Indorama Q1 net profit down 12.6% to Bt444m, sales up 11%

12 May 2014 14:00 Source:ICIS News

LONDON (ICIS)--Indorama Ventures’ Q1 net profit fell 12.6% year on year to Thai baht (Bt) 444m ($13.6m), on the back of lower prices in polyester products and polyethylene terephthalate (PET), but sales rose 11% on higher volumes to Bt61.6bn, the Thai chemical major said on Monday.

The fall in net profit did not stop core earnings before interest, taxes, depreciation and amortisation (EBITDA) from jumping 83% to Bt5.1bn, the company said.

However, basic earnings per share decreased 20% from Bt0.10 to Bt0.08.

“Sales growth through higher volumes was achieved [in the first quarter of 2014], although rapidly falling feedstock prices led to the weaker absolute prices of the commodity PET and polyester products,” said Indorama.

The company’s feedstock segment saw core EBITDA at $55m, up from $36m, on the back of improved production volumes of ethylene oxide (EO) and ethylene glycol (EG), as well as strong sales of purified ethylene oxide (PEO).

However, the company said its purified terephthalic acid (PTA) segment had not performed as well, because the Asian market remains “subdued”.

“Despite Asian PTA overcapacity, the company is optimistic that there will be gradual margin improvement in 2014 as industry rationalization has commenced and more producer discipline is expected,” said Indorama.

The company’s high value added (HVA) products saw core EBITDA at $56m, up 63% compared to the first quarter of 2013, while its commodities business in Asia registered core EBITDA at $25m, up 86%.

Indorama said it expects its PET business in Nigeria to continue delivering higher volumes of resins, and hopes its entry in Ghana will improve volumes further, as will do a new packaging facility in the Philippines, it said.

($1 = Bt32.6)

By Jonathan Lopez