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INEOS Group Holdings S.A. Q2 2014 Trading Statement

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

Based on unaudited management information INEOS reports that EBITDA for the second quarter of 2014 was €447 million, compared to €365 million for Q2, 2013 and €401 million for Q1, 2014. 

North American markets have continued to be strong, taking full benefit from their current feedstock advantage. Market conditions in Europe have shown further signs of improvement in the quarter. In contrast, markets in Asia have generally remained soft. 

O&P North America reported EBITDA of €236 million compared to €221 million in Q2, 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 robust, with tight markets and high margins supported by an improving US economy.

Chemical Intermediates reported EBITDA of €132 million compared to €104 million in Q2, 2013. Chemical Intermediates experienced an improved performance across all 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. The Oxide business had a stable performance for the quarter with solid EO and ethanolamine demand, together with improved demand for solvents. The Antwerp plant had a scheduled turnaround in the quarter. Supply side restrictions due to a number of competitor turnarounds, together with some improvements in BPA demand have improved the performance of the Phenol business in the quarter. The market for the Nitriles business has shown some signs of improvement, with firmer demand in the US and Europe. 

O&P Europe reported EBITDA of €79 million compared to €40 million in Q2, 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 offset by weak butadiene margins. Polymer demand was firm with good volumes and stable margins in the quarter. The partial closure of the cracker in Lavera during Q2, 2013 adversely impacted the results for that quarter. The results for Q2, 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.

The Group has continued to focus on cash management and liquidity. Net debt was approximately €6.2 billion at the end of June 2014. Cash balances at the end of the quarter were €1,087 million, and availability under undrawn working capital facilities was €271 million. Net debt leverage was approximately 4.0 times as at the end of June 2014.