Indorama Ventures Plc (IVL), a global chemical producer, reported US$1.74 billion in earnings before interest, taxes, depreciation and amortisation (Ebitda) for the 2021 financial year, an increase of 55% year-on-year.
The firm's consolidated revenue was also up 38% to $14.6 billion compared with the previous year thanks to the rebound in consumer confidence, macroeconomic tailwinds, and the firm's strategic model that reaped benefits from rising inflation, energy price hikes and supply chain shocks.
Higher freight rates in IVL's premium Western markets improved its local import parity pricing advantage, said the company. In the fourth quarter, the introduction of China's dual control policy widened polyester margins.
For IVL's largest combined polyethylene terephthalate (PET) segment, core Ebitda was reported at $1.1 billion, a 39% increase, in the context of strong demand and low inventories.
Integrated oxides and derivatives (IOD) posted a core Ebitda of $377 million, up 228% from a year earlier.
With higher oil prices expected to continue into 2022, the segment will benefit from shale gas economics, improving mono-ethylene glycol spreads and upside from the Lake Charles ethylene cracker, which resumed operations in late 2021, said the company.
The Oxiteno acquisition, expected to close in the first half of 2022, will bring complementary products, green energy innovation and geographical diversification to the IOD segment, said IVL.
The fibres segment delivered a 37% increase in Ebitda of $268 million as volumes rose 11%. Margins widened due to tighter markets and a favourable product mix, with setbacks coming from energy and commodity price increases, while the ongoing semiconductor shortage impacted the mobility vertical.
Aloke Lohia, IVL's group chief executive, said his firm proved the resilience of its global footprint and integrated portfolio across the polyester value chain in 2021.
"The past two years were an unprecedented period of disruption in which our business model's robustness and our teams' agility were tested. Having reset our business plan for the new normal era, I have never been more confident in our model, our strategy and our teams," said Mr Lohia.
Dilip Kumar Agarwal, chief executive and chief financial officer at IVL, said the firm's performance was a result of several macroeconomic factors, such as heightened crude oil prices, supply disruptions and resurgent consumer confidence as vaccinations were rolled out.
"These factors led to improved margins and benefited us as a preferred regional supplier that can react quickly to customer needs. Our transformation programmes we started three years ago are delivering efficiency gains faster than planned," he said.
"As the world emerges from the pandemic, our increased confidence in IVL's resilient model sets a strong foundation for further growth through 2024."
In February, IVL announced a three-year business plan with a strong focus on its platform, people and systems.
The firm aims to unlock its full potential to contribute to Ebitda growth and deliver an ambitious 15% return on capital employed by 2024.
Disciplined capital allocation of about $5 billion of free cash flow will create opportunities to meet stakeholders' expectations, said Mr Agarwal.
Project Olympus, its efficiencies and business transformation project, is tracking ahead of the 2023 budget.