Trading Statements

Trading Statement Q1 2024 - INEOS Quattro Holdings Limited

INEOS Quattro Holdings Limited (‘INEOS Quattro’ or the ‘Group’) announces its trading performance for the first quarter of 2024.

Based on unaudited management information, INEOS Quattro reports that EBITDA for the first quarter of 2024 was €260 million, compared to €381 million for Q1, 2023 and €149 million for Q4, 2023.

Signs of market improvement were visible during the first quarter of 2024. Improved demand in the US and European markets drove sales volumes up whilst margins remained subdued. In response to the challenging market conditions the Group has implemented a number of measures to conserve cash during this period, including policies to control all discretionary fixed costs across the businesses and a review of all capital projects to defer or reduce discretionary expenditure and scheduled turnarounds where it is safe to do so.

Styrolution reported EBITDA of €100 million compared to €65 million in Q1, 2023. Polymer market demand improved from restocking effects mainly in the Americas and in Europe. Arbitrage from Asia into the Americas and Europe was reduced due to supply chain interruptions and higher freight costs. This led to improved polymer margins in the Americas and Europe and bottom of cycle margins in Asia. In addition, there was strong demand and margins in Styrene due to outages in the North American market.

INOVYN reported EBITDA of €76 million compared to €263 million in Q1, 2023. The decrease in EBITDA was mainly the result of lower caustic soda pricing and general purpose PVC margin reductions, partially offset by lower energy costs. Underlying demand for general purpose PVC in Europe remained weak against a backdrop of low construction activity, although operating rates for European producers improved in Q1, 2024, supported by lower imports. Specialty PVC markets were subdued with margins achieved lower than Q1, 2023. Caustic soda demand in Europe remained weak, but industry operating rates in Europe pushed higher in Q1, 2024 due to stronger downstream chlorine usage, putting further pressure on caustic soda pricing. The Q1, 2024 caustic soda contract prices and margins therefore saw a significant decrease compared to the comparative quarter. European electricity and gas markets traded at lower levels than Q1, 2023, although prices are still high compared with 2021 and prior.

Acetyls reported EBITDA of €45 million compared to €27 million in Q1, 2023. Volume and margin improvement in Europe and the US underpinned the increase in EBITDA. Asian operating rates remained strong, but a well-supplied Chinese market weighed heavily on domestic margins which remained subdued. Prices and margins in North and South East Asia were impacted by low margin tonnes from China across the quarter.  

Aromatics reported EBITDA of €39 million compared to €26 million in Q1, 2023. Sales in the first quarter were at their highest level since Q3, 2022. Whilst there was some evidence of downstream restocking, Europe benefitted the most from the increase in cost and the reduction in availability of imported material relative to domestic production. Global revenues for the quarter were higher compared to same period last year driven by higher sales volume. Increases in raw material prices across the quarter resulted in non-cash inventory holding gains of €20m in Q1 2024.

Net debt was approximately €5,674 million as at March 31, 2024. Cash balances at the end of the quarter were €1,853 million. There was availability under undrawn securitization facilities of €604 million. Net debt leverage was approximately 7.2 times EBITDA at the end of March 2024. INEOS Quattro is continuing to evaluate different financing alternatives and monitor market conditions in accordance with our financial strategy, including with respect to potential refinancings or extensions of its upcoming debt maturities in the global leveraged loan and high yield bond markets.