Q3, 2016 Trading Statement
INEOS Group Holdings S.A. October 20th, 2016
INEOS Group Holdings S.A. (‘IGH’ or ‘INEOS’) announces its trading performance for the third quarter of 2016.
Based on unaudited management information INEOS reports that EBITDA for the third quarter of 2016 was a record €647 million, compared to €612 million for Q3, 2015 and €571 million for Q2, 2016.
North American markets have continued to be strong, taking full benefit from their current feedstock advantage. Market conditions in Europe have remained good, supported by the continued weakness of the Euro. In contrast, markets in Asia have been somewhat weaker.
O&P North America reported EBITDA of €280 million, compared to €259 million in Q3, 2015. The business has continued to benefit from its flexibility to be able to utilise cheaper NGL feedstocks to maintain healthy margins. Both ethane and propane have continued to be advantaged feedstocks. The US cracker business environment was solid with healthy margins and high operating rates throughout the quarter. Markets were tight as a result of a number of planned and unplanned outages at competitors’ plants. Polymer demand was strong, with tight markets and high margins.
O&P Europe reported EBITDA of €193 million compared to €212 million in Q3, 2015. Demand for olefins in the quarter was solid in a tight market with top of cycle margins. European polymer demand was firm in a balanced market, with solid volumes and high margins in the quarter.
Chemical Intermediates reported EBITDA of €174 million compared to €141 million in Q3, 2015. Market demand in North America and Europe remained firm in the quarter. Individual regional markets were affected by unplanned outages of both producers and consumers, leading to tighter market conditions for some of the businesses. The overall demand trend in the Oligomers business was strong in most product sectors and markets, most notably in the polymer co-monomer segment, supporting the strong polymer markets. Demand for the Oxide business was solid, with some improvement in the solvents markets in the quarter. The tighter market conditions for the Nitriles business were aided by industry supply side issues, which led to firmer pricing and some improvement in margins. Demand for the Phenol business was stable, with some improvement in margins in the quarter.
The Group has continued to focus on cash management and liquidity. Net debt was approximately €5.6 billion at the end of September 2016. Cash balances at the end of the quarter were €2,472 million, and availability under undrawn working capital facilities was €284 million. Net debt leverage was approximately 2.5 times as at the end of September 2016.