Bangkok, Thailand – 7 May 2019 – Indorama Ventures Public Company Limited (IVL), a global chemical producer, today announced financial results for the first quarter 2019.
Highlights 1Q2019 Performance:
- Revenue $3.0 billion (THB 95.8 billion), +26% YoY
- Core EBITDA of $304 million (THB 8.4 billion), -7% YoY
- Net Profit (after Tax/NCI) of $117 million (THB 3.7 billion), -36% YoY
- Core Earnings per Share of THB 0.67, -32% YoY
The Company achieved consolidated revenue growth of 26% YoY from growth of capacities in all the regions and for the first time achieved $3.0 billion in a quarter. Core EBITDA was $304 million. The quarter was supported by our businesses in Integrated PET, Fibers and Packaging segments, which constitute 94% of capacity and contribute 92% of the core EBITDA, delivering strong results in these segments.
Earnings for 1Q19 and LTM were adversely impacted by lower earnings from Olefins & Specialty Chemicals business segments. Earnings from the Olefins business were impacted due to an extended shutdown and has since resumed production. Contribution from the Specialty Chemicals business was impacted by significant reduction margins and is expected to remain below expectation for the rest of FY 2019 due to ongoing weakness in this segment.
The Integrated PET segment benefitted from higher production volume and higher overall earnings as assets acquired in 2018 and the consolidations of 2018/19 were successfully integrated. These include acquisitions of PTA Portugal, PET (Egypt and Brazil), and the consolidation of PET in India and PTA in Indonesia. EBITDA contribution in this segment improved for the contracted businesses in the Western markets.
In the Fibers segment, we benefitted from solid results in all of our 3 verticals of Mobility, Hygiene and Lifestyle. The improvement was seen from better operating rates and weakening raw material prices.
Outlook 2019 – The strength in the core businesses (Integrated PET, Fibers and Packaging) is expected to remain for the rest of 2019. Earnings from the Olefins and Specialty Chemicals businesses are expected to remain weak for the rest of 2019. This changed ecosystem necessitated a comprehensive review of our EBITDA guidance. At this juncture, we believe it may be prudent to lower the previous guidance of core EBITDA for 2019 by 10-15%.
Ongoing Investment - IVL foresees the ability to invest another $3-4 billion of projected free cash flow over the next 3-4 years in addition to our committed investments in Corpus Christi JV, USA, in adjacent businesses, focusing on our new growth engine segments, while organically growing our Integrated PET and Fibers segment.
Organizational Development - IVL is preparing the organization to be future ready. Initiatives in this regard include the recent strengthening of the management team with the recruitment of a Chief Strategy Officer and Chief HR Officer with steps being taken to implement digitization programs and standardization of an ERP system.
Sustainability Highlight - IVL landed Thailand's first ever green loans for $100 million and €100 million. These loans are being provided in the form of a positive incentive loan, with commercial terms linked to the improvement in IVL's Environment, Social and Governance (ESG) score.
Mr. Aloke Lohia, Group CEO of Indorama Ventures said: "Despite encountering several temporary hurdles, I feel we have put into place the strategies necessary to continue our growth trajectory. Our mix of products and geographic diversity reflect the resilience of IVL's integrated business model in that we have the ability to overcome short-term events. We believe that with promising opportunities in new growth engine segments, supported by well-established positions in Integrated PET and Fibers, the IVL portfolio is poised for growth and we remain confident of doubling our EBITDA every 5 years."
Financials of Consolidated Business:
|$ million||Quarterly||Last Twelve Months|
|Net Profit after Tax and NCI ($m)||117||69||184||(36%)||752||674||12%|
|Net Profit after Tax and NCI (THBm)||3,708||2,355||5,814||(36%)||24,359||22,270||9%|
|EPS after PERP Interest (THB)||0.61||0.37||1.04||(41%)||4.19||4.15||1%|
|Operating Cash Flow||261||250||241||8%||1,010||872||16%|
|Net Debt to Equity (times)||0.92||0.87||0.61||51%||0.92||0.61||51%|