Trading Statements

Trading Statement Q4 2022 - INEOS Quattro Holdings Limited


INEOS Quattro Holdings Limited (‘INEOS Quattro’ or the ‘Group’) announces its trading performance for the fourth quarter of 2022.

Based on unaudited management information, INEOS Quattro reports that EBITDA for the fourth quarter of 2022 was €455 million, compared to €671 million for Q4, 2021 and €313 million for Q3, 2022. The fourth quarter results were adversely impacted by non-cash inventory holding losses of approximately €111 million as a result of the large decline in raw material and product prices in the quarter. Full year EBITDA was €2,572 million compared to a record €3,039 million for 2021.

Styrolution reported EBITDA of €132 million compared to €217 million in Q4, 2021. Full year EBITDA was €749 million compared to €1,180 million for 2021. Polymer demand softened in the quarter as customers reduced their stock levels due to a combination of general market uncertainty, expectations of price reductions and the demand for durables reduced compared to the top of cycle conditions seen in 2021 and the first half of 2022. Market margins were weaker in most regions and product groups due to soft demand and an open arbitrage for exports. The fourth quarter result includes non-cash inventory holding losses of approximately €59 million due to a decrease in raw material prices compared to a gain of €3 million in Q4, 2021.

INOVYN reported EBITDA of €328 million compared to €203 million in Q4, 2021. Full year EBITDA was €1,176 million compared to €974 million for 2021. The increase in EBITDA compared to Q4, 2021 was the result of high pricing of caustic soda, which, despite the weakening demand environment, reached record levels in Europe in the quarter. The primary driver was low chlorine production rates across Europe as a consequence of high electricity prices and low PVC demand. The European contract price of caustic soda was 194% higher than Q4, 2021. Production and sales volumes of general purpose and specialty PVC were lower than Q4, 2021 as high inflation and high energy costs in Europe resulted in weak demand. European producers also faced more competition from US and Asian imports. As a result, general purpose PVC margins in Q4, 2022 were lower than the prior year quarter, in particular in export markets which saw significant reductions. Specialty PVC margins were lower in export markets but slightly higher in domestic markets.

Aromatics reported EBITDA of €(40) million compared to €41 million in Q4, 2021. Full year EBITDA was €284 million compared to €263 million for 2021. Unit margins in Q4, 2022 were higher than in the same period of 2021, driven primarily by North America. However, PTA sales volumes were lower across all regions due to weakness in global demand. In addition, high energy and raw material costs in the western hemisphere led to some destocking, and customers’ preference for low cost imports from Asia into the US and Europe further reduced demand in those regions. In the second half of the quarter, falling raw material prices resulted in non-cash inventory holding losses of approximately €52 million compared to a gain of €7 million in Q4, 2021.

Acetyls reported EBITDA of €35 million compared to €210 million in Q4, 2021. Full year EBITDA was €363 million compared to €622 million for 2021. In Europe, despite a notional cap on gas pricing, high operating costs meant local production struggled to compete with imports from lower cost regions. Pricing in the US held up at the start of the quarter, but significant de-stocking across the customer base occurred towards the year end. In Asia, the markets remained subdued, impacted by the Chinese Government's zero COVID policy at the time, with margins eroding further as the market price for acetic acid continued to fall.

Net debt was approximately €4,862 million at December 31, 2022. Cash balances at the end of the quarter were €1,530 million. In December 2022 the Group paid an intercompany loan of €500 million to its immediate parent, which was subsequently converted to a dividend in January 2023. The securitization facilities of €840 million were undrawn. Net debt leverage was approximately 1.9 times EBITDA at the end of December 2022.