Trading Statements

Q3 2014 Trading Statement

INEOS Group Holdings SA October 22nd 2014

INEOS Group Holdings S.A. (‘IGH’ or ‘INEOS’) announces its trading performance for the third quarter of 2014.

Based on unaudited management information INEOS reports that EBITDA for the third quarter of 2014 was €535 million, compared to €410 million for Q3, 2013 and €447 million for Q2, 2014.

North American markets have continued to be strong, taking full benefit from their current feedstock advantage.  Market conditions in Europe have been relatively stable in the quarter. In contrast, markets in Asia have generally remained soft.

O&P North America reported EBITDA of €304 million, a record performance, compared to €241 million in Q3, 2013. The business has continued to benefit from its flexibility to be able to utilise cheaper NGL feedstocks to maintain healthy margins.  The US cracker business environment was strong with top of cycle margins and high operating rates throughout the quarter.  Polymer demand was very solid, with tight markets and high margins, particularly in polyethylene. A number of unplanned competitor plant outages have placed additional pressure on the market.

Chemical Intermediates reported EBITDA of €171 million compared to €152 million in Q3, 2013.  Chemical Intermediates experienced an improved performance across most of the businesses in the quarter. The overall demand trend in the Oligomers business was strong in most sectors, with robust demand in the polyethylene co-monomer and drilling segments. There was a scheduled turnaround at the Joffre site during the quarter and the results were adversely impacted by a small fire at the Feluy site. The Oxide business had a stable performance for the quarter with satisfactory EO demand.  Supply side restrictions due to a number of competitor turnarounds and raw material shortages in the US, have improved the performance of the Phenol business in the quarter. The Gladbeck plant had a scheduled turnaround in the quarter. The market for the Nitriles business has shown signs of improvement, with stable demand in US and Europe, resulting in solid sales volumes and improved margins. 

O&P Europe reported EBITDA of €60 million compared to €17 million in Q3, 2013.  Demand for olefins in the quarter was balanced, with industry cracker operating rates remaining trimmed. Margins were relatively steady in the quarter, with a solid aromatics performance.  Polymer demand was firm with good seasonal volumes and stable margins in the quarter.  The partial closure of the cracker in Lavera during Q3, 2013 adversely impacted the results for that quarter.  The results for Q3, 2013 were also adversely impacted by the poor performance at O&P UK.  The Group disposed of the O&P UK business on October 1, 2013 and the O&P South business on July 1, 2014.

The Group has continued to focus on cash management and liquidity.  Net debt was approximately €6.3 billion at the end of September 2014.  US dollar denominated debt was impacted in part by the recent appreciation of the dollar against the Euro. Cash balances at the end of the quarter were €1,343 million, and availability under undrawn working capital facilities was €285 million. Net debt leverage was approximately 3.7 times as at the end of September 2014.