Indorama Ventures Public Company Limited (SET: IVL) has has announced 1Q24 consolidated financial statement through the Stock Exchange of Thailand as follows;
| Quarter | 1Q24 | 1Q23 |
| Net Profit (Loss)
Million Baht |
1,133.00 | 1,023.40 |
| Earning Per Share
(Baht) |
0.1700 | 0.1500 |
| % Change | 10.71 | |
1Q24 Performance Summary
- Revenue of US$3.8B, an increase of 6% QoQ and a decline of 5% YoY
- Reported EBITDA of US$366M, an increase of 32% QoQ and a decline of 2% YoY
- Operating cash flows of US$184M,
- Net Operating Debt to Equity of 1.12x
- Reported EPS of THB 0.17
IVL reported a net profit of THB 1,133 million, an increase of 11% compared to the same period last year, and a total revenue of US$3.8 billion.
The company reported sales volume in 1Q24 which grew to 3.55 MMT, reflecting 3% growth QoQ and 2% YoY, Revenue growth of 6% QoQ and -5% YoY. Adjusted EBITDA of US$366M, an increase of 32% QoQ and a decrease of 2% YoY. 1Q24 posted a reported EBITDA of US$367M.
Combined PET with Intermediates Chemicals (carved out from IOD) posted Adjusted EBITDA of US$249M, an increase of 34% QoQ and 4% YoY. Sales volume increased 3% QoQ and 1% YoY as destocking eased. Seasonal demand growth has continued in 2Q24.
Integrated PET posted Adjusted EBITDA of US$125M, an increase of 5% QoQ and a decrease of 23% YoY, driven by improved performance in EMEA due to supply chain disruptions, Anti- Dumping Duties (ADD) on PET imports into the EU from China, higher volumes, and lower energy prices. These were partially offset by the resetting of contracts in the U.S., continued pressure of the Integrated PET benchmark margins in Asia, and high MX/PX feedstock prices in Western markets compared to Asia.
The Packaging business posted stable Adjusted EBITDA of US$21M in 1Q24, a decrease of 4% QoQ and an increase of 1% YoY.
Meanwhile, specialty Chemicals posted Adjusted EBITDA of US$40M, an improvement from the negative Adjusted EBITDA in the last quarter. The improvement in profitability was primarily due to higher volumes, one-time annual gain from campaign production of NDC, and improved performance in high-value-added (HVA) PET. Higher aromatic feedstock costs in the West continue to negatively impact this vertical, especially PIA. An EBITDA improvement plan is taking shape by a dedicated vertical management team to optimize costs and maintain profitability as volumes pick up with enhanced economic activity.
Intermediates Chemicals comprises of IVOL, integrated PEO, integrated EG, and MTBE businesses. The vertical posted Adjusted EBITDA of US$62M in 1Q24, an increase of 38% QoQ and 48% YoY.
Fibers achieved 1Q24 Adjusted EBITDA of US$39M, a 73% increase QoQ and 2% YoY due to a recovery in demand as destocking eased across all three verticals. This was reflected in an 8% QoQ increase in sales volume, and an 18% lift YoY.
Indovinya posted Adjusted EBITDA of US$70M, despite the winter freeze and a mini turnaround at a PO/PG unit which contributed to a 2% decrease in volumes QoQ and impacted EBITDA by US$5M during the quarter.
The positive sentiments for IVL’s business can be summarized as a) volumes have stabilized and marginally improved, signaling an easing of destocking. b) utility costs have lowered in the West improving unit contribution margins. c) Red sea crisis has improved import parity prices in EMEA and South America thereby margins and d) improved shale economics in US have resulted in improved Integrated EO/EG and MTBE profitability. However, persistent inflation and high interest costs lead to muted demand pull and depressed benchmark petrochemical spreads continued to impact the polyester value chain profitability in both integrated PET and Fibers.
The company is continuing to witness positive impact in 2Q24 of the factors mentioned in 1Q24 as well as better volumes as the summer approaches with increased demand for gasoline to support MTBE and beverages consumption globally. Industry benchmark spreads are expected to remain depressed as overcapacity persists, especially for integrated PET. Margins are expected to improve for Indovinya as we launch new products and demand improves for HVA. We continue to focus on driving positive free cash flows from operations and strategic actions. We also have enhanced our governance structure to deliver on our IVL 2.0 evolved strategy by 2026.
