Bangkok--15 May--Indorama Polymers
Indorama Polymers Plc, the world’s second largest PET producer, today reports a record breaking profit of 681 million baht a rise of 197.4% year-on-year for the its operations during the first quarter of 2009 thanks to the record volume sales coupled with the decline in production cost.
“We are glad to inform that our performance for the first quarter beat our own internal expectations amid a continued rise in volumes backed by sustained demand and lowered expenses from lower feedstock and interest expenses,” Aloke Lohia, , chairman of the executive committee of IRP said.
Mr. Lohia said that the key drivers for the growth in the profits were a 41.2% rise in sales revenues with the highest sales volume increase coming from the company’s European operations.
IRP, which acquired 2 PET Polymer plants in Europe in April 2008, saw its total sales revenues rise to 10.06 billion baht from 7.12 billion baht seen in Q1 2008. The biggest contributor was the European market where the company sold 152,943 tons against 53,521 tons seen during Q1 2008 and 129,068 tons during the last quarter Q4 2008.
IRP, he said, had higher sales quantity than its production capacity during the first quarter operations (104.3% capacity utilization on sales) as the firm liquidated some of its inventory, while the firm had achieved only 94.1% capacity utilization on sales during Q4 2008.
“The first quarter has shown a sterling result and we have therefore used some of the cash flow to pay down our debts,” Mr. Lohia said. IRP, he said has used 1.2 billion baht to pay down operating debts which has improved the Net Operating Debt on Equity to 1.15 times from 1.50 times at end of December 2008.
He said that the company was also witnessing a blessing from the decline in interest rate as interest expenses have reduced to US$ 17 per ton in Q1, 2009 from US$ 25 per ton in Q1, 2008 benefiting from lower benchmark interest rates.
To help IRP, Mr. Lohia said that earnings before interest, tax, depreciation and amortization (EBITDA) margin on sales increased to 11.6% during the first quarter from 7.7% seen during Q1, 2008.
He said that the higher margins were because of lower feedstock prices, lower conversion cost on lower energy prices and higher operating rates.
Commenting on the blended spreads, a benchmark for the industry to indicate its future earnings potential, Mr. Lohia said that the blended spreads stood at $232 a ton against $208/ton seen in Q1 2008 and $234 for the year 2008.
The sharp increase in profits for the firm has helped put the annualized earnings per share at 1.97 baht against 0.66 baht seen during the same period last year.
About Indorama Group - IRP is a subsidiary of Indorama Ventures Limited, one of the largest vertically integrated polyester chain producers globally. Headquartered in Bangkok, the company operates 14 manufacturing units in 5 countries which span 3 continents. The company employs roughly 3,600 people, and is expected to generate revenues of $2.5 billion in 2009.