Net profit of IVL up for H1; future remains clear
Indorama Ventures Public Company Limited, the world's leading vertically integrated Polyester Value Chain producer, has seen revenues and profits in the first 6 months of 2011 rise strongly over the first 6 months of 2010 due to global demand for all business lines continuing to grow. Sales revenue for the first six months climbed 105% to US$ 3,019 million from US$ 1,469 million in the same period last year.
Sales in Q2/2011 grew to US$ 1,692 million, outstripping the US$ 1,328 million achieved in Q1/2011 by 27% and far outperforming the US$ 737 million in Q2/2010 by 130% due to the extra capacity from acquisitions in 2011 and a corresponding rise in sales.
"Our presence in Europe and North America has benefited the business in contrast to what the market was telling us," said Mr. Aloke Lohia, Group CEO of Indorama Ventures PCL. "The current economic slow down in the West did not impact sales and spreads because our business is part of the non-discretionary economy. With greater consolidation of both markets today, we are seeing less volatility and better spreads. We have also enjoyed the advantages of market leadership and increased customer access with our global brands."
The Core EBITDA, that is, excluding inventory gains and losses, was US$ 339 million in 6M/2011, higher than the US$ 176 million made in 6M/2010, a growth of 93%. The Core EBITDA, was US$ 181 million in Q2/2011, higher than the US$ 157 million made in Q1/2011 and much higher than the US$ 94 million made in Q2/2010. The Q2/2011 Core EBITDA increased due to higher volumes but slightly lower margins. The Company's increase in year-on-year performance for the second quarter was a result of the continued corporate growth strategy, with strategic acquisitions in Europe and North America providing stronger margins and the addition of high value added specialty products from acquisition of assets.
Reported Net Profit, including extraordinary items, rose to US$441 million, up 306% over the US$109 million seen in the first 6 months of 2010, while Core Net Profit for the first six months of this year was US$ 238 million, 160% higher than the US$ 91 million achieved in 6M/2010. At the same time our Core profit before tax and minorities excludes extraordinary gains made from negative goodwill and inventory gain/loss of US$ 234 million and US$ 108 million in H1/2011 and H1/2010 respectively. In Q2, 2011, Core Profit before tax and minorities was US$ 122 million, which is 107% above the US$ 59 million made in Q2, 2010 and 10% above the US$ 111 million made in Q1, 2011.
Mr. Lohia said, "We have benefited from our geographical diversification as Western spreads outperformed Asian spreads and the market rationalization achieved over the past few years, in which IVL was one of the leading industry consolidators. In addition, IVL is closely linked to consumer staples and affordable products as PET are much lower in cost than glass and aluminium while Polyester Fibres and Yarns are more affordable compared to cotton. In line with the affordable nature of our products and their application in daily consumer staples, all the business segments of IVL have seen resilient demand in all parts of the world."
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Indorama Ventures Public Company Limited