Earnings call transcript: Indorama Ventures Q4 2024 sees earnings beat, stock dips

Indorama Ventures PCL (IVL) reported its fourth-quarter 2024 earnings, surpassing expectations with an earnings per share (EPS) of $0.20, compared to the forecasted $0.10. Despite the earnings beat, the company’s stock fell by 4.46% to $19.30, reflecting market concerns over broader industry challenges. Revenue for the quarter reached $122.1 billion, aligning with the company’s strategic focus despite a volatile market environment. According to InvestingPro analysis, IVL is currently undervalued, with a Financial Health Score of 2.16 (FAIR).

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Key Takeaways

• Indorama Ventures’ EPS significantly exceeded forecasts, achieving $0.20 against an expected $0.10.
• The stock price dropped by 4.46% in the post-earnings session, closing at $19.30.
• Full-year 2024 adjusted EBITDA increased by 10% year-over-year to $1.52 billion.
• The company announced a strategic minority investment in EPL Limited worth $220 million.
• Indorama Ventures plans to continue its focus on operational efficiency and cost reductions.

Company Performance

Indorama Ventures demonstrated robust performance in 2024, with a notable 10% year-over-year growth in adjusted EBITDA to $1.522 billion. The company also maintained steady cash flow from operations at $1.335 billion and kept its net debt stable at $6.89 billion. Despite challenging global chemical markets and overcapacity issues, Indorama Ventures capitalized on its geographically diversified business model, generating 70% of its EBITDA from the Americas.

Financial Highlights

• Revenue: $122.1 billion for Q4 2024.
• Full Year 2024 Adjusted EBITDA: $1.522 billion (+10% YoY).
• Reported EBITDA: $1.4 billion (+26% YoY).
• Cash Flow from Operations: $1.335 billion.
• Net Debt: $6.89 billion.

Earnings vs. Forecast

Indorama Ventures reported an EPS of $0.20, doubling the forecast of $0.10, marking a significant earnings beat. This performance contrasts with previous quarters where earnings met or slightly exceeded expectations, highlighting the company’s strategic initiatives in cost management and operational efficiency.

Market Reaction

Despite the earnings beat, Indorama Ventures’ stock fell by 4.46% to $19.30, moving away from its 52-week high of $27.50. The stock has experienced significant pressure, dropping 12.67% in the past week and 22.49% year-to-date. The decline reflects investor concerns over persistent industry challenges, including overcapacity and compressed margins in the polyester value chain. Analysts maintain a bullish outlook, with consensus recommendations leaning toward "Buy" and price targets suggesting potential upside.

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Outlook & Guidance

Looking ahead, Indorama Ventures is targeting net debt reduction and anticipates improved margins in 2025. The company plans to generate $150-200 million from asset divestments and is considering an IPO of its packaging business in Q1 2026. These initiatives aim to bolster financial stability and enhance shareholder value.

Executive Commentary

CEO D.K. Agarwal highlighted the company’s proactive approach to navigating industry complexities, stating, "We are proactively navigating these complexities through IVL two point zero with a strong focus on organic growth, operational efficiency, and financial discipline." Agarwal also emphasized the importance of geographical diversity, saying, "Our geographical diversity paid off in 2024."

Risks and Challenges

• Overcapacity in the petrochemical sector continues to pressure margins.
• Geopolitical and economic volatility may impact global demand.
• Supply chain disruptions could affect the CPET segment.
• Potential changes in U.S. trade policy could alter market dynamics.

Q&A

During the earnings call, analysts raised questions about the potential impacts of a resolution to the Russia-Ukraine conflict and supply chain disruptions in the CPET segment. The management also addressed concerns regarding the Chinese petrochemical market dynamics and potential U.S. trade policy impacts, providing insights into the company’s strategic responses to these challenges.

Full transcript - Indorama Ventures PCL (IVL) Q4 2024:

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: Good morning. Welcome, everyone, and thank you for taking time for joining us for Indorama Ventures Full Year twenty twenty four Results Briefing Meeting. My name is Vikas Jalan, Investor Relations and Planning at IDL. Joining me today, Mr. D.

K. Agarwal, Dipti Group’s CEO Muthukumar, Parmasiram and Kumar Zadha, President and Co leaders for CPET segment. Alastair Ram Po joining us online from The U. S, Executive President for EndoVinia and Diego Bory, Executive President for Fibers. A quick disclaimer, this meeting is being recorded and a replay of this session will be available on our website after the meeting.

We have made a few assumptions and estimates on future industry and business trends based on an analysis of available information at this point in time. So with that, I now invite Mr. Agarwal to first share the business and financial highlights and after the prepared presentation, we’ll open up the session, the floor for Q and A. Over to you, please, Mr. Agarwal.

D.K. Agarwal, CEO, Indorama Ventures: Thank you, Vikas. Very good morning to all of you joining us on the year end Analyst Meet. As we always present, let us review the microeconomic landscape, which directly or indirectly impacted the industry as well as our business. The world is passing through one of the biggest turmoil periods. In quarter four, the U.

S. And China saw some marginal improvement, supported by rising production and new orders while Europe remained challenging due to weak demand as you can see on the extreme left top graph. The freight rates declined due to additional vessel capacity which got added and we also saw improvement in Red Sea crisis. On energy front, weak demand and ample supply kept oil prices lower, they have been very volatile in fourth quarter twenty twenty four. Meanwhile, interest rate marginally declined as inflation continues to be moderated, although as you know, post Trump policies, we see that interest rates may remain elevated for some time.

Looking at what are the recent U. S. Elections and impact on our business, our expected support The U. S. Economy in the coming years.

As you know, the IBL has been a geographically diversified company as a local producer in The United States generating nearly 40% of the revenue of IVL and 50% of the EBITDA. And if you take entire Americas, include Brazil and America, Brazil and Mexico, it is 70% of IVL EBITDA. So, I will, we believe, will stand to benefit from potential tariff increases, which may happen, potential corporate tax reductions and lower shale gas prices driven by increased oil and gas production as drill baby drill works. However, ISVIN also brings headwinds starting with inflationary pressure that could impact demand for certain products, particularly in the consumer demands like Indovine and Fibre. Additionally, potential trade barriers would benefit IVL operation due to local production base, as I mentioned.

With these challenges, our significant presence in The United States provides us a strong advantage and overall we expect positive impact for IVL from this move in United States. If you go now, let me walk you through the financial results for the entire year. In 2024, we know that industry has been very challenging. IBL took decisions, timely actions to fortify its market leadership and secure a sustainable growth path as the company pivots towards systemic generational change in the chemical industry. In a year of alignment, mobilization and launch, management began executing a company’s three years I will two point zero transformation strategy.

