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INEOS Group Holdings S.A. announces its trading performance for the third quarter of 2011

Q3, 2011 Trading Statement 

INEOS Group Holdings S.A. (‘IGH’ or ‘INEOS’) announces its trading performance for the third quarter of 2011. 

Based on unaudited management information INEOS reports that EBITDA for the third quarter of 2011 was €371 million, compared to €464 million for Q3, 2010 and €576 million for Q2, 2011. These results represent EBITDA for the Chemicals businesses only after the recent disposal of the Refining business. LTM September 2011 EBITDA for Chemicals was €1,830 million Includes a pro forma adjustment of €82 million for the impact of the lightening strike at Chocolate Bayou, the severe weather conditions at Grangemouth and the strikes at the Port of Marseilles in Q4, 2010. 

The Group completed the disposal of 50% of the Refining business to PetroChina on July 1, 2011 for a gross consideration of $1,015 million. The disposal proceeds (after expenses) were utilised to repay a proportion of the Term Loans under the Senior Facilities Agreement. 

Global economic and political turbulence has created hesitancy in many markets, leading to a softening in demand in a number of sectors towards the end of the third quarter. 

Chemical Intermediates reported EBITDA of €165 million compared to €251 million in Q3, 2010. Demand for chemical intermediates has been mixed in the quarter. Demand for phenol and acetone has been solid in a structurally tight market and margins have remained good across most applications. Demand for Oligomers remained relatively robust across most sectors, particularly for speciality grades. The Oxide business continued to benefit from solid demand for both MEG and its derivative products. Acrylonitrile demand has been affected primarily by the weakness in ABS, particularly in Asia, which has led to a reduction in both volumes and margins. 

O&P Europe reported EBITDA of €80 million compared to €95 million in Q3, 2010. Demand for olefins in the quarter continued to be strong, resulting in high cracker utilisation rates. Cracker margins have remained at high levels, although butadiene prices have eased in the quarter. Polyolefins margins have remained relatively weak in the quarter as demand continues to be soft. There were a number of planned plant turnarounds in September at the Grangemouth and Cologne sites. 

O&P North America reported EBITDA of €126 million compared to €118 million in Q3, 2010. The business has continued to benefit from its flexibility to be able to utilise cheaper gas feedstocks (mainly ethane) to maintain good margins. Demand for olefins remained good, resulting in high utilisation rates. Margins have also been supported by a number of turnarounds in the industry tightening the supply side during the quarter. Demand for polymers has been sluggish during the quarter with weak domestic demand and little export opportunity. 

Total capital expenditure for Q3, 2011 was €60 million. YTD September 2011 capital expenditure for the Chemicals businesses only was €181 million. 
The Group has continued to focus on cash management and liquidity. Net debt was approximately €6.2 billion at the end of September 2011. Cash balances at the end of the quarter were €602 million and availability under the Revolving Credit Facility was €150 million. Net debt leverage was approximately 3.4 times as at the end of September 2011. 

For further information contact: 

Richard Longden, INEOS , +41 21 627 7063