Indorama Ventures Plc (IVL), a global chemical producer, announced a strong first-quarter result of US$650 million for its core earnings before interest, taxes, depreciation and amortisation (Ebitda), an increase of 77% year-on-year.
The firm also reported consolidated revenue of $4.4 billion, a 37% increase year-on-year. Its earnings per share was 2.47 baht and net profit logged 14 billion baht.
"Our integrated product portfolio continues to play a crucial role in consumers' daily lives, serving end applications focused on elevating safety and well-being. This is the cornerstone of IVL's resiliency and has allowed the company to successfully weather volatility and uncertainty," said D.K. Agarwal, chief executive of IVL.
"Our strong focus on transforming our processes is continuing to yield efficiency gains and drive increased productivity."
All three of IVL's business segments grew as the company's global position benefited the overall environment.
IVL's Integrated Oxides and Derivatives (IOD) business benefits from a high crude oil price environment, as its shale gas advantage supports methyl tertiary butyl ether and monoethylene glycol (MEG) margins.
The IOD segment achieved a core Ebitda of $126 million, up 258% year-on-year. The integration of the Oxiteno acquisition, completed in April, is set to bring additional upside to IOD from the second quarter, said the firm.
Meanwhile, as ocean freight rates increase, IVL's polyethylene terephthalate (PET) and fibres segments gained due to higher import parity pricing in Western markets, where about two-thirds of its portfolio is situated.
Management's agile response to hedging and levying surcharges has helped to partially recuperate the surge in energy and utility costs in Europe due to the Russia-Ukraine conflict, said IVL.
The combined PET segment reported core Ebitda of $435 million, a surge of 63% year-on-year, supported by the reset of PTA/PET contracts at the end of 2021. IVL expects the tight supply-demand environment to continue through 2022, boosted by the upcoming peak summer season.
The fibres segment delivered core Ebitda of $85 million, an increase of 17% year-on-year. Demand across the three fibres verticals is stable with domestic sales yielding better profitability, while higher freight rates weighed on margins on export volumes from Thailand, Indonesia and India, and higher energy and utility costs impacted European operations.
However, China's ongoing pandemic lockdowns affected downstream polyester demand, resulting in weakened MEG spreads.
IVL's businesses trade in US dollars, and a strengthening dollar has a positive impact, reducing conversion costs in emerging economies.