As you remember in CMD, we announced in March with a singular focus on optimizing global assets, this means shutting down high cost assets, reducing debt, enhancing cash flows and implementing next generation digital and leadership program to achieve our stated 2026 targets. Now, this I’m very happy to report that this disciplined self help management actions helped bolster full year earnings as global chemical markets continue to struggle through 2024 in one of the most challenging downturns in the recent industry, as you might have noticed from results of many chemical industries. The industry’s future is being irrevocably shaped by long term macroeconomic themes, including the unequal impact of peak oil between East and West, as we know the feedstock disparity between East and West, China’s ambition to continue to expand its own production, India’s enormous growth engine and one of the most unstable geopolitical environments in a generation. Amid this volatile backdrop, we are satisfied that I will posted a full year reported EBITDA of $1,400,000,000 in 2024, which is an increase of 26% and adjusted EBITDA of $1,522,000,000 an increase of 10% year on year. Though performance varied from business to business, improved volume across all segments and proactive management actions resulted in the overall improved earning for the year.

The pivots made this year from the assessment of make versus buy decision. As you know, we shut down lot of PTA capacity, we went into buying PTA, resulted in a 4% year on year rise in volumes. So, we protected our end market on a like to like basis. Persistent ore capacity, particularly in our petrochemical business and PET kept benchmark spreads under pressure, affecting the integrated PET and MTV businesses. There were some tailwinds as polyester fiber and integrated MEG spreads improved through the year, boosting lifestyle fiber and maintaining intermediate chemical performance.

You will see this in coming slides. Although there was an increase in volumes, industry challenges offset these advantages. Steps taken by the management and a strong emphasis on cost control have significantly contributed to the improved performance this year. The asset optimization plan outlined in March, where we decided to rationalize few high cost facilities, has thus far yielded an additional R48 million dollars in fixed cost reduction in R24 with further enhancement expected as rationalization progresses and additional savings materialize to support earning growth in 2025. We expect another 100,000,000 additional fixed cost savings coming in 2025.

These actions have contributed to higher operating rate for the Group, climbing 8% in this year. Still in light of continued industry pressure, the Company has determined that further management actions are necessary in addition to the significant measures already undertaken in 2024 in a sustained drive to achieve our stated 2,000 I will two point zero objectives. And we will discuss this further details in the upcoming chemical markets in March 25, which is a week ahead. Lower energy costs, especially in Europe, provided an uplift of $55,000,000 year on year across the group. Moreover, significant currency movements in certain markets as you know when the currencies weakened, Brazil, Nigeria and Egypt brought a $48,000,000 reduction in our fixed conversion cost including variable and fixed.

In 2024, looking at cash flow, I will generated $1,330,000,000 of cash flow from operation, of which R110 million dollars was used for one time severance and related expenses. As you know, we shut down some facilities and R229 million dollars was spent on higher short term working capital to stabilize the supply chain for PTA and PX purchases. We landed up with some high inventories and CPET business and this extra working capital outflow is expected to reverse as cash flows in 2025 as the supply chain stabilizes. You will be pleased to note that fiber nearly improved there working capital by RMB100 million. So, CPAD increased by RMB300 million plus and I think that will get normalized very soon in next coming two quarters.

The consolidated fourth quarter adjusted EBITDA year on year was higher by 29% from improved operation, but lower quarter on quarter by 16% due to seasonality. So that’s on the fourth quarter. Now, it’s important to get an update on I will two point zero. It’s a quick snapshot summarizing the update on asset optimization program. In second quarter twenty twenty four, we executed a comprehensive asset rationalization program aimed at strengthening our asset base, improving cash flow and enhancing quality of earnings.

We took the bold steps of shutting down our PET PT assets in Rotterdam, PTA assets in Canada, EU assets in Australia and others where already impairments were taken in second quarter twenty twenty four. These actions, as I mentioned earlier, are already yielding results with initial fixed cost saving of $48,000,000 realized in 2024, on track to achieve a saving of $160,000,000 to $170,000,000 per annum, which will basically translate into an EBITDA upliftment of $130,000,000 to $140,000,000 per annum by twenty twenty five-twenty twenty six. Alongside this cost savings, operating rates improved to 82% in second half twenty twenty four and four ninety five manpower reductions achieved in 2024 on these sites. This excludes the people which we are further rationalizing in the fiber business. We also anticipate a one time cash inflow of $150,000,000 to $200,000,000 from land sales related to this rationalized assets.

Now, these are not accounted at present. This will be accounted on cash basis except for Rotram where we have accounted for $51,000,000 as a firm agreement is getting reached with the buyer. We will further provide update on iVIL two point zero in our coming CMD next week. Now, let us see our results in 2024 in more details versus ’twenty three. As I mentioned, I will deliver 2024 adjusted EBITDA of $1,520,000,000 which is increase of 10% year on year from the performance against the performance year of 2023.

As I mentioned, supported by a reduction in destocking challenges, a moderate recovery in volume growth by 4% and fixed cost saving from rationalization efforts. If you look at segment wise, CPEC performance improved benefiting from a stronger performance in the Specialty Chemicals. Cost savings from rationalization efforts helped offset the softer China benchmark spreads, as you know, China benchmark spreads have been very weak, demonstrating the effectiveness of our ongoing efficiency initiatives. Despite external market challenges, strategic cost controls and specialty product strengthen helped maintain the profitability of this segment. Looking ahead, the segment expects improved earnings supported by further fixed cost reduction as you will get annualized benefit from asset rationalization.

Intermediate chemical performance got impacted due to lower MTB margins because MTB margins dropped, but they were offset with improved integrated MEG margins due to Shell (LON:SHEL) Gas advantage. Indovania delivered a strong performance with adjusted EBITDA up 29% year on year. Sales volume grew 4% driven by destocking normalization and demand recovery in South America. So North America benefited from higher integrated margins, while South America saw gains from a stronger sales mix. OMA growth was supported by Crop Solutions and Home and Personal Care with an additional RMB100 million in licensing income from downstream products.

These are PO licensing. Now looking at the Fiber business, the growth in Fiber segment was primarily driven by improved lifestyle benchmark spreads. We have seen improvement in the Fiber benchmark spreads in China and higher volumes in all market segments showing positive momentum in all three verticals. Moreover, the segment was benefited from reduced fixed costs through various management actions. The consolidated fourth quarter adjusted EBITDA year on year was higher by 29% as you can see $358,000,000 from improved operation but lower quarter on quarter by 15% due to seasonality factors as you know fourth quarter is normally weaker.

