Trading Statements

Trading Statement Q3 2019 - INEOS Styrolution Holding Limited


INEOS Styrolution Holding Limited (‘INEOS Styrolution’) reports its trading performance for the third quarter of 2019.

Based on unaudited management information, INEOS Styrolution’s EBITDA before Special Items (‘EBITDA’) for the third quarter of 2019 is €163 million. This compares to an EBITDA of €229 million in Q3-2018 and to an EBITDA of €220 million in Q2-2019. The third quarter results were positively impacted by non-cash inventory holding gain (COSA) of approximately €4 million (Q3-2018: gain of €12 million) because of the increase in raw material prices in the third quarter of 2019.

Our trading results in Q3-2019 reduced compared to Q2-2019 and Q3-2018. The main reasons are the softer demand from lower global GDP growth and market uncertainty from US trade regulation threats. Sales volumes increased compared to Q3-2018 because of our expanded footprint in Asia.

In the third quarter of 2019, the Polystyrene EBITDA was €43 million (Q3-2018: €39 million). Our sales volumes in Polystyrene did make a step change because of the acquired China polystyrene business as of 1 February 2019. The EBITDA contribution of this transaction in Q3-2019 is €7 million (€28 million year-to-date). Underlying demand and EBITDA was impacted by reduced GDP growth.

The ABS Standard EBITDA in the third quarter of 2019 was €16 million (Q3-2018: €32 million). An uncertain market environment from US trade regulation policies and weaker China growth reduced the ABS demand. Arbitrage from Asia products affected the business in both Americas and EMEA region. As a result, margins and EBITDA reduced.

The Specialties business EBITDA was €51 million in the third quarter of 2019 (Q3-2018: €54 million). Sales volumes only slightly reduced despite the aforementioned weaker market environment. The Company has a good geographical and focus industry spread which compensated the market effects. The company reported strong sales increases in its Healthcare and Household focus industries. Automotive sales were stable in Europe and the US, but weak in Asia.

Styrene Monomer reported an EBITDA of €53 million in Q3-2019 (Q3-2018: €104 million). Styrene sales reduced as downstream demand softened. Despite some industry outages, the styrene market was long. This resulted in mid-cycle margins in Americas but bottom-of-cycle margins in Europe. All INEOS Styrolution plants were available in the third quarter of 2019.

Net debt was €600 million at the end of September 2019 with cash balances at €289 million. The company had an additional availability under the undrawn credit facilities of €326 million. Net debt to LTM EBITDA leverage was 0.8 times.