Trading Statements

INEOS Quattro Holdings Limited (‘INEOS Quattro’ or the ‘Group’) announces its trading performance for the fourth quarter of 2023.

Based on unaudited management information, INEOS Quattro reports that EBITDA for the fourth quarter of 2023 was €149 million, compared to €455 million for Q4, 2022 and €166 million for Q3, 2023. Full year EBITDA was €909 million compared to €2,572 million for 2022.

Market sentiment during the quarter has continued to be impacted by elevated inflation rates and high energy costs, particularly in Europe. 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. Nevertheless, there have been some signs of market improvements during the first quarter of 2024.

Styrolution reported EBITDA of €43 million compared to €132 million in Q4, 2022. Full year EBITDA was €200 million compared to €749 million for 2022. Polymer market demand and margins were soft due to general economic uncertainty, weak durable demand and customers postponing orders. This was prevalent in all regions and most industry sectors. Inflation and high interest rates weakened overall market sentiment after top of cycle conditions in the first half of 2022. Styrene monomer demand reduced in line with weaker polymer demand. EBITDA for Q4, 2022 included a one-off license revenue of €68 million for the sale of intellectual property to the newly created joint venture with Sinopec. The fourth quarter result included a non-cash inventory holding gain of approximately €7 million due to an increase in raw material prices in the beginning of the fourth quarter compared to a loss of €59 million in Q4, 2022.

INOVYN reported EBITDA of €85 million compared to €328 million in Q4, 2022. Full year EBITDA was €589 million compared to €1,176 million for 2022. The results in the quarter were impacted by general purpose and specialty PVC margin reductions and lower caustic soda pricing, partially offset by lower electricity and gas costs. Our portfolio of assets continued to be run at low operating rates during the quarter. Weak demand in the domestic European market for general purpose PVC, combined with ample supply of competitively priced imports led to a further erosion in spreads over ethylene. Export general purpose PVC margins deteriorated to bottom-of-cycle levels with reduced domestic demand in China forcing product normally consumed domestically to be sold into export markets at very low prices. Margins on specialty PVC saw further reductions in the quarter due to weak domestic demand and strong competition but remained above historical levels. The Q4, 2023 caustic soda European contract price settled at a 69% reduction compared to Q4, 2022, due to weak demand and ample supply. Sales of excess caustic soda tonnes into export markets reached 15% of total volumes compared to 2% in Q4, 2022. European energy prices were lower than the prior year, albeit at more than double the level of the pre-pandemic period.

Acetyls reported EBITDA of €46 million compared to €35 million in Q4, 2022. Full year EBITDA was €108 million compared to €363 million for 2022. Trading remained challenging in all regions due to weak demand and intense competition. The Chinese economy showed no signs of improvement, with excess capacity weighing heavily on the entire Asian region and steady demand on slim margins. The European acid price increased on tightness caused by US competitor supply issues and margins were supported by a lower gas price on ample supply and mild weather conditions. US demand remained subdued but with reasonable margins on the back of low gas prices, however, the mild weather conditions delayed sales into the de-icer market.

Aromatics reported EBITDA of €(25) million compared to €(40) million in Q4, 2022. Full year EBITDA was €12 million compared to €284 million for 2022. PTA sales volumes improved in the quarter compared to the prior year, largely due to a planned turnaround in 2022 reducing production volumes. Global oversupply and challenging local market conditions kept unit margins below Q4, 2022 levels. However, with the introduction of anti-dumping duties on Chinese PET into Europe, combined with Red Sea logistics issues, market sentiment improved towards the end of the quarter. An uptick in demand ahead of Chinese New Year raised both the China PTA price spread over feedstock and sales back into historical ranges. The fourth quarter result included a non-cash inventory holding loss of approximately €25 million due to falling raw material prices compared to a loss of €52 million in Q4, 2022.

Net debt was approximately €5,500 million at December 31, 2023. Cash balances at the end of the quarter were €1,935 million. There was availability under undrawn securitization facilities of €456 million. Net debt leverage was approximately 6.0 times EBITDA at the end of December 2023. 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.