Indorama Ventures Reports 2016 EPS of THB 3.15, Growth of 172% Delivers Record Earnings, Consolidates it Global Leadership

Stocks and Financial Services Press Releases Tuesday February 21, 2017 09:08
Bangkok--21 Feb--Indorama Ventures

2016 Net Profit after Tax and NCI of THB 16.2 billion, up 145% year-on-year Production increased sharply by 24% to 8.7 million tonnes, making it the world's largest PET and Fibers Company Achieved highest ever EBITDA of THB 27.3 billion, despite a very weak operating environment Declared an annual dividend of THB 0.66 per share, an increase of 38% over 2015.

Indorama Ventures Public Company Limited (IVL), a global chemical producer, today announced its fourth quarter and full year results for 2016.

For the full year, the Company reported a significant increase in its Net profit (after tax and non-controlling interests) of Baht 16.2 billion, an increase of 145% year-on-year (YoY). Core EBITDA has grown by 25% to which each of the business segments contributed. Core EBITDA for the PET segment grew at 19%, the Fibers segment increased by 8% while the Feedstock segment grew by 42%. Production volumes increased sharply by 24% to 8.7 million tonnes following the completion of two major acquisitions in April 2016 in relatively higher margin markets of USA and Europe. These acquisitions in USA and Spain were aimed mainly at enhancing value addition and hedging the value chain by increasing feedstock integration while improving the overall financial performance of the Company. All of this was achieved in what was otherwise a benign business environment, especially in Asia with the overall necessities industry being impacted by excess capacity, low operating rates and the resultant lowest margins seen in the last 5 years.

For the fourth quarter, the Company achieved an EBITDA of THB 7.25 billion, an increase of 43% compared to 4Q15. This was achieved as a result of higher volumes following the acquisitions made in 2016 and a higher overall operating rate of 86% versus 82% in 4Q15. The existing businesses, excluding the above two mentioned acquisitions, also delivered superior performance reflecting the impact of ongoing operating excellence projects undertaken by the Company in 2016. Production was higher, despite a flat operating rate reflecting the full-year impact of sites acquired in 2015. Returns on Capital Employed also improved to 10.4% reflecting better capital efficiency and higher earnings.

Mr. Aloke Lohia, Group CEO of IVL said, "Despite headwinds from a very challenging and low margin business environment, 2016 was a very satisfying year where we achieved our strategic and operational objectives while strengthening the balance sheet. The higher-volume PET and Feedstocks business delivered superior results. The High Value-added portfolio delivered nearly 50% of our EBITDA although it only contributes to 35% of our sales. Given its global scale, IVL is uniquely positioned to benefit as the demand-supply balance improves and the industry undergoes further consolidation going forward. This momentum of creating value add will provide significant growth opportunities and enhance our ability to deliver top and bottom line growth, as well as margin expansion."

The Company completed two acquisitions in 2016 and have several ongoing growth projects. The 440 KTA dual-feed, gas-based ethylene cracker purchased in Louisiana, USA, is undergoing renovation and is on target for completion by the end of 2017, offering 2018 as the first full year of earnings. The PTA expansion in Rotterdam, the Netherlands, expected to come online in mid-2017 which will help the Company double its PTA capacity to 700 KTA thereby enabling full captive consumption for its PET facilities in EMEA. The Company also announced the expansion of its HVA Performance Fibers tire-cord facility in China, as well as the expansion of its fiber capacity in Indonesia. The IPA facility in Spain is being prepared to double its production to 250 KTA.

"We have increased our capacity in the USA to 3.5 million tonnes, doubling over 2015. Another 500,000 tonnes of cracker capacity is due to start up in 2017 which will bring capacity to 4 million tonnes. IVL is now the only producer in EMEA of the HVA chemical Isophthalic Acid, an important precursor in PET, paints and coatings. We expect full year gains and synergy gains from these completed acquisitions and organic projects which take our total capacity to 12 million tonnes in 2017.

Over the years, we have successfully transformed the Company to be truly world-class and global scale with presence across virtually all major consumption markets globally.

Apart from excellence in operations, we also embrace sustainability measures into our business model. IVL recently received global distinction in sustainability performance and has been recognized as one of the top-scoring companies in the Chemical Industry globally by DJSI and the FTSE4Good Index. These recognitions reflect the effort and passion all of our people have put into making IVL as a company with a truly sustainable future," Mr. Lohia concluded.

IVL's Board of Directors has declared an annual dividend of THB 0.66 per share for 2016, an increase of 38% over 2015.

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