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Ineos confirms big sequential improvement in third-quarter earnings

October 26/2020

MOSCOW (MRC) -- Ineos has provided a trading update and says that, based on unaudited management information, its third-quarter EBITDA was EUR431 million (USD509 million), down from EUR514 million in the third quarter of 2019 but significantly up from EUR260 million in the second quarter of 2020, according to Chemweek.

Overall core market conditions for all of the businesses are now improving from the lows seen in the second quarter, the company says. The second quarter of 2020 was the low point of the current crisis.  Since then countries across the world have opened up their economies after lockdown and market conditions have gradually improved during the third quarter. The automotive and durables sectors are still weak, but are now slowly improving, and there are encouraging signs from the construction sector.

Ineoss olefins and polymers (O&P) North America business reported third-quarter EBITDA of EUR123 million, down from EUR215 million a year earlier. Ethylene markets remained stable, although margins reduced in the quarter due to lower spreads over raw material costs and the impact of increased industry capacity on supply/demand balances, Ineos says. Polymer demand was generally solid and continued to strengthen during the quarter, aided by strong consumables demand and improving automotive and durables markets. Margins remained relatively weak as the business continued to recover from the crisis, the company says.

The O&P Europe business reported EBITDA of EUR135 million, down from EUR159 million in the prior-year period. Demand in the ethylene market remained stable in the quarter, although demand for butadiene was weak as a result of the general slowdown in the automotive sector, Ineos says. Margins were lower due to weak demand, particularly for butadiene and benzene, and reduced prices in the quarter. European polymer demand was relatively balanced, with strong food and packaging markets and gradual improvements in the construction and automotive sectors, the company says.

The chemical intermediates business reported an increase in third-quarter EBITDA to EUR173 million from EUR140 million a year earlier. All the businesses in the chemical intermediates segment saw an improvement in performance as the quarter progressed, Ineos says.

Ineos says it has implemented a number of measures to conserve cash during this uncertain period. These include policies to control all discretionary fixed costs. The company has also reviewed all capital projects in each of the businesses and taken decisions to defer or reduce discretionary expenditure and scheduled turnarounds where it is safe to do so. Further details have not been disclosed.

All Ineos sites have continued to operate fully during the pandemic and supply chains have operated without significant disruption, the company says.

As MRC informed previously, Ineos, one of the worlds largest manufacturing companies halted operations at its No. 1 olefins unit at Texas cracker for maintenance on September 18, 2020 owing to technical issues. Further details on duration of the shutdown could not be ascertained. Located at Chocolate Bayou in Texas, the No. 1 olefins unit has an ethylene production capacity of 1.07 million mt/year and propylene production capacity of 235,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Ineos is a global manufacturer of petrochemicals, specialty chemicals and oil products employing 22,000 people. It has 34 businesses, with a production network spanning 183 manufacturing facilities in 26 countries.


mrcplast.com
Author:Margaret Volkova
Tags:Europe, PP, PE, LLDPE, PP random copolymer, propylene, ethylene, petrochemistry, Ineos, Russia, USA.
Category:General News
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