Now, this is an important side to look reasonable breakup of IVL performance. Looking at performance on a regional level, in 2024, the company demonstrated robust regional performance across key markets. And I think there where the geographical diversity paid, you can see that Asia delivered a stronger performance, primarily supported by Better Lifestyle Fibers benefiting from improved PSF margins. CPET performance remained resilient due to increased volumes and higher premiums despite lower benchmark spreads. And Americas, which constitutes 70% of the IVL EBITDA, continued to be a core strength due to its consolidated and well protected market environment, which contributes nearly, as I mentioned, 70% of the EBITDA.

Operations in Indonesia, which is basically entirely in Americas, delivered relatively better results, while CPET faced some challenges in MTB performance, which were normalized and offset with improvement in integrated MEG margins. Meanwhile, the EMEA regions and you can see a big swing in EMEA regions, experienced a significant turnaround and this is the impact of our rationalization of this sector. So, the strategic asset rationalization CPET enabled the company to adopt a make or buy approach for PTA procurement, thereby replacing the high cost production with more cost efficient purchasing. And additionally, Fiber business achieved cost savings through transformation actions, further enhancing the region’s recovery. So, this gives you a reasonable break up of the earnings.

Now, I hand over to Muto to take us through the CPET performance. Thank you.

Muthukumar, CPET Segment Co-Leader, Indorama Ventures: Thank you, Gwaljeet. Good morning, everyone. We will cover the CPET segment in specific. CPET, along with Intermediate Chemicals, delivered an adjusted EBITDA of R1,012 million dollars a solid 5% year over year increase, demonstrating our ability to navigate market headwinds while executing strategic optimizations as well as driving resilience through our management actions. Looking at combined PET here, which excludes IC, we will look at Intermediate Chemicals separately in a slide.

Without IC, we delivered an adjusted EBITDA of $768,000,000 as you can see here. Overall, stronger Specialty Chemicals performance, as we saw earlier, and the cost savings is quite important from the asset translation helped offset the weaker China benchmark spreads, which dropped about $22 from $23 to $24 Now integrated pet was focused on managing the oversupply while enhancing efficiency, delivering R596 million in adjusted EBITDA, which is a drop of 4% year over year. Agile management actions, including R47 million in fixed cost savings from asset ration station and stable PET sales volumes minimize this impact from the oversupply situation and the drop in industry benchmark spreads. As we discussed earlier, we see the full benefit of the resuscitation coming in 2025, ’20 ’20 ’6. The resuscitation efforts, as you all know, in 2024, a lot of it was focused on the CPET, this business, resulting from a comprehensive review of make or buy opportunities for PTA and the evolving industry landscape.

Our management maintained PT sales through these efforts with volumes improving by 1% on a like to like basis through the year, underscoring resilient end market demand. 23% globally, there was a contraction in demand, which significantly improved and 24% and we are estimating a growth of about 6% globally on the PET demand including ARBIT. Looking ahead, 2025 will see full benefits of this rationalization efforts, including further fixed cost savings and a one time gain of approximately R100 million from planned land sales from these rationalized assets. Now looking at packaging, this vertical gave stable margins in a high value business with an adjusted EBITDA of $98,000,000 which is a drop of 5% year over year, but a gain of 9% from volume growth as well as cost reduction measures were offset by reduced spreads due to the sharp devaluation in Nigerian and Egyptian currencies. Despite this, the business maintained a healthy EBITDA margin of 20%, reinforcing its position as a high margin value driven segment.

Now looking at the Specialty Chemicals, this is a really strong turnaround story with adjusted EBITDA surging from 7,000,000 in ’twenty three million to R74 million in 2024 and there has been a growth both in volumes and spreads and lot of the benefit also came from the management actions taken on improving operational efficiency and market strategy. We will have some more detailed discussion on Specialty Chemicals in the next slide. Now looking at the recycling, this vertical reported marginal improvement in performance this year, driven by higher volumes and lower energy costs. Similar to Specialty Chemicals, what we did last year, we have formed a new dedicated management team for the recycling vertical in order to bring more additional focus and forming a strong platform on recycling for future value creation. We just wanted to show highlight what turnaround has been made on the specialty chemicals on this slide as a case study, let us say.

Specialty chemicals, which is we talked about this turnaround and this the reason why we want to show is also to demonstrate our forward looking business plan for the next three years, which has been focused on developing our value added portfolio. And this slide, you can see the progress that we are making in that trend. Now after a low point in ’twenty three where the EBITDA was only $7,000,000 we’ve actively worked on making a significant recovery, which has shown the EBITDA increasing to $74,000,000 Now this has been driven by a clear focus on operational excellence, organizational capacity and agility, as well as the market strategy, how we are optimizing the product value mix and the value pricing. So on the operational efficiency side, we have, through our management actions, have enhanced the plant reliability and yields, ensuring more efficient operations as well as considerable reduction in fixed cost. As far as the organization concerned, we have reorganized to support innovation and growth, making our business more agile and responsive to evolving customer needs.

On the approach to market, go to market strategy, it is focused on value pricing and an expanded customer and application base, looking at several new applications and the high value applications in premium markets, leveraging on the strong partnerships that IVL has had with our global base of customers. Now, after this performance ’24, we do see even greater potential ahead for this vertical. With more than 400 customers, including large global brands, 39 patents and a solid pipeline of innovative products, With some of these new innovations, we have also shown us pictures here. We are actively pursuing new levers for further growth in specialty chemicals and we will make sure that this momentum continues. With that, I’ll hand it over to my co leader, Kumar Latta.

Kumar Zadha, Intermediate Chemicals President, Indorama Ventures: Thank you, Muthu. In 2024, Intermediate Chemicals delivered an adjusted EBITDA of $244,000,000 reflecting some stability amid market adjustments. The segment saw good performance in Integrated MEG and PEO business benefiting from improved Asian MEG margins and a sustained shale gas advantage. However, MPV business did face some headwinds as industry margins normalized from a record high in 2023 declining from $651 per tonne to $445 a tonne impacted by new capacity additions. On a quarterly standpoint, in the fourth quarter of twenty twenty four, Intermediate Chemicals reported an adjusted EBITDA of $49,000,000 marking a 31% quarter on quarter decline that was driven by seasonal shift in MTBE spreads, partially offset by normalization of gas cracker operations.

We saw MTBE performance soften as spreads fell from $460 a tonne in the third quarter of twenty twenty four to $249 a tonne in the fourth quarter of twenty twenty four, mainly due to the seasonal demand weakness and higher winter heating related feedstock costs. Integrated MEG and PEO rebounded quarter on quarter supported by the consumption of the gas cracker operations. Thank you. Now I hand it to Arasya, who is joining us online.

Alastair Ram, Executive President, Indorama Ventures (Indovinia): Thanks, Kumar. And good morning, everybody. Indevinia delivered a there’s quite an echo.

