Trading Statement Q4, 2022
INEOS Group Holdings S.A. (‘IGH’ or ‘INEOS’) announces its trading performance for the fourth quarter of 2022.
Based on unaudited management information INEOS reports that EBITDA for the fourth quarter of 2022 was €392 million, compared to €814 million for Q4, 2021 and €511 million for Q3, 2022. The fourth quarter results were adversely impacted by non-cash inventory holding losses of approximately €149 million as a result of the large decline in crude oil and product prices in the quarter. Full year EBITDA was €2,841 million compared to a record €3,616 million for 2021.
All of the Group’s sites have continued to operate fully during the on-going COVID-19 virus pandemic and supply chains have operated without significant disruption. High energy costs, particularly in Europe, and continued high inflation rates have led to reduced demand levels and erosion of margins from the previous historic record performance in 2021.
O&P North America reported EBITDA of €176 million compared to €344 million in Q4, 2021. Full year EBITDA was €1,204 million compared to €1,577 million for 2021. Ethylene markets were generally weaker in the quarter with lower demand, improved industry supply availability and reduced export opportunities. Polymer markets were softer with some erosion of margins for most products in the quarter, although pipe markets remained healthy.
O&P Europe reported EBITDA of €74 million compared to €194 million in Q4, 2021. Full year EBITDA was €656 million compared to €948 million for 2021. Markets for olefins in the quarter were generally weaker with most industry crackers being trimmed across Europe. Propylene markets were long with weak demand across most derivatives due to high energy costs. European polymer markets were weaker with reduced demand and increased levels of imports.
Chemical Intermediates reported EBITDA of €142 million compared to €276 million in Q4, 2021. Full year EBITDA was €981 million compared to €1,091 million for 2021. Overall demand in the Oligomers business was robust across the product portfolio, with particular strength in co-monomers. Demand was weaker across most market sectors for the Oxide business, with some pressure on margins due to high energy costs. Demand for the Nitriles business was mixed, with firm demand in the USA, but softer demand in both Europe due to high energy costs, and Asia due to improved industry supply. Markets for the Phenol business were balanced in the USA, but weaker in Europe.
In December 2022 the Group completed the acquisition of 50% of Shanghai SECCO Petrochemical Company Limited (‘SECCO’) for approximately €1.5 billion. The acquisition was partly funded by a new €0.6 billion Term Loan facility.
The Group has continued to focus on cash management and liquidity. Net debt was approximately €6.2 billion at the end of December 2022 (including the new SECCO Term Loan). Cash balances at the end of the quarter were €2,639 million, and availability under undrawn working capital facilities was €616 million. Net debt leverage (excluding the SECCO Term Loan) was approximately 2.0 times as at the end of December 2022.