EQUATE Group announced its Q1-2020 unaudited earnings, reporting $250mn in EBITDA – a 15% decrease from $294mn in Q1-2019, and $729mn in revenue, an 18% decrease from $889mn in Q1-2019. Net income after tax stood at $97mn in Q1-2020, a 47% decrease from $183mn in the same period last year.
EQUATE’s facilities around the world continued to operate safely despite several external challenges, notably the global Covid-19 pandemic and huge swings in oil prices. The average price of ethylene glycol (EG) in Q1 was $473/MT compared to $625/MT in Q1-2019. Average prices of polyethylene (PE) in Q1-2020 were $828/MT compared to $1,044/MT in Q1-2019. The significant headwinds on pricing were offset primarily by the volume increase from the new low-cost EG facility on the US Gulf Coast.
Commenting on the results, Dr Ramesh Ramachandran, president and CEO of EQUATE Group, said: “The margin compression seen due to the lower naphtha prices and Covid-19-related demand destruction is expected to last through Q2. These low prices have seen reduced production at methanol-to-olefins (MTO) and coal-to-olefins (CTO) based facilities. The decrease in supply due to lower capacity utilisation at MTO and CTO facilities coupled with demand pick up post Covid-19 should improve margins by Q3/Q4.”
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