Unaudited Interim Trading Statement Q1/ 2016
INEOS Styrolution Holding GmbH (‘INEOS Styrolution’) reports its trading performance for the first quarter of 2016. The trading statement intends to inform stakeholders prior to the INEOS Investor Days.
Based on unaudited management information, INEOS Styrolution’s EBITDA before Special Items (‘EBITDA’) for the first quarter of 2016 is €208 million, compared to €158 million for Q1/ 2015 and €147 million for Q4/ 2015. This is a record first quarter EBITDA for INEOS Styrolution. LTM EBITDA for the period ended 31 March 2016 is €792 million. The COSA (inventory holding) effect amounted to a loss of -€18 million in Q1/ 2016 compared to a loss of -€30 million in Q1/ 2015.
In the first quarter of 2016, Polystyrene EBITDA was €65 million, compared to also €65 million in the same quarter of 2015. Market conditions for PS continued to be good in EMEA and the Americas, with solid demand and strong margins. In Asia, the reduction in growth, mainly in China, had a negative impact on the utilization rates and margins in the Asian region. While feedstock prices fell in the earlier part of the quarter, INEOS Styrolution was able to limit sales price reductions.
In the first quarter of 2016, ABS Standard EBITDA decreased to €24 million, compared to €33 million in Q1/ 2015. Market dynamics in Asia significantly weakened compared to the top-of-cycle margins of the first quarter of 2015. The reduction in growth mainly in China had a negative impact on the utilization rates and margins in the Asian region. Asian imports also put margin pressure on ABS Standard businesses in EMEA and the Americas. Despite the arbitrage opening up, the company was able to improve EBITDA in the Americas and minimize the impact in EMEA.
The Specialties business had another strong quarter. EBITDA in the first quarter of 2016 was €65 million, compared to €55 million in Q1/ 2015. EBITDA increased in EMEA and the Americas based on higher margins, product mix effects and lower fixed costs. Margins improved as lower feedstock prices were only partially passed on to the customers. INEOS Styrolution has a strong strategic focus on its Specialties business.
Styrene Monomer reported an EBITDA of €54 million compared to €5 million in Q1/ 2015. The improvement was caused by an increase in sales volumes and margins. In the first quarter of 2016, all plants were fully operational, while in the first quarter of 2015 our Texas City, United States, plant was in maintenance during most of the quarter which reduced output. Market conditions were robust on the back of solid demand and tighter styrene supply, because of competitor outages (mainly in Asia). Negative COSA effects were also lower in the first quarter of 2016 compared to 2015.