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: Is that okay?

Alastair Ram, Executive President, Indorama Ventures (Indovinia): I’ll keep going. Innoventia delivered a strong financial performance in 2024 with adjusted EBITDA rising to $352,000,000 which was a robust 29% year on year increase. The sales volume grew 4% year on year, primarily driven by the destocking normalization and demand recovery in South America. And this all supported a very positive momentum. The North American portfolio benefited from improved integration margins, while the South American portfolio had a marked boost from improved sales mix towards higher margin products.

Overall, each end market contributed to contribution margin growth year on year, driven primarily by the Crop Solutions business and Home and Personal Care. In 2024, there was an additional licensing income of $11,000,000 from downstream products, as DK mentioned. Management action on the Australian facility has been completed in 2024. This brought fixed cost reductions of $1,000,000 in 2024. However, we should see $15,000,000 in 2025 on ongoing.

The segment continues to serve our Australian customers through a trading model from its global network of sites, including India, from which benefits are to be reflected in our 2025 results. The segment continues its trajectory towards specialty offerings with an agreement signed in 2024 to acquire two well known brands from Cargill for the energy and resource market. These will augment both product offerings and also enhance our margins. Our strategy remains focused on driving sales growth and expanding our market presence, while internal transformation initiatives continue to unlock value. This disciplined approach reinforces our foundation for sustainable growth and long term success in Indovinia.

So as you know, Indovinia’s portfolio is primarily driven by our HPA product portfolio. This makes up about 75% of our sales volume and delivers an EBITDA margin of about 18% in 2024 and 17% in Q4. Our Essentials business, which accounts for the remaining 25% of sales volume, is closely integrated with the production of these HVAs, creating operational synergies. The Essentials portfolio follows the commodity lifecycle and will gradually improve as the upcycle gains traction. In 2024, Essentials have shown a significant improvement year on year amid ongoing market challenges.

As we think about our market segments, Home and Personal Care, the demand remained resilient. The segments benefited from the launch of new products and optimized sales mix, which have collectively accumulated and enhanced profitability. On our Crop Solutions business, year on year growth was supported by favorable post destocking conditions and consistent supply service from Indominium, which is recognized for its competitive local positioning, particularly in facilitating last minute purchase decisions on low stock levels. These factors have contributed a notable increase in our market share. For Energy and Resources, despite operating in a more competitive environment in Q4, due to the resumption of operations of key competitors in The U.

S. Following a force majeure event, The segments continued to deliver solid sales performance. In Coatings and Construction, this segment experienced year on year growth, driven by recovery market and increased market share, along with a better product mix. Thank you. I’ll hand over to my colleague, Diego.

Diego Bory, Executive President, Indorama Ventures (Fibers): Good morning. Good morning, everybody. In 2024, Fiber segment delivered an adjusted EBITDA of $159,000,000 reflecting a strong twenty six percent year on year growth and 57% year on year if we exclude the one time insurance payment that impacted positively 2023. The growth was primarily driven by improved industry spreads in the Lifestyle and higher volumes across all market segments. Let’s now break it down by market.

In Lifestyle, we achieved a significant improvement with adjusted EBITDA of 40,000,000 marketing robust to two zero five year on year growth. This was driven by improved fibers industry spreads and 5% year on year increase in volumes due to higher demand. The European restructuring of our Lifestyle business announced in Q3 will consolidate the Filament assets, enhance operating rates and reduce fixed cost by $13,000,000 The machine relocation has begun and expected to be completed by Q2 twenty twenty five. In the Aegean market, we’re reporting adjusted EBITDA of $47,000,000 which is an increase of 17% year on year, driven by rising volumes and higher margin by using competitive raw material from Asia. In Mobility, we delivered an adjusted EBITDA of $72,000,000 a 50% increase from the previous year, excluding the one time insurance payment and this is an all time performance year for us.

Growth was driven by a replacement tire demand. OEM demand remained weak, though a rebound has been observed in recent weeks supported by government stimulus in China. Management action on fixed cost optimization are yielding results with $19,000,000 year on year reduction net of inflation. As of now, all fixed cost reduction do not yet include savings from our plan for Plan Asset rasionalization activities in this segment, which will be implemented in 2025. Back to you, Dike.

D.K. Agarwal, CEO, Indorama Ventures: Thank you, Diego. So now let’s look at the summary of the results from 2023 to ’twenty four. I think you heard all the business segments. And this bridge shows you the complete what management actions have been taken and what industry impact has been there. In 2024, as we mentioned, achieved an adjusted EBITDA of $1,520,000,000 making an improvement from $1,390,000 in 2023.

This growth was driven by $122,000,000 increase in volumes across all segments as you saw presentation by other segments, supported by recovery in demand following the ease of destocking situation and commercial excellence. So not only value pricing and the volumes what we got back into the system. As I mentioned, industry benchmark spreads had a negative impact of $131,000,000 largely due to weaker spreads in Integrated Pet and MTB, which is normalized from record high in 2023. So, you can see an impact of an MTB of $144,000,000 and integrated pet of $99,000,000 and a positive and integrated MEG by $86,000,000 and $19,000,000 in the filer. So, basically, if you summarize, the MTB loss was offset by the integrated MEG spread.

So, the industry impact was $131,000,000 The contribution margins improved our EBITDA by $60,000,000 mainly driven by lower energy prices as energy prices were lower. On the last bucket, our asset rationalization efforts have started to yield benefits, contributing $48,000,000 in fixed cost reductions, which is from the shutdown sites and as I mentioned another $100,000,000 will roll in $25,000,000 Management actions and inflation control measure further supported a $35,000,000 reduction in fixed costs. So total was nearly $83,000,000 Our broader transformation journey enabled us to offset cost inflation while the depreciation of emerging markets currency further contributed to the cost reduction. These combined efforts reflect our strategic focus on driving operational efficiency and enhancing earning resilience amid market volatility. Now let’s look at how our debt profile has evolved.

In 2024, IIL generated $1,335,000,000 as a cash flow from operation. Now, of which 110,000,000 was used for one time severances and related expenses on shutdown sites and $229,000,000 was spent on higher short term working capital due to higher year end inventory caused by supply chain disruption due to Red Sea crisis, particularly as I mentioned in CP Tech segment. These extra working capital outflow is expected to reverse as in 2025 as the supply chain stabilizes. And as I mentioned, CPET has nearly R300 million impact and which we expect to recover soon. As a result, the reported operating cash flow was nine ninety six million dollars of which $713,000,000 was allocated to maintenance CapEx and financing costs, including perpetual interest.

