Indorama Ventures Plc is expected to show strong sales volume next year, with contributions from its 5 acquisitions made in the first quarter of this year which add up capacity by 1.7 million tonnes, said DBS Research.
Contributing to strong sales also includes the full production at Alpha PET plant with 432,000 tonnes of PET capacity in Alabama and Lop Buri plant with 180,000 tonnes capacity in Thailand. The Alabama plant was shut down for 2 months in the second quarter due to severe floods while Lop Buri plant has also been shut down since end Sept 2011 amid widespread floods in Thailand. IVL has total PET capacity of 3 million tonnes at the third quarter.
“Despite rising macro risks, we like IVL due to structural changes via consolidation, which had been key to its success in the past two years,” DBS said in its research note, adding that it may revise up the 2011 earning target for IVL as the 9-month figures account for 94 per cent of its current forecast.
IVL reported the net profit of Bt3.6 billion, up 23 per cent on year and 41 per cent on quarter. Production volume hit a record 1.2 million tonnes. In the quarter, spread of PTA softened to US$200/tonne from US$250/tonne in the second quarter while spread of PET increased to US$250/tonne from US$240/tonne in the second quarter.
In the first nine months, sales grew to $4.7 billion, 112 per cent from $2.22 billion in the same period last year.
IVL Group CEO Aloke Lohia said that the company would keep expanding business, with opportunities to expand in markets like Indonesia and bolster market position in the developed nations.
“Our business today is financially far stronger than it ever was,” explained Lohia. “With a Net Debt/Equity of 0.63 times and a liquidity of over US$1 billion, this will help us not only to operate our business most optimally but also allow us to continue to grow our business with selective and accretive acquisitions and organic opportunities.”