Press Release
Indorama Ventures Reports Second Quarter 2018 and Half Year 2018 Results
Bangkok, Thailand – 7 August 2018 - Indorama Ventures Public Company Limited (IVL), a global chemical producer, today announced results for the second quarter and first half ending June 30, 2018.
Highlights:
- Revenue of $2,618 million in 2Q2018; 1H2018 revenue of $5,032, 22% higher YoY
- EBITDA of $398 million in 2Q2018, 15% higher vs. 1Q2018; 1H2018 EBITDA of $742 million, 57% higher YoY
- Net Profit of $259 million in 2Q2018; 1H2018 Net Profit of $443 million, 109% higher YoY
- The Board of Directors has approved an interim dividend of 0.70 baht per share, an increase of 55.56% compared to an interim dividend of 0.45 baht per share last year.
- Last Twelve Month EPS THB 5.02 – up 94% YoY post 9.8% dilution from warrants exercise
- Net Operating D/E ratio 0.45, Core ROCE 15.8% LTM basis
Summary:
IVL delivered another record performance, with improvements in production volumes and margins across all key segments and geographies. This performance reflects:
- Portfolio development – IVL's strategy to drive sustainable and profitable growth of both high-volume Necessities and stable but high-margin High Value-added HVA business continues. We further upgraded our portfolio through organic growth, operational excellence initiatives, value accretive acquisitions and strategic integrations. IVL now operates on a global scale of an integrated Polyester Value Chain and HVA platform, with a more resilient product and geographic mix. IVL is the world's largest producer of PET.
Our diversified portfolio provides an earnings mix that combines the higher-volume Necessities (80% of LTM 2Q 2018 volume), now with improving margins, and stable-margins in the HVA business (20% of LTM 2Q 2018 volume). - Strategic investments – Investments continue to drive value-accretive growth with six acquisitions since March 2018 including PET plants in Brazil and Egypt, which has added net PET capacity of 1.1 million tonnes; Avgol which will enhance IVL's HVA portfolio and market share in the personal hygiene segment; Kordarna which will propel IVL to a leading tire cord producer in Europe and globally, with a complete range of tire reinforcement products; Medco, which is a leading packaging company in Egypt with strong customer relationships; and Sorepla, a recycling business in France to serve increasing demand for recycled plastics like rPET.
- Structural change with strong industry momentum – Industry fundamentals continue to be positive, led by strong demand growth for 100% recyclable PET, supply balance and on-going improvements seen in the PET industry. This creates opportunity for well-managed and committed producers to enable supply reliability to customers in tight market conditions.
The structural improvement in the commodity cycle resulted in IVL's LTM 2Q 2018 EBITDA from the Necessities business of $716 million surpassing EBITDA contribution from the HVA business of $540 million for the same period thus reflecting margin recovery in the Necessities segment. - Sustainable Development – On 18th June 2018, the FTSE Russell reiterated IVL as a constituent of the FTSE4Good Index 2018 and identified the Company as the top performer in its peer group of global chemical companies.
2Q2018 Financial Highlights:
| Quarterly | 6-Month | ||||||
|---|---|---|---|---|---|---|---|
| ($ million) | 2Q18 | 1Q18 | 2Q17 | 2Q18 YoY |
1H18 | 1H17 | 6M YoY |
| Consolidated Revenue | 2,618 | 2,414 | 2,089 | 25% | 5,032 | 4,130 | 22% |
| EBITDA | 398 | 344 | 216 | 84% | 742 | 473 | 57% |
| EPS after PERP Interest (THB) | 1.45 | 1.04 | 0.56 | 161% | 443 | 213 | 109% |
| EBITDA/ton ($) | 156 | 148 | 97 | 61% | 152 | 107 | 42% |
- Record high EBITDA per ton, which rose to $156.
- Production of 2.5 million tons, up 15% year-on-year with impact from higher utilization rates, partly offset by force majeure by some raw material supply.
- EPS of THB 1.45 for 2Q2018, 161% increase year-on-year post dilution from warrants exercise.
Mr. Aloke Lohia, Group CEO of Indorama Ventures said:
"This is an encouraging set of results reflecting the strong execution of our strategy, the growth momentum in our businesses, and ongoing structural improvement in the Necessities segment.
The outlook for the second half of the year is equally encouraging as we anticipate current market conditions to prevail. We will continue to pursue value accretive opportunities in both our key segments to further strengthen the foundations of sustainable performance.
Based on our solid first-half performance and strong 2H2018 expectations, we are raised our guidance for our core EBITDA to increase by 75% on 2017 performance to $1.75 billion in 2019. These are exciting times at IVL, and I am confident in our ability to continue to deliver industry-leading performance."