INEOS Enterprises Holdings Limited (“INEOS Enterprises”) reports its trading performance for the third quarter 2021.
Based on unaudited management information, INEOS Enterprises’ EBITDA before Special Items (“EBITDA”) for the third quarter 2021 was €130M. This compares to an EBITDA of €92M for the third quarter 2020 and €127M in the prior quarter.
INEOS Enterprises has continued to operate all sites with Covid-19 compliant processes in place. Given our importance to supporting the fight against Covid-19, resources have been made available to ensure the safety of our people and preserve the continuity across the business.
Pigments reported Q3 2021 EBITDA of €37M, compared to €33M in Q3 2020 and €32M in Q2 2021. Pigments had strong demand over the quarter, with the market remaining tight across North America and Europe. A production shortfall, due to an unplanned outage, impacted sales volumes in the quarter by approximately 5 kilo-tonnes. The impact of this was partially offset by improving margins from price increases implemented in the quarter.
Composites’ Q3 2021 EBITDA was €48M, compared to €35M in Q3 2020 and €44M in Q2 2021. Composites saw very strong demand across the quarter, particularly in Europe and North America, despite some raw material supply constraints limiting volume in North America. Demand remained strong across DIY applications such as engineered stone and sanitary and was notably robust in construction and infrastructure.
In Q3 2021, Solvents’ EBITDA was €36M, compared to €23M in Q3 2020 and €42M in Q2 2021. Solvents had another strong quarter, predominantly driven by BDO which continued to benefit from tight global supply in Europe and Asia, leading to further price increases during the quarter. Other products were more balanced, with supply and demand stable for Ethanol and IPA. Margins in the Solvents division have been negatively impacted in the quarter by the record gas prices seen in Europe, where gas is primarily a variable cost used for steam production at Moers.
Chemical Intermediates reported Q3 2021 EBITDA of €15M compared to €6M in Q3 2020 and €16M in Q2 2021. As with the prior quarter, our Chemical Intermediates businesses had a strong third quarter. Market conditions remained strong for all products at our Joliet business, with some volume impact from a planned turnaround of the TMA unit in September. Calabrian saw strong demand from the mining sector in the quarter and Compounds’ demand was good across all sectors.
We continue to invest in our Hygienics business with development of brand awareness and marketing. During the quarter we have seen new retail opportunities for sanitisation products, including the launch of sanitiser wipes. This resulted in an EBITDA loss for the quarter, of €(6)M which compares to €(5)M in Q3 2020 and €(7)M in the prior quarter.
In line with our conservative financial policy, we have maintained a prudent capital position with continued control over our operating cost base. At the end of the quarter we report cash balances of €303M and net debt of €1,009M, resulting in a net debt leverage of c.2.3x. Our €300M securitisation facility was undrawn at quarter end. As reported previously, during the quarter, INEOS Enterprises made a voluntary repayment of the Shareholder loan of c.€100M.
We continue to monitor the evolution of the gas pricing dynamics across Europe and the United States. Our exposure to this through Q3 was primarily in Europe, in our Solvents division where natural gas is used for energy. This has led to reduced margin for the Oxy-Solvents division in the quarter, but we will look to pass this surcharge through to customers should gas prices remain high. We have limited exposure to natural gas as a feedstock across the group.
Given our advantaged geographic locations and proximity to key suppliers and customers, we did not experience any logistical issues relating to freight in the quarter.