Kuwait, May 4, 2020 — The EQUATE Group, a global producer of petrochemicals and the second largest producer of Ethylene Glycol in the world, today announced its Q1 2020 unaudited earnings, reporting $250 million in EBITDA – a 15% decrease from $294 million in Q1 2019, and $729 million in revenue, an 18% decrease from $889 million in Q1 2019. Net income after tax stood at $97 million in Q1 2020, a 47% decrease from $183 million 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 of 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 the 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 utilization at (MTO) and (CTO) facilities coupled with demand pick up post COVID-19 should improve margins by Q3/Q4.”
ABOUT THE EQUATE GROUP
The EQUATE Group is a global producer of petrochemicals and the world’s second largest producer of ethylene glycol (EG). The Group owns and operates industrial complexes in Kuwait, North America and Europe that annually produce over 6 million tons of ethylene, EG, polyethylene (PE), polyethylene terephthalate (PET), styrene monomer (SM), paraxylene (PX), heavy aromatics (HA) and benzene (BZ). The EQUATE Group includes EQUATE Petrochemical Company (EQUATE), The Kuwait Olefins Company (TKOC), as well as a number of subsidiaries such as MEGlobal and Equipolymers. Their products are marketed throughout Asia, the Americas, Europe, the Middle East and Africa. The EQUATE Group’s shareholders are Petrochemical Industries Company (PIC), The Dow Chemical Company (Dow), Boubyan Petrochemical Company (BPC) and Qurain Petrochemical Industries Company (QPIC). Employing more than 1,500 people worldwide, the EQUATE Group is a leading enterprise that pursues sustainability wherever it operates through partnerships in fields that include the environment, economy and society. Visit www.equate.com.
This earnings announcement (the Announcement) is for information only. The announcement is based on unaudited financial information of EQUATE Petrochemical Co. K.S.C.C. and The Kuwait Olefins Co. K.S.C.C. (together with their consolidated subsidiaries, the EQUATE Group) which is subject to change without notice and the accuracy thereof is not guaranteed. The information in the Announcement does not intend to contain all material information concerning the financial status of the EQUATE Group. We do not make any representation regarding, and assume no responsibility or liability (however arising and regardless of nomenclature) for, the accuracy or completeness of, or any errors or omissions in, any information contained in the Announcement.
Historical and current performance data are not necessarily indicative of future performance. Information contained in this Announcement may refer to forward-looking statements. The views in the Announcement are based on current assumptions which are subject to various risks and may change over time, as such we make no representations in respect of the correctness, accuracy, and/or completeness of such assumptions. Further, no assurance can be given that future events will occur, and/or that projections (if any) will be achieved. Past performance is not a reliable indication of future performance. Actual results may differ materially from those projected. The Announcement shall not be considered, or in any way construed, as an offering of securities.