Indorama Ventures Plc (IVL), a global sustainable chemical producer, announced adjusted earnings before interest, taxes, depreciation, and amortization of $366 million in Q1. This figure represents a 32% increase from the previous quarter yet a 2% dip year-on-year.
During this period, sales volume surged by 3% compared to the prior quarter, indicating signs of recovery across all sectors, although a US winter freeze partially counteracted this upturn. The positive results were facilitated by reduced utilities costs in Europe, supply chain disruptions around the Red Sea that favored the company’s import parity, and advantageous shale gas economics boosting profitability in the US.
IVL anticipates ongoing volume recovery in 2024, albeit at a gradual pace as inventory rebalances and summer demand picks up.
Despite this progress, the global chemical industry confronts challenges stemming from excess capacity expansions and enduring inflationary pressures alongside high interest rates, which continue to impact industry profitability within the polyester value chain.
Aloke Lohia, the group’s chief executive, highlighted this quarter’s performance as a turning point for the company. The focus is now on the IVL 2.0 plan, symbolizing a significant shift in the business strategy.
Under the 2.0 strategy, Indorama Ventures is optimizing seven sites, including a reevaluation of its PTA/PET operations in the Netherlands. Noteworthy strides have been made in refinancing $1.1 billion of debt by mid-2024 to ensure financial stability.
Capital raising efforts included a diverse range of financing options such as the “Ninja” loan worth $255 million, a 10-billion-baht debenture, a $100 million bilateral loan, and a successful $500 million syndicated loan closed at reduced spreads compared to previous issuances.
To enhance value, Indorama Ventures is preparing its packaging and surfactants divisions for initial public offerings.
Mr. Lohia stressed the management’s commitment to cost control, competitiveness optimization, and maintaining healthy liquidity levels.
IVL’s global reach acts as a competitive edge in the current low-margin landscape, enabling the company to uphold its market standing amidst trade and non-trade obstacles.