The remaining $257,000,000 free cash flow for IVL shareholder helped reduce net debt from $6,840,000,000 to $6,580,000,000 After dividends and growth CapEx, net debt stood at $6,890,000 similar to the start of the year and a one time deferred payment of $150,000,000 for the 2022 Occiteno acquisition increased the net debt to $7,000,000,000 In 2024, we were affected by volatility of exchange rate movements on Thai Baht denominated debt. To provide a clear understanding, we have shown net debt after removing such exchange impact. Management actions remain focused on generating free cash flow and anticipates growth in twenty twenty five and twenty twenty six driven by management actions, volume improvements, proceeds from the sale of land of rationalized assets, plant IPOs as we mentioned and divestiture, leading to net debt reduction in line with the strategic goals. So, if you see, nearly $500,000,000 of debt got increased due to three factors. One is the net working capital outflow of two twenty nine, one hundred and 10 million dollars of severances and $150,000,000 of one time OX TNO payment.

So, these are one time effects and the working capital we hope to release very soon in ’twenty five. Now at the end of twenty twenty four, our net adjusted net debt equity stood at 1.3x free time with a DSCR of 1.32x. Our adjusted net debt equity calculation excludes non operating debt on the assets with the work in progress and the impact of lease liabilities and non cash exchange rate movements in debt and equity to ensure a more accurate reflection of our financial position by removing non cash accounting adjustments. We maintain, as you can see, a balanced debt structure with 47% fixed and 53% floating, providing flexibility to optimize financing cost as interest rates stabilize at peak levels across major markets. With benchmark rates expected to decline globally, we saw a decent reduction in Thailand by 25 basis points yesterday.

We are well positioned to benefit from lower interest costs in the years ahead. We have successfully completed during 2024, refinancing of $1,800,000,000 through bank loans and issuance of Thai bond debentures, achieved in cases of debt maturity profile and saved interest costs by $10,000,000 to $11,000,000 per annum. This has also allowed us to extend our repayment profile, which is now spreading over ten years with longer average maturity of four point five years. We already have a 2025 refinancing plan, which is progressing very well with a focus on further extending debt maturity while securing lower spreads. We have further planned $1,900,000,000 of refinancing in ’twenty five, mainly for recapitalization of Indovina prior to IPO and listing.

The term sheets have been already negotiated with the bankers. The funds will be utilized to repay outstanding long term loan and extend repayment profile. So right hand side what you see the long term debt repayment schedule is after debt refinancing. So what is important that we maintain in this difficult time, a strong liquidity of $2,100,000,000 at the end of twenty twenty four, providing financial flexibility to navigate the market conditions and support our strategic priorities. It’s important to understand little bit impact on our equity, particularly at the end of the year as the Brazilian real was very weak.

Our equity was impacted by non cash exchange rate movement as we have investments in dollar and Brazilian real. Hibach strengthened against Brazilian real by 7% in fourth quarter twenty twenty four and twenty two percent over the year, contributing a total negative equity impact of $4.00 $9,000,000 in 2024. This impact, as you know, is a non cash translation loss, is temporary and has started to reverse in first quarter twenty twenty five, following the current weakening of Thai Baht against USD and Brazilian Real. We are reviewing our financial policies to minimize the impact of FX rate movement such as in Brazil where the currency weakened substantially, affecting our closing net debt and other comprehensive income. Our ESG linked financing accounts for 30% of the total debt, reinforcing our strong alignment with sustainability focused financial strategy.

This reflects our commitment to integrate the ECG principles into both our operations and capital structure as a part of our long term financial roadmap. We didn’t look great in working capital. So that’s the area where we should need to address. Our working capital days increased from eighty two to eighty eight days by year end, as I mentioned, due to higher year end inventories caused by supply chain disruption due to Red Sea crisis, particularly in CPET segment. This resulted in a working capital outflow of $229,000,000 which we expect to normalize in ’twenty five and further improve while leveraging on digital tools like IBP.

As you can see, CapEx is another key focus area to improve the free cash flow where we’ll invest only in sustainability and high return projects. Most of our further spending will go towards essential maintenance to ensure operational reliability. In 2024, total CapEx was 190,000,000 lower than the levels announced in CMD in March. As you can see, it is $470,000,000 versus $6.60. Looking ahead, we remain committed to optimize working capital, strengthening cash flow, deleveraging the balance sheet and maintaining disciplined capital allocation.

Now, let’s summarize sorry, there is another slide here. As you might have heard, Indorama Venture is pleased to announce a 24.9% minority investment in EPL Limited, a listed company in India, who is a leading global packaging company. Through our subsidiary INB, we will acquire this strip from Blackstone (NYSE:BX) for approximately $220,000,000 which is Typar seven point four four billion dollars and INR two fifty per share. EPL, as you can see on the slide, is a global leader in innovative packaging producing over 8,000,000,000 tubes annually with $498,000,000 revenue as reported last time and $97,000,000 EBITDA for 2324. The company operates 21 manufacturing facilities across 11 countries, serving blue chip customers across three key product segments.

EPL’s strong market position, innovation driven approach and sustainability focus complements IVL’s global strategy. This transaction is expected to be completed in the next few months after they start pre approvals. IVL remains focused on enhancing shareholders value through disciplined capital allocation. So, let’s summarize introspection of 2024 performance as you know we’ll be soon meeting for CMD. The chemical industry remains very challenging due to overcapacity and benchmark margins remaining below cash cost as you’ve seen across all the chemical industries, olefins, aromatics to binaries.

Alastair Ram, Executive President, Indorama Ventures (Indovinia): We

D.K. Agarwal, CEO, Indorama Ventures: are happy that timely management actions in rationalizing high cost assets help in mitigating industry headwinds. We are proactively navigating these complexities through IVL two point zero with a strong focus on organic growth, operational efficiency and financial discipline. Cost efficiency and operational optimization supported by asset rationalization and Olympus two point zero will help maintain our first quartile cost production and we will continue to look at it as mitigating the impact from industry headwinds. So, we are not dependent on revival of the margins. Digital transformation initiatives, including SAP S4HANA, AI driven optimization will further enhance operational efficiency, streamline supply chain and improve decision making.

Improvement in destocking, as you saw, situation in all the business segments, along with the commercial excellence led to volume recovery across all businesses. Our working capital days increased from eighty two to eighty eight days by year end, as I mentioned, due to higher year end inventories, particularly in CPET segment. This resulted in working capital outflow of $229,000,000 and we expect this to normalize in Q5 and further improve by leveraging on digital tools. As I mentioned, we remain committed to financial discipline, ensuring cash conservation and strategic capital allocation across all businesses. Overall, as a summary, I would say management is pleased with the company’s performance in 2024, notwithstanding the challenging industry environment.

