3Q22 Performance Highlights
- 3Q22 Revenue of US$ 4.9 billion, an increase of 27% YoY and a decline of 10% QoQ
- 3Q22 Core EBITDA of US$ 606 million, an increase of 39% YoY and decline of 20% QoQ
- Last twelve months (LTM) 3Q22 Core EBITDA of US$ 2,476 million, an increase of 60% YoY
- Core EBITDA per ton of US$ 163 in LTM3Q22 and US$159 in 3Q22
- Operating cash flow of US$ 1,952 in LTM3Q22, an increase of 59% YoY
- 3Q22 Core Net Profit of THB 10.34 billion (LTM3Q22: THB39.62 billion) and Reported Net Profit of THB 8.14 billion
- Strengthened balance sheet QoQ contributed by strength in US dollar leading to THB translation gains as well as strong liquidity of US$ 2.60 billion in the form of cash and cash under management plus unutilized banking lines
Bangkok-based chemical industry powerhouse Indorama Ventures Pcl. (SET: IVL) reported on Thursday a better-than-expected 3Q22 earnings, thanks to strength in US dollar, while maintaining constant demand and volumes throughout the year.
In 3Q22, IVL achieved a net profit of THB8,137 million, up 24.27% from the same period last year, while core EBITDA was at US$ 606 million, an increase of 39% YoY and decline of 20% QoQ.
In its financial statements for the third quarter ended September, IVL stated that the year 2022 has been shaped by a number of unprecedented macroeconomic factors. In the last 18 months, the company has seen very strong movements of Brent crude oil, strengthening of the US dollar, hyperinflation and supply chain disruptions, all peaking in 2Q22.
As a result, IVL had an exceptionally strong second quarter which has started normalizing in 3Q22. The Ukraine crisis brought more upheaval in the form of volatile energy prices, predominantly in Europe, while China’s zero-COVID policy resulted in dramatically reduced consumption that impacted markets globally.
The revenue in the US dollar term was at US$ 4.9 billion, an increase of 27% YoY and a decline of 10% QoQ. Strengthened balance sheet QoQ contributed by strength in dollar leading to THB translation gains as well as strong liquidity of US$ 2.60 billion in the form of cash and cash under management plus unutilized banking lines.
Prior to the announcement, brokerages and analysts anticipated IVL to post a weaker profit in 3Q22 on lower core EBITDA and inventory loss due to lower product spread QoQ, particularly integrated PET margin in Europe, as a result of lower premium to spread in Asian market, and MTBE and MEG product spread in the US on the back of lower demand.
In 4Q22, analysts expect IVL’s profit to rise further QoQ without suffering a severe drop in inventories.