Ineos has provided a trading update and says that, based on unaudited management information, its third-quarter EBITDA was €431 million ($510 million), down from €514 million in the third quarter of 2019 but significantly up from €260 million in the second quarter of 2020.
“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.”
Ineos’s olefins and polymers (O&P) North America business reported third-quarter EBITDA of €123 million, down from €215 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 €135 million, down from €159 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 €173 million from €140 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.
By Ian Young
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