Positive global sentiment, underscored by rebounding global oil prices and vaccine rollouts, has resulted in strong volume and demand as well as strong margins for Indorama Ventures Public Co. Ltd.’s (IVL) key products, the Bangkok-based company states in its first-quarter earnings report. The company says the quarter's strong volume, demand and margins have been driven by economic recovery in China. The company says it expects strong volume, demand and margins to continue into the second quarter.
According to the company’s first-quarter earnings report, global inventory levels are tight, combined with supply chain shocks, which is leading to margin increase in all commodity products, supporting the increase in crude oil prices. The company says the rise in crude pirces has brought an improvement in the shale gas advantage, benefiting IVL’s integrated oxides and derivatives (IOD) business segment in North America. ILV says it expects to see stronger than anticipated earnings for the first half of 2021 because of all of these combined factors.
“Last quarter I stated that 2020 brought no structural damage to the industries IVL plays in and the first quarter of 2021 has further solidified this thesis," says Aloke Lohia, group CEO. "Our advantaged portfolio and experienced management, supported by our transformation programs, will yield superior returns for shareholders in line with our 2023 targets. Our journey towards carbon neutrality will be a key guidepost for IVL’s actions going forward, in our quest to be a world-class sustainable chemical company."
Q1 financial results
IVL has reported year-over-year growth in revenue in the first quarter of its 2021 fiscal year. According to the company’s latest earnings report, it achieved revenue of $3.24 billion in the first quarter, up 10 percent compared with the same time last year.
IVL reports earnings before interest, taxes, depreciation and amortization (EBITDA) of $483 million coming from higher core EBITDA of $369 million, which the company says grew 45 percent from last quarter and 21 percent from the same time last year.
Within the quarter, the company also reorganized its leadership into 16 distinct business verticals within three business segments under one global CEO. IVL says this model demonstrates “deftness and agility in keeping supply chains functioning with minimal disturbance to cater to strong customer demand.” The company says having a regionally integrated business model has proven to be beneficial through various supply chain disruptions in the first quarter of the year, notably the Polar Vortex and Suez Canal blockage.
“Having access to its own raw material has allowed IVL to operate at higher rates and thereby reliably serve customers due to our supply chain resilience,” the company says.
IVL says it aims to achieve carbon neutrality and has a strategy that includes recycling, renewable energy, ethical carbon offsets and adoption of new green technologies and other initiatives. According to IVL, it is positioned as a large polyethylene terephthalate (PET) producer focused on sustainability, leveraging its scale to support customers’ sustainability targets. In the first quarter, IVL launched a certified carbon neutral PET pellet through its Deja sustainable brand platform. The company’s carbon-neutral PET pellets are made with renewable energy, locally sourced materials and low-impact water transport to achieve a carbon-neutral footprint for customers.