The past year marked a historical milestone in Lindero Ma Ventures’ journey as it leaned into the fundamental industry shifts and sought boldly to take advantages of the changes. The company has transitioned from its legacy asset acquisition model and management is now focused on directing the pace of transformation in a more mature phase marked by organic growth, cash flow generation and new era of partnership towards long term sustainable growth. Lastly, I’m pleased to invite you all to our Capital Market Day on March 5, where we’ll provide deeper insight into our strategic roadmap and long term growth trajectory. We look forward to see you at CMBN. Thank you for your patience.

Now we can take your questions, please. Thank you.

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: Thank you. Audience, you can raise your hand and then I’ll invite you to ask your questions. In the meantime, so Aristide is joining us for the Q and A. While we wait, I got one question online. It says that if the Russia war ends, what kind of impact do we estimate ideally?

D.K. Agarwal, CEO, Indorama Ventures: Yes. If the Russian war ends, naturally, as you know, the Russian crude has been flowing into China, India. There has been an impact in the refinery operations in the diesel because the diesel crack margins went up. Naturally, we see the refinery still remain under pressure. But from IBL perspective, we don’t see except the momentum in the oil price because as you know, Russia, we have a very we have a hygiene business, which is quite profitable and we continue to run those operations.

So, I don’t see any major negative or impact rather it will help in the recovery in the European demand. Diego, you want to add something?

Diego Bory, Executive President, Indorama Ventures (Fibers): No. As you said, we have an unwoven operation in Russia. I think the awards end, I think it would be positive for us. We’ll be able to get some of the demand that this plant used to supply and we will also have less difficulty to find workers, which is one of our biggest issue today and some stabilization in raw materials. So overall, for the Agilent (NYSE:A) business, that’s a few million dollars positive.

Muthukumar, CPET Segment Co-Leader, Indorama Ventures: Maybe then, that’s you.

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: Thank you. Kunning, I can see that you have raised your hand. Can you ask your question?

Kunning, Analyst: Yes. May I ask how much is the cost saving that reflect in the fourth quarter results and compared to the third quarter? And the second question is, what is the situation of the Crop Solution or the OSERVIX segment on FosuFactsen? Because the EBITDA, we see quite a drop in the fourth quarter and could you give the outlook for the first and second quarter of the year? Thank you.

Napath, Analyst, CSSA: So I

D.K. Agarwal, CEO, Indorama Ventures: think the first question if I got correct, the fourth quarter fixed cost timing, right? Yes. So So that is about how much it

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: is, Vikas? Yes. So the total fixed cost saving for six months in third and fourth quarter is $48,000,000 and the third quarter was $19,000,000 and the rest has come in the fourth quarter.

D.K. Agarwal, CEO, Indorama Ventures: And as I mentioned that next year we will have the full year fixed cost saving, which will be nearly incremental $100,000,000 As you know Australia, Canada, Rotterdam and Pulte Kal. I’ll leave now to Alastair to address the Crop Solution question. Alastair, please. Alastair, you are on mute if you are speaking, sorry.

Alastair Ram, Executive President, Indorama Ventures (Indovinia): Thanks, DK, for the reminder. So the fourth question was the drop in EBITDA and then what do we see in quarter one. Is that correct?

D.K. Agarwal, CEO, Indorama Ventures: Yes, the Crop Solutions drop in

Kumar Zadha, Intermediate Chemicals President, Indorama Ventures: the first quarter EBITDA, right?

Alastair Ram, Executive President, Indorama Ventures (Indovinia): Yes. So normally, the Crop Solutions business works on seasons. In Q4, it’s the normal ramping down of the end of the crop season in South America. And Q1 and Q2 are normally the peak seasons for crop season in North America. So you see the North And South Hemispheres changing.

I think what we saw was, I mean, it wasn’t a bad quarter at all based on ’twenty three versus ’twenty four. So still a very, very good quarter, I think. But we did see that tail off as we were expecting. So it was nothing that we weren’t surprised at. Q1, I think, is starting off reasonably strong.

We’re only halfway through the quarter, so it’s a little bit early to give any forecasts. But we’re seeing some pretty good demand coming through. But obviously, that will be in North America. South America will kick in on quarter three quarter four again next year this year, sorry.

Kunning, Analyst: Sorry, can I ask further? So we would see Indonesia to report a better EBITDA in the first quarter compared to the fourth, right? And also the second because you said the first and the second quarter could be the peak season for Surfactant?

Alastair Ram, Executive President, Indorama Ventures (Indovinia): Yes. What we normally see is Q1 and Q4 being the weaker quarters and Q2, Q3 being the stronger quarters. So that’s our normal profile. Q4, obviously, is people are destocking and getting their stock levels right for the year end and then the end of the crop seasons. And then Q1 is the normal ramp up into the North American season.

So what you see is Q1, Q4 being the weakest quarters, Q2, Q3 being the strongest quarters. That said, we’re seeing Q1 starting off quite robustly. Given we’ve had a winter challenge in North America as you will have bread, that’s had some impact. We’re still expecting Q1 to be quite strong.

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: Thank you. I’ve got one question online. It says that, can you explain more on the temporary CPET supply chain disruption that we have seen in the second half? Can we little bit more expand on that?

D.K. Agarwal, CEO, Indorama Ventures: Mathur, this is a question for you to recover $300,000,000 Go ahead and explain well.

Muthukumar, CPET Segment Co-Leader, Indorama Ventures: Yes. So when this Israel Gaza war started, of course, lot of shipments got diverted through the Cape Of Good Hope instead of Red Sea, which resulted in a significant increase in the transit times from thirty to forty days to almost eighty days plus in some of the vessels even took one hundred days. So there was a significant impact to the transit time and thus the working capital. The other reason was also because the uncertainty of volatility in the transit times also. So that resulted in unexpected increase in working capital.

Now what we have done is we have streamlined those as much as possible through dedicated charter vessels so that we have a better control on these transit times, even going through the Cape Of Good Hope. But for the past few weeks, there has already been lot of shift from the Cape Of Good Hope to Red Sea. And now with a lot more improvement and progress on this settlement, then there is more and more vessels now going through the Red Sea. There are still some operators who still are avoiding risk and going through Capa Fulfo, but major part is already shifting to Red Sea, which will then directly reduce the transit time for our imported material. And that is what Mr.

D. K. Was mentioning that should help us to reduce the working capital and release it during the first quarter. Hope that answers your question.

D.K. Agarwal, CEO, Indorama Ventures: Yes. And we’re very hopeful to get it back. As you know, we rationalize our assets. So we went into PTA buying mode than the manufacturing in Odram, which actually further aggravated the situation. And then, Smutu explained the transit time now and the entire planning is being very rigorously being looked into it.

So we hope to release this, what we can tell you.

