Indorama Ventures Public Company Limited (IVL), a global leader in sustainable chemicals and fibres production, has shown its resilience with a slight improvement in quarterly earnings amidst ongoing operational challenges in the second quarter of 2023.

Summary:

- Revenue decline: Revenues dipped by 1% sequentially, resulting in a 27% year-on-year decrease, totalling US$4 billion.

- EBITDA recovery: Encouragingly, reported EBITDA rebounded to US$321 million, marking a robust 7% increase quarter-on-quarter, though a significant 68% drop compared to the previous year.

- Cash flow optimism: Operating cash flows were positive at US$491 million.

- Strong financial structure: Net Operating Debt to Equity ratio remained prudent at 0.95x.

- Earnings per Share: Notably, reported EPS was THB 0.04.

IVL's strategic acumen and commitment to competitiveness have played a vital role in sustaining its business in a challenging environment. Despite headwinds, Q2's Reported EBITDA demonstrated resilience, rising by 7% sequentially and partially offsetting the substantial 68% year-on-year decline.

In a global chemicals context affected by destocking due to China's export expansion and weakened domestic demand, IVL not only navigated through difficulties but also unveiled plans to bolster finances and enhance competitive advantage.

The management aims to conserve cash and strengthen market position by trimming working capital and curtailing capital expenditures. This approach aligns with IVL's focus on optimising European manufacturing.

In the era of digital transformation, IVL leads with Project Olympus, a robust digitalisation initiative, alongside organisational enhancements, showcasing the company's dedication to innovation and operational excellence.

As the fiscal year progresses, a revival in volumes across all three business segments is expected. Supported by management strategies and an improving industry outlook, IVL is set to leverage its strengths.

In the flagship segment, Combined PET, Reported EBITDA surged by 37% quarter-over-quarter as markets stabilise. Sales volumes are poised to rise with improved manufacturing in Europe and expansion in India.

In the Fibers segment, reported EBITDA was $20 million, a 37% decrease quarter-on-quarter due to margin erosion and subdued demand. Optimisation of European manufacturing and expansion initiatives in the United States and India are anticipated to revive the segment.

The Integrated Oxides and Derivatives (IOD) segment's QoQ Reported EBITDA declined by 27% due to destocking in the Crop Solutions market. However, gradual destocking reduction across downstream offerings is expected.

Mr. DK Agarwal, Deputy Group CEO of IVL, is confident in the company's prospects, highlighting crisis-driven innovation. IVL's vision is to optimize operations, elevate customer engagement, and achieve mid-cycle returns by 2024. Balancing sustainability and fiscal prudence, IVL remains committed to sustainable investments while adjusting capital allocations. As Mr. Agarwal acknowledges 'Team IVL' as growth architects, the company's dedication to its vision remains unwavering, promising a resilient future.

www.indoramaventures.com