The company has delivered another outstanding set of financial and operating metrics, underpinned by improvement in production volumes and margins across all segments and geographies. EBITDA was $344 million, an increase of 34% YoY, which is reflective of underlying strength in all segments and structural improvement in the polyester value chain. The star performer in the first quarter was PET, which grew its EBITDA by 64%, while Feedstock EBITDA grew 23% and Fiber EBITDA grew 10%.
First quarter production volume increased by 6% YoY to 2.3 million tons, mainly as a result of organic volume growth, operational excellence projects and higher operating rates as well as the successful integration of the HVA acquisitions announced in 2017.
There was a strong improvement in North America and in EMEA. Asia is also on the path to recovery. However, current earnings from Asia, although improving, are not fully reflective of the fundamental improvements underway in the industry. Strong polyester demand growth, China’s ban of waste plastics and improved supply discipline are contributing to Asian earnings, which are expected to gain momentum in the forthcoming quarters.
The global outlook continues to be positive, backed by improving Asian sentiment led by robust demand growth and a favorable demand-supply balance leading to a cyclical upturn of the polyester value chain. Demand for PET continues to grow at around 6%.
In a strategic move to enhance earnings potential and add long-term value to the business in the Americas, the company has announced the acquisition of a 550,000 tons/annum PET facility in Brazil, and a joint investment in a 2.4 million ton PTA-PET project at Corpus Christi in the U.S.
Aloke Lohia, group CEO of Indorama Ventures, says, “We have started the year with an outstanding performance and an all-time high financial and operational result. This performance reflects the robustness of our strategy, but diversified across the value chain and geographically, the dedication of our employees and the desire to create sustainable growth in value for all our stakeholders. The strength of our balance sheet, predictable cash flows and accretive growth avenue gives me the confidence that we will achieve our stated target of 45% EBITDA growth in 2019 over 2017.”