings of IVL,” Mr. Lohia concluded.