Thailand’s Indorama Q2 earnings almost double on higher sales, improved margins

MADRID (ICIS)–Indorama Ventures Limited (IVL)’s second-quarter sales and earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose sharply, year on year, on the back of strong sales volumes and improved profit margins, the Thai chemicals major said on Wednesday.

Net profit, which the company reports in its home currency, more than doubled during the quarter to baht (Bt) 20.3bn ($571m).

IVL (in millions)	Q2 2022	Q2 2021	Change
Sales	$5,451	$3,559	53%
EBITDA	$1,010	$552	83%
Net profit	Bt20,300	Bt8,340	143%

KEY POINTS
IVL said it had managed to offset high energy prices in Europe and the US thanks to the “combination of strong sales and improved margins”.

By division, the company said its largest unit producing polyethylene terephthalate (PET) and derivatives had posted 35% higher earnings during Q2, year on year, though they fell by 1% quarter on quarter.

“[The division, called Combined PET] delivered strong EBITDA … on high margins driven by seasonally strong demand, supply chain constraints and overall market tightness,” said IVL.

IVL’s Integrated Oxides and Derivatives (IOD) division also posted higher earnings, both year on year and quarter on quarter.

“[Within IOD] The Integrated Intermediates vertical was hindered by low ethylene crack margins, historically low integrated MEG [monoethylene glycol] margins, and the planned turnaround of two EO [ethylene oxide] units,” the company said.

However, sales and earnings fell year on year and quarter on quarter in the Fibers division as it took a hit from China’s lockdowns to contain the pandemic as well as disruption in Russia.

“The segment was impacted by lower demand in the Lifestyle vertical amid the China lockdown while higher freight rates restricted exports,” it sad.

“The Hygiene vertical was impacted by volumes at Avgol’s Russia site along with increased polypropylene [PP] prices, while strength in the replacement tyres market partially offset the ongoing semiconductor shortage, resulting in a stable performance for Mobility.”

($1 = Bt35.57)

Front page picture: An Indorama logo display at its headquarters in Bangkok, Thailand
Source: Sakchai Lalit/AP/Shutterstock