Bangkok, Thailand – 5 August 2021 – Indorama Ventures Public Company Limited (IVL), a global chemical producer, announced its second quarter 2021 financial results, reporting a record Core EBITDA of US$477 million as major economies recovered from the COVID-19 pandemic and drove demand for products across IVL’s businesses. IVL is forecasting similar strong growth in the second half of 2021 and in 2022 as global vaccination programs spur positive sentiment.
2Q2021 Performance Summary
- Consolidated Revenue of US $3,559M, an increase of 10% QoQ and up 52% YoY
- EBITDA of US$ 552M and Core EBITDA of US$ 477M
- Net profit of THB 8,340M, a growth of 39% QoQ, and compared to THB 154M a year earlier
- Core ROCE of 12.9%, up 443 basis points (bps) QoQ and up 715 bps YoY
- Project Olympus, the company’s cost saving and business transformation project, yielded US$ 116M in efficiency gains in 1H21, on track to our 2021 target of US$ 287M
- Acquisition of CarbonLite’s recycled PET asset in USA, making IVL the largest global producer of rPET resin
Mr. Aloke Lohia, Group CEO of Indorama Ventures, said, “During the pandemic we doubled down on our transformation and development programs as we build towards a future-ready organization, and we are now starting to see the results of these initiatives as global vaccination programs spur a recovery. We will continue to benefit from the economic tailwinds as all three of our business segments – Combined PET, Fibers, and Integrated Oxides & Derivatives (IOD) - experience strong demand and margins. At the core of our platform, is an ongoing focus on innovation-led products and a commitment to achieving our ambitious ESG and sustainability targets. All of our investments in these important areas will continue to drive IVL’s growth into the second half of 2021 and beyond as a world class sustainable chemical company. We appreciate the efforts of our colleagues across the globe who are working tirelessly and compassionately to ensure the safety and health of our IVL community. We are proud of the way that our teams have adapted to the pandemic.”
IVL delivered standout results in 2Q21 and a record Core EBITDA of US$477 million, bolstered by our global franchise, scale and leadership across our three business segments. Our record quarterly results include solid performance across regions. Americas and EMEA yielded a record, performing 59% higher Core EBITDA in 1H21 as compared to 1H20, while Asia grew by 15%. In 2020, IVL’s businesses passed the test of resiliency, and this first half of 2021 has highlighted the value creation coming from our platform.
Demand for our products remained robust across all segments and all regions. We achieved higher margins along our portfolio, leveraging on our integrated operating model and regional supply chain advantage offsetting headwinds in the ecosystem such as shortages of key raw materials and logistics constraints. In an environment of major disruption, IVL’s management has demonstrated agility in responsibly navigating the ecosystem and continuing to provide value to customers.
Strong growth forecast for 2H2021 and FY2022
The remainder of 2021 is expected to parallel the first half on the back of continued strong demand in our products from opening of travel with widespread vaccination and immunity.
- We anticipate significantly improved IOD volumes with Lake Charles (IVOL) in re-start mode post a shutdown in July 2020 due to lighting strikes, margins enhancement due to strong shale gas economics. Our oxyfuel business has returned to profitability with support coming from increased mobility due to the strong crude oil environment.
- Integrated PET margins will likely adjust to an increase in supplies as container movement eases towards year end.
- The semiconductor shortage is tempering some of our customer demand in the Fibers segment and the steep cost increase of polypropylene is leading to lag in pass through mechanisms for our hygiene vertical.
Overall, we see a strong 2H21 and 2022, anticipated to surpass our guidance given in the Capital Market Day presentation in January 2021.
ESG & Carbon Neutrality
In the second quarter, IVL announced 3 major developments in our sustainability journey. First, IVL completed the acquisition of CarbonLite’s recycled PET asset in Texas, U.S. This site will recycle more than 3 billion PET bottles per year, bringing IVL closer to our 2025 global target of recycling 50 billion bottles annually.
Second, IVL launched its Carbon Neutral PET* pellet made with renewable energy, locally sourced materials and low-impact water transport. This was launched on Deja, our sustainable brand platform. Finally, IVL announced a greenfield recycling facility in Karawang, Indonesia to process almost 2 billion PET bottles annually in support of the Government of Indonesia’s National Plan of Action on Marine Plastic Debris.
*This was mentioned in the 1Q21 MD&A as a post quarter event. Carbon Neutral PET was launched in April 2021.