Bangkok, Thailand - 13 May 2020 - Indorama Ventures Public Company Limited (IVL), a global chemical producer, announced its first quarter 2020 financial results as follows.
1Q 2020 Performance Summary
IVL registered Revenue growth of 15% during first quarter 2020 over fourth quarter 2019 and negative 3% year-on-year, including integration of newly acquired assets from Huntsman. COVID-19 global pandemic, as well as the historical collapse in the crude oil price, had a muted impact on IVL’s underlying business and operations.
IVL achieved a core EBITDA of US$304M (THB9.5B) and an operating cash flow of US$340M (THB10.6B), an increase of 51% and 28% quarter on quarter driven by combination of volume and margins growth in our three business verticals of Combined PET, Integrated Oxides & Derivatives as well as Fibers. We have taken proactive steps to reduce our inventories, reduce our capex by US$300M (THB 9.34B) and achieved our targeted costs savings under our “Olympus program’. Dividend is maintained at Baht 0.175 in line with last quarter on core EPS growth to Baht 0.25.
First quarter 2020 Operating Income was US$ 148 million, lower year-on-year by 17% due to a near-term adverse impact on MEG and MTBE which is partially offset by improvements in PIA and PX. The quarter completed its planned turnaround in our PO/MTBE business, adversely impacting our operating income by about US$51 million. Our Fiber portfolio was partially impacted by lockdowns in China, India and Italy. Our Mobility Fiber portfolio faces headwinds from GDP contraction. The quarter provided strong positive momentum to our global businesses of Hygiene Fibers and our Integrated PET leadership in both volumes and margins as well as management of our regional supply chains, during this period of enhanced demand.
During these complex times of the COVID-19 global pandemic coupled with an historic collapse in the crude oil price, IVL’s performance has shown tremendous resilience with its regionalized geographical footprint, market segment participation and feedstock adaptability.
Mr. Aloke Lohia, Group CEO of Indorama Ventures said, “IVL’s Core EBITDA grew in all three segments (Integrated Oxides and Derivatives, Combined PET and Fibers) and in all regions as our products primarily go into daily necessities and non-durable consumer goods having inelastic demands. Our liquidity is strong with cash equivalents of US$ 600 million and committed drawable lines of US$ 1.9 billion thus in total US$ 2.5 Billion. Thus we have today three business verticals and a total of 10 sub-segments that blend in well together. This portfolio makes IVL much more integrated than ever before with diversified earnings streams. We participate in about dozen end-use market segments and our business now has scale, which creates tremendous resiliency and opportunity.
Project Olympus is on track and will bring in US$76M run rate cost savings in 2020. We decided to remain focused on our five strategic priorities (cost transformation, asset full potential, adjacency growth, recycling leadership and leadership development) as these are essential for sustainable advantages in the longer term.”