Muthukumar, CPET Segment Co-Leader, Indorama Ventures: And that is both for Europe, the make versus buy PTA, but also we have a large operation in Egypt and that cargo is also going through the same dynamics. So it should help quite a bit both in Europe as well as for our Egypt from material imports.

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: Thank you. Since we are on CPET, so I’ll take the question on CPET. So Sonja is asking, can we provide a breakdown of our EBITDA in region? So he’s asking for PET, but I think we have overall IVL that we can show. And then what is the indicated breakeven cost for MTB EET?

And the third question is that the Chinese petrochemical can operate because they’re getting a cheaper petroleum from Russia. So, can we further explain on the Chinese petrochemical situation?

D.K. Agarwal, CEO, Indorama Ventures: Good. So, I’ll take one of the question on the China’s petrochemical situation. I think that China do have a very huge overhang of the entire petrochemical. When you talk of olefins, you talk of integrated PET aromatics, which the capacity has got built up. Today, as you know, olefin, the world capacity utilization is 80%.

So, we do see these challenges of overcapacity in China continuing. But as you know, our business has been geographically diversified model. We have been working on lot of trade barriers and naturally, America’s business is highly protected, so Chinese products cannot go. But this challenge on Chinese will continue. I don’t think we have a breakdown from CPET EBITDA, but you can see from here that 70% of IVL EBITDA is predominantly made in Americas, which is U.

S, Mexico and Brazil. And maybe the third question was breakeven cost of MTV. Kumar, you want to take that?

Kumar Zadha, Intermediate Chemicals President, Indorama Ventures: I think we’ll revert on that point, get back to you with the breakeven on the cost of MTV.

D.K. Agarwal, CEO, Indorama Ventures: But just if I can add, how do we make MTB? MTB is made from butane, it’s a PO MTB technology. So basically a byproduct of PO is TBA and we make butane and methanol and then MTB. So you see the MTB margins seasonally in fourth quarter are weak because you blend basically butane in the gasoline pool and which gets corrected in first quarter, second quarter. And then you see when the blending stops, the butane as a percentage of oil comes down significantly.

So you see always quarter by quarter, second quarter, third quarter earning bigger and it is also because the refinery margins in second quarter, third quarter are high and this Optane is linked to the refining margins and it has a premium over it. So, I think the predictive cost we can provide you more specific data, but yes, the margins in fourth quarter will remain under pressure. And this is basically a PO MTB combined. And it still contributes, as you saw, the quarterly EBITDA even at the weak MTB margin.

Muthukumar, CPET Segment Co-Leader, Indorama Ventures: And maybe just to add on this Chinese use of cheaper crude. One dynamic that we have seen is as compared to the peak refinery margins in 2024, towards later part of the year, they have been reducing. So the refinery margins are not as robust as before. And how that is relevant is because of one third of the Chinese capacity, PET, is fully integrated, then it should have less impact on the subsidization of downstream spreads on PET. So, that is directly linked to that.

D.K. Agarwal, CEO, Indorama Ventures: Got it. Good, Bhutto. So, because we have that integrated slide, I think this is an important point, which is that today the entire polyester value chain margin has compressed. You see this is a refinery margin which has compressed, but we have another slide, Vikas, where it compressed entire polyester value chain margins, whether it is paraxylene, PTA, PET are compressed, they are much below the cost, people are losing money. So, question is how they became sustainable.

So, these are typical problem right now of the industry.

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: Thank you. I can see Napath from CSSA. Can you ask your question For Napath?

Napath, Analyst, CSSA: Hi. Thank you for the presentation. Since we were talking about the PET industry, I may have one more question on PET. So what is the industry situation of the PET in China? Because I remember that we were talking about the declining of the upstream PX spread will pressure the Chinese producers and which they will they should we should see them cutting their run rate.

And looking at the spread in January and February, I think it’s down quarter on quarter quite a bit. So I wonder when should we see, how is the industry situation in China here?

D.K. Agarwal, CEO, Indorama Ventures: Yes. Muthu, you can take that question, please.

Muthukumar, CPET Segment Co-Leader, Indorama Ventures: Yes. If you can go back to that slide, Vikas, the one that we are just showing. So here, we have provided the quarter wise margins and operating rate up to December of twenty twenty four or fourth quarter. You are absolutely right that after peaking in November and December, the integrated spreads have come down considerably in January and February. Now that has been driven mainly because a lot of the capacity, new capacities came on stream that part of the year.

And a large part of that capacity addition is also fully integrated by the Rongshan Group. So that has resulted in this drop in margins. The other reason is also because the Chinese New Year was earlier than usual. So many of the manufacturing units, they took the shutdown earlier than planned and they have not, I mean, there has been a deferral in their restarting. So, combine these two, the margins have declined.

Now, what we are seeing is that after the inventory levels increased because of these reasons, now with the units starting back up and the downstream demand coming again, then the inventory levels should start reducing and the operating rate should start improving. So now you’ll see that the operating rate which went highest in, I mean, high in Q4 that has come down below 70%, that is expected to now start going up again. And that should help march onwards with the seasonal demand coming downstream units starting back up. Then we expect improvement in the margins from these lows. Overall for the year, we expect similar margins, integrated margin as 24.

We don’t expect a large improvement on an annual basis. But from the current levels in January, February, certainly we should see an improvement. And the other reason is if you go to that capacity addition, Vikas, so this will show you that the peak capacity addition already happened in ’twenty four. But you can see here almost 5,000,000 tonnes of capacity got added and lot of that came during the second half, the effective basis. And that is what resulted in this temporary.

Now 2025, if you see that is dropping quite a bit and in ’twenty six, it’s less than 1,000,000 tonnes. So going forward, this although the capacity overhang will be there, the sharp drop in addition of new capacities that should also help on the spreads. But overall, as I said earlier, ’25 on an annual basis, we expect to be similar to ’24. Hope that answers.

Napath, Analyst, CSSA: Yes. Okay. One more question, maybe Kunde Ke can address this issue. I think about the asset divestment that we the asset that we incur last year and then we are thinking of divesting those assets. I wonder is there any update on this?

D.K. Agarwal, CEO, Indorama Ventures: So, I think that is, as you can see, our asset divestment, we are expecting $150,000,000 to $200,000,000 1 time cash flow. Rotterdam, we already agreed for a sale of our land and the jetty. The plant and machinery is still being discussed. So, that will get and that’s where the $51,000,000 was accounted in fourth quarter auditors’ reverse rate, but no cash flow came in. Then another big piece is Australia Land, which has a significant value in terms of $100 to $110,000,000 Canada land.

