INEOS' Q4 2010 earnings fall 8.2% to €270m on strike, weather

14 February 2011 18:12  [Source: ICIS news]

LONDON (ICIS)--INEOS' 2010 fourth-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) fell 8.2% to €270m ($365m) on squeezed European cracker margins, a port strike in France and a lightning strike in the US, INEOS said on Monday.

The Switzerland-headquatered company said it made an €82m refinery inventory holding gain in the quarter. The historical cost (HC) earnings were well down on the €402m reported for the third quarter of 2010.

Combined refining replacement cost (RC) EBITDA and chemicals historical cost EBITDA for the fourth quarter were €188m from €267m in the fourth quarter of 2009 and €406m in the third quarter of 2010, INEOS said.

INEOS reports RC/HC EBITDA to measure compliance with its debt covenants.

The port strike at Marseilles in southern France hit refinery and chemicals operations at its Lavera site, INEOS said. The lightning strike was at its olefins complex at Chocolate Bayou in Texas.

The events resulted in lost EBITDA of  about €36m from the Refining and the Olefins & Polymers (O&P) segments in Europe, and €51m from O&P North America, it added. Harsh winter weather in Scotland in the quarter cut earnings by about €28m,

INEOS said its chemical intermediates businesses reported earnings up 29.2% at €186m. The acrylonitrile and phenol markets market had been tight and the oxide business benefitted from strong derivatives demand.

O&P Europe earnings were €5m from €54m in the equivalent period of 2009 although demand for olefins and polymers had been good.

O&P North America earnings were €33m from €68m.

Refining earnings were €46m on an historical cost basis compared with €28m. However, refining margins remained weak in the quarter and on a replacement cost basis the business reported a €36m loss compared with a €1m profit in the fourth quarter of 2009. PetroChina is currently considering a €1bn investment for a 50% share of the INEOS refining business.

Full year 2010 RC/HC EBITDA were €1.56bn from €985m in 2009, the company said. It did not report sales figures for the fourth quarter or the full year.

($1 = €0.74)

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By: Nigel Davis
+44 20 8652 3214

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