24 October 2011 13:51 [Source: ICIS news]
LONDON (ICIS)--INEOS’s third-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) fell 20% year on year to €371m ($515m), partly because of a softening in demand from the weakening economy, the Swiss-headquartered company said on Monday.
INEOS also noted that results represented EBITDA for its chemicals businesses after the recent disposal of its European refining business.
In July this year, Chinese state-owned PetroChina completed its $1bn purchase of a 50% stake in UK-based INEOS’s European refining operations, which included the group’s refineries in Grangemouth, Scotland, and Lavera, France.
“Global economic and political turbulence has created hesitancy in many markets, leading to a softening in demand in a number of sectors towards the end of the third quarter,” INEOS added.
Compared with €576m reported in the second quarter of 2011, the company’s EBITDA fell by 36%.
The group’s chemical intermediates segment reported EBITDA of €165m in the third quarter, down 34% year on year. It said demand for phenol and acetone has been solid in a structurally tight market, while demand for oligomers remained good across most sectors, particularly for speciality grades.
“The oxide business continued to benefit from solid demand for both MEG [monoethylene glycol] and its derivative products. Acrylonitrile demand has been affected primarily by the weakness in ABS [acrylonitrile-butadiene-styrene], particularly in ?xml:namespace>
Its Olefins & Polymers Europe business reported EBITDA of €80m, compared with €95m in the third-quarter of 2010. INEOS said that demand for olefins in the quarter continued to be strong, resulting in high cracker utilisation rates.
“Cracker margins have remained at high levels, although butadiene [BD] prices have eased in the quarter. Polyolefins margins have remained relatively weak in the quarter, as demand continues to be soft,” it added.
INEOS Olefins & Polymers USA reported third-quarter EBITDA of €126m, compared with €118m in the same period last year, as demand for polymers in the period was sluggish, with weak domestic demand and little export opportunity, it said.
“Demand for olefins remained good, resulting in high utilisation rates. Margins have also been supported by a number of turnarounds in the industry tightening the supply side during the quarter,” the company added.
The group said it will continue to focus on cash management and liquidity.
($1 = €0.72)
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