INEOS generates €300m Q4 profit, meets debt covenant

22 January 2009 11:06  [Source: ICIS news]

The INEOS refinery at Grangemouth, ScotlandLONDON (ICIS news)--INEOS generated profits of €300m ($390m) in the fourth quarter and €1.6bn for the full year putting it in compliance with its year-end leverage covenants, the company said late on Wednesday.

Full year replacement cost earnings before interest, tax, depreciation and amortisation (RC EBITDA), were adjusted to exclude the impact of exceptional charges of €181m, largely due to the strike at the company’s refinery at Grangemouth in Scotland.

INEOS reported significantly higher than expected inventory holding losses for the fourth quarter 2008 of €1,005m reflecting, it said, the significant decline in oil prices over the quarter. In November, the company had estimated this charge to be €560m based on an oil price of $60/bbl.

The company made inventory holding gains in the first nine months of the year as the oil price rose. Its full year inventory holding losses were €845m.

Net debt at the year end was €7.5bn, INEOS said, putting its RC EBITDA to net debt leverage ratio at 4.6 times which was in compliance with the year-end leverage convenant of 5.25 times.

INEOS re-negotiated this and other debt covenants with is principal lenders in December gaining waivers until the end of the first quarter 2009 on certain of its obligations.

INEOS said its cash balances were €650m at the year-end following a schedule loan amortisation payment in December of €125m.

The group which is widely seen as particularly vulnerable in the teeth of the downturn and the credit crunch said it has undrawn revolving credit facilities of €200m. It had made payments under a securitisation facility of €360m during the fourth quarter.

($1 = €0.77)

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By: Nigel Davis
+44 20 8652 3214



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