Indorama Ventures Public Company (IVL) Q2 2024 earnings summary

Executive summary

• Adjusted EBITDA for Q2 2024 was $370 million, up 1% quarter-on-quarter but down 11% year-on-year, with sales volume reaching 3.64 million tons, signaling the end of destocking and a return to stable demand patterns.

• Indovinya delivered strong volume and margin growth, while CPET was impacted by a cracker outage and normalization of campaign gains.

• Reported net loss of $637 million in Q2 2024 due to $666 million in asset optimization-related impairments and provisions; adjusted net profit was $33 million.

• Operating cash flow for Q2 2024 was $494 million, with a cash conversion of 134%.

• The company is leveraging its global footprint and domestic supply chain to maintain premium pricing despite depressed industry spreads.

Financial highlights

• Revenue was $3,990 million in Q2 2024, up 5% QoQ and flat YoY; adjusted EBITDA was $370 million, up 1% QoQ but down 11% YoY.

• Operating cash flow for Q2 2024 was $494 million; trailing 12 months: $1.5 billion.

• Net debt reduced by $32 million in Q2, despite $150 million deferred payment for Oxiteno acquisition and two dividend payments.

• Asset optimization led to $666 million post-tax impairment and expense provision in Q2.

• Fixed cost savings of $170 million per annum expected by 2025, with EBITDA improvement of $150–160 million per year.

Outlook and guidance

• Q3 2024 sales volume estimated at 3.74 million tons, with sequential improvement expected as destocking ends.

• Fixed cost savings and EBITDA improvements from asset optimization to be realized from Q3 2024, fully materializing in 2025.

• Ongoing supply chain disruptions and high freight costs are expected to benefit domestic production and margins.

• Indovinya and Fibers segments anticipate continued recovery and improved performance in the second half of 2024.

• Lower US ethane prices and shale gas advantage to support ethylene margins.