Indorama Ventures Public Company (IVL) Q2 2024 earnings summary

Executive summary

• Q2 2024 adjusted EBITDA was $370 million, up 1% QoQ but down 11% YoY, with sales volume growth signaling the end of destocking and improved demand.

• Indovinya and Fibers segments showed robust recovery, while CPET faced margin pressure due to low benchmark spreads and a cracker outage, mitigated by premium pricing and asset optimization.

• Reported net loss of $637 million in Q2 2024, mainly due to $666 million in asset optimization-related impairments and provisions.

• Strong operating cash flow of $494 million in Q2 2024, with a 134% cash conversion rate.

• Significant impairment losses and restructuring led to a consolidated net loss for H1 2024, despite increased sales revenue.

Financial highlights

• Q2 2024 adjusted EBITDA: $370 million (up 1% QoQ, down 11% YoY); revenue was $3,990 million, up 5% QoQ and flat YoY.

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

• Net debt reduced by $32 million despite $150 million deferred payment and two dividend payments; net debt/equity at 1.54.

• Asset optimization resulted in $666 million impairment and $123 million expense provision.

• Basic and diluted loss per share was Baht (3.96) for H1 2024.

Outlook and guidance

• Sequential improvement expected from Q3 2024, driven by asset optimization, normalization of U.S. gas cracker operations, and continued high domestic demand.

• Full fixed cost savings of $170 million per annum and EBITDA uplift to materialize in 2025.

• Depressed benchmark spreads in PET and polyester fiber to persist, but U.S. shale gas advantage and asset optimization to support margins.

• Indovinya expected to sustain strong performance, with further growth from crop seasonality and operational improvements.

• Strategic review and restructuring, including asset closures and business realignment, are ongoing.