So, all this $150,000,000 to $200,000,000 cash we expect to realize in 2025 and latest in the first quarter, RMB ’2 thousand and ’6. So it’s going divestment is going as planned of the shutdown assets. And in addition, as you know, we are looking at divesting certain core assets. So that will keep you updated in the Capital Market Day.

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: Need. I can see some more questions which are related to more petrochemicals and CPET, so I’ll take them first. So, Koonjakapong, we are asking that can we give a guideline on related to the new pricing of contracts in 2025? There’s another question that what is the change in U. S.

Policy on petrochemical imports to U. S, the tariffs and restriction, that’s across our ABL. And the third one from Datapong is that was the progress of listing the packaging business.

D.K. Agarwal, CEO, Indorama Ventures: So, I’ll take the couple of them and then I’ll ask Muthu to cover. So, U. S. Imports tariff fuels positive for IVL. As you know, let’s understand that U.

S. Has paid deficit in terms of PET, nearly a million tonnes comes. Even from Mexico, there’s a lot of PT and PET comes in. We don’t know yet that whether the duties will be slapped on the Mexico and Canada. So naturally, this will have a positive impact because U.

S. Operating rates will go up. Also, we see that de minimis imports there are some duties like diapers and all that end products. We also see this will help in the fibers business. So, overall tariffs will certainly help in entire I Wheel business portfolio.

Listing of packaging business is on track. We are working on it. As you know, the packaging business has delivered consistent EBITDA. We have growth plants, we have building plant in Tanzania, we are looking at other countries. So that is targeted in first quarter twenty twenty six raising $250,000,000 The third, on the new contract pricing, I think U.

S. Is on the North America is on the positive side, But let Muthu answer that question in more detail. Thank you.

Muthukumar, CPET Segment Co-Leader, Indorama Ventures: Yes. Thank you, Golgi. Yes, on the contract side, we have been able to lock in the contracts as we had planned in terms of volumes and projected the growth in demand should support that. In terms of margins, Americas, certainly 25 versus 24, we see an improvement. In case of Europe, where there is also a large contract volume, also in the base spreads, we have been able to improve from 24 to 25.

However, as you know that Europe also has a lot of influence from the Asian spreads, what happens on the Asian spread as well as on the freight rates. So that we will need to closely monitor. But overall, based on the dynamics, we’ve been able to improve the base spreads in Europe as well. And just to add on what the Trump administration, the new regulations and the tariffs that are coming in. If you look at CPET, maybe I can break it into, let’s say, three, four factors.

One is on the material flow that is coming into U. S. On PET and PTA. Ideal does not have direct exposure on that as compared to some of our peers. So, any tariff or disruption to that should help us as a large domestic player.

Now, if there are going to be any cost increases on feedstock further upstream, that we should be in a position to pass it through to the customers either through change in the published indices or other pass through mechanisms we have in place. So that should be overall positive for IVL in U. S. Now we are also carefully monitoring how the retaliatory measures would impact our business. So it is not only the tariffs that U.

S. Is putting in place, but also what happens if the partners, trading partners, add the retaliatory measures. So we are already taking actions to first to make sure that there is no disruption on our supplies to our customers, but then also how we mitigate any type of cost impact. The third factor is that because of the change in the approach of the U. S.

Administration, which basically is becoming more protectionist, we expect many of the other countries and we do see that taking similar approach, ensuring fab trade and that the domestic industry is protected. And this should help IVL because of our presence, domestic presence, large domestic presence in key markets in terms of tariffs or trade measures, then those markets you should directly benefit us. And the last one I just wanted to highlight is also you almost have also seen the announcement of tariff, increased tariff, 25% on aluminum and steel imports. And as compared to the last time, this time, it is also including countries which have FTA, free trade agreement with U. S.

So we are monitoring that and we believe that based on some of the comments made by large brand owners, we expect some type of pivoting shifting of demand if it continues to PET from aluminum. So we will continue to monitor that and see what we need to do to take benefit from that. So those are some of the areas how we are managing the new approach.

D.K. Agarwal, CEO, Indorama Ventures: Thank you, Madhu. And I think the last one is quite important. As you know, the aluminum constitutes constitutes nearly about 50% of the CSD sales in U. S. And you’ve seen the comments.

So let’s keep the fingers crossed. Thank you.

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: Thank you, Muthu, Mr. Agarwal. So Kaushal, thanks for your patience. So for Macquarie, so asking question, given focus on deleveraging for IVL, what are the thought process on the IEPL investment? What would be the guidance for further growth CapEx in ’twenty five?

And as the accounting question, the cash conversion cost in fourth quarter twenty twenty four dropped significantly. Can you please give some color on the cash conversion cost in the fourth quarter?

D.K. Agarwal, CEO, Indorama Ventures: So, on deleveraging, I think as you know, the IVL is committed on our deleveraging of debt over EBITDA of below three times. So, our IPOs of Indovina and packaging and also the divestment, we are working on that. Naturally, this year, we could not deleverage because of the working capital increase. As you saw $229,000,000 severance one time of $100,000,000 and $150,000,000 Otherwise, we would have been deleveraged by $500,000,000 On EPL investment, it’s a minority stake in the high growth market. As you can see, it’s a very strong business.

We don’t have any plans to further invest in this business and have this minority stake. As far as growth CapEx is concerned, you are seeing that 100 and we reduced as compared to $24,000,000 1 hundred and 90 million dollars 20 5 million and 26 will provide you update in CMD, $25,000,000 is going to be higher because there are three turnarounds. One is for iWOG, which is the LACO plant, iWOL, which is a clean packer plant and MTB, which comes in once in five years, but we’ll give you further update. I didn’t understand the third cash conversion cost or

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: the third conversion? Yes. So, this is a clarification. This is cash conversion. So, operating cash flow to EBITDA in the fourth quarter, that’s working capital?

D.K. Agarwal, CEO, Indorama Ventures: Yes. So, OCF conversion has been poor. As you know that our working capital deployment of $229,000,000 has been a big hit for us. And although if you take below before that is $1,300,000,000 and I think this will improve as we release more working capital in the coming years. So you can see 1.335 for 1.4, but major hit has been this two factors, working capital flow and the severance payment.

So, this cash conversion ratio will certainly improve in coming years 2025, ’20 ’20 ’6.

Vikas Jalan, Investor Relations and Planning, Indorama Ventures: So I think we can close the meeting today and thank you very much for joining us and we look forward to see you on March 5 for our annual Capital Market Day event. It’s being held at Sofitel in Bangkok and for the overseas participants, you’ll get the online link to join it. Please do join.

Alastair Ram, Executive President, Indorama Ventures (Indovinia): Thank you. Thank you. Thank you

Muthukumar, CPET Segment Co-Leader, Indorama Ventures: very much. Thank you all so much. Bye. Thank you.

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