Trading Statement Q1 2023 - INEOS Quattro Holdings Limited
INEOS Quattro Holdings Limited (‘INEOS Quattro’ or the ‘Group’) announces its trading performance for the first quarter of 2023.
Based on unaudited management information, INEOS Quattro reports that EBITDA for the first quarter of 2023 was €381 million, compared to a record €887 million for Q1, 2022 and €455 million for Q4, 2022. LTM March 2023 EBITDA was €2,067 million.
Styrolution reported EBITDA of €65 million compared to €254 million in Q1, 2022. Polymer market conditions were soft due to general economic uncertainty and customers postponing orders. Demand for durables reduced compared to the top of cycle conditions seen in 2021 and the first half of 2022. Styrene monomer sales reduced as a result of weak downstream demand. Market margins were soft in most regions and product groups due to low industry utilisation.
INOVYN reported EBITDA of €263 million compared to €321 million in Q1, 2022. The decrease in EBITDA was mainly the result of lower volumes of both general purpose PVC and caustic soda, with PVC margin reductions partially offset by higher caustic soda pricing and lower energy costs. Subdued demand for general purpose PVC in European markets in Q1, 2023 was exacerbated by high volumes of imports from China, in particular. Global PVC export prices were significantly lower than Q1, 2022 with reduced domestic demand in Asia and the US forcing low cost producers from these regions into export markets. Caustic soda contract prices decreased compared to Q4, 2022 on the back of increased competition from imports and improved downstream demand for chlorine, but were still significantly higher than Q1, 2022. Specialty PVC margins and volumes in domestic and export markets were also lower than Q1, 2022. European energy markets have stabilised with electricity prices consistently trading at lower levels than the prior year, although prices are still high compared with 2021 and prior.
Acetyls reported EBITDA of €27 million compared to €135 million in Q1, 2022. Europe with its high energy costs remained the high-cost region with ample competitor tonnes being imported from the US, the Middle East and China. A lengthening market in the US maintained downward pressure on the domestic Acid price. In Asia, the markets remained subdued post Covid and the Lunar New Year. Markets were long with high operating rates and soft local demand, which lead to exports to all global regions.
Aromatics reported EBITDA of €26 million compared to €177 million in Q1, 2022. Sales volumes were significantly lower in all regions in Q1, 2023 compared to the same quarter last year as softer demand conditions persisted. Global PTA sales increased modestly compared to Q4, 2022 although fell marginally in Europe despite energy and raw material prices showing signs of normalising relative to other regions. Unit margins in Q1, 2023 were lower than in the same period of 2022 and the preceding quarter driven by the weaker global trading environment.
Net debt was approximately €5,058 million at March 31, 2023. Cash balances at the end of the quarter were €2,106 million. In March 2023 the Group issued new Senior Secured Term Loans of approximately €0.8 billion. There was availability under undrawn securitization facilities of €840 million. Net debt leverage was approximately 2.4 times EBITDA at the end of March 2023.