THAILAND: Indorama Ventures Q3 profit plummets
- Q3 profit slumped 64% to $50m
- Sales edged up 0.5%
- Board has approved plant expansion in US
Fibre producer Indorama Ventures has seen its third-quarter profits plummet 64% on the back of slowing growth in Europe and Asia.
The Thailand-based company said net profit after tax slumped to US$50m, compared to $139m last year.
"The last 12 months has witnessed extreme volatility that closely shadows what we experienced in the second half of 2008," the company said.
"This time, though, we are also experiencing a slowdown in Asia, particularly China and India. The severity highly correlated to Chinese overcapacity across the downstream petrochemicals, including PTA, PET and polyester fibres,"
Sales, however, edged up 0.5% to $1.70bn compared to $1.69bn the same quarter last year.
Separately, the board of Indorama Ventures has approved the company's plan to expand its PET polymers production capacity in the US by setting up a new plant. The facility, which is expected to be completed in the fourth quarter of 2015, will have a capacity of 540,000 tonnes per year.
The expansion will take Indorama's PET polymers capacity in North America to 2,100,000 tonnes per annum.
IVL casts optimism for 2013 EBITDA rises 17% over Q2 2012
Bangkok, Thailand – 16 November 2012 – Indorama Ventures Public Company Limited (IVL), the world’s leading vertically integrated Polyester Value Chain producer, announced its Q3 2012 results. EBITDA rose to US$ 122 million compared to US$ 105 million in Q2 2012 and net profit rose to US$ 50 million from US$ 39 million. Sales of US$ 1.7 billion were on a par with Q3 2011, though slightly down on Q2 2012. While consolidated IVL’s results improved quarter on quarter, year-on-year results were weaker than Q3 2011 reflecting poor sentiments in Asia and Europe at present.
Quarter-on-quarter results were a reminder of IVL’s strength as a global player, with the benefits of economy of scale and superior product offerings that kept utilization rates steady. The Company still saw weak margins in Asia led by concerns about the Chinese economy, which remained depressed over several quarters, and poor margins for Asian PTA caused by overcapacity. Contrasting with this, the MEG, PET and Polyester businesses in North America performed well as underlying fundamentals remained strong while European businesses were slightly weaker due to the prolonged economic crisis. North America represents around 40% of IVL’s US$ 5.1billion in consolidated sales for the nine months ending Q3 2012.
“IVL has continued to move forward with our business plans. We expect the industry to start picking up again in 2013 and we want to remain a highly competitive and low-cost leader, focused on returns for our shareholders” said Mr. Aloke Lohia, Group CEO of Indorama Ventures. “We have acquired businesses over the past few years that have helped us to consolidate the industry and improve the quality of our earnings. Our management is focused on allocating capital expenditure only on very high return opportunities where we can create attractive returns across cycles.”
The company has approved several such projects including a brown-field PET plant in North America with an annual capacity of 540,000 tonnes for startup in 2015. The European arm of IVL will in Q4 2012 startup its 200,000 tonnes per annum PET plant at Rotterdam followed by a PTA de-bottleneck to 600,000 tonnes per annum at the same site by 2015. The company will also de-bottleneck its Polish site to take advantage of this growth market and its virtual integration with third party PTA. On the polyester fiber front, IVL’s plant with annual capacity of 300,000 tonnes is due to startup in 2013 in Indonesia, the highest growth region in ASEAN.
“Our strategic initiatives are targeted to continuously improve shareholders returns across cycles while maintaining our global leadership in the Polyester value chain. We have seen clear evidence of our strategy delivering value even in the trough cycle that we are in at present” said Mr. Lohia
About Indorama Ventures
Indorama Ventures Public Company Limited, listed in Thailand (Bloomberg ticker IVL.TB) is the world's leading producer in the polyester value chain, with a global footprint and manufacturing across Africa, Asia, Europe and North America. Its products serve major players in consumer staples. The company's main products are PTA, PET, Polyester fibers and yarns and Ethylene Oxide/Glycols, which are distributed across the world. IVL has 9,000 employees worldwide and 9 months consolidated revenue of US$ 5.1 billion as of Q3 2012.
Original source: http://ivl.listedcompany.com/news.html/id/325594/group/newsroom_press
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