- EBITDA rises 129% in Q2CY’26 despite lower sales
- Combined PET EBITDA jumps 163% on wider spreads
Indorama Ventures Public Company Limited (IVL) reported a sharp improvement in second-quarter 2026 (Q2CY’26) earnings, supported by wider polyethylene terephthalate (PET) and chemical spreads, stronger commercial execution, and tighter operational discipline. However, cumulative production declined 10% y-o-y.
Production trends mixed across segments
Production performance varied across IVL’s businesses in Q2CY’26 despite the overall drop of 10% y-o-y. Production of combined polyethylene terephthalate (CPET) with intermediate chemicals declined 11% y-o-y to 2.28 mnt, with its operating rate easing to 79% from 82% a year earlier. IVL said it deliberately aligned production with inventory targets.
Indovida production increased 9% y-o-y to 0.09 mnt, while Indovinya production rose 6% to 0.32 mnt. For Indovida, performance benefited from stronger demand, the ramp-up of the Tanzania facility and seasonal demand and restocking, while Indovinya benefited from commercial excellence initiatives and favourable market conditions.
Fibres production declined 22% y-o-y to 0.34 mnt, with its operating rate falling to 59% from 71% a year earlier. The company said stable hygiene demand, portfolio optimisation and transformation actions helped offset weakness in lifestyle and mobility end markets.
PET remains main earnings driver
Combined PET with intermediate chemicals generated THB 14.43 bn of EBITDA in Q2CY’26, up 163% y-o-y and 164% q-o-q, despite sales volume declining 6% y-o-y to 2.33 mnt.
Integrated PET EBITDA increased 128% y-o-y, with the China integrated PET benchmark spread averaging $279/t, compared with $176/t in Q1CY’26 and $132/t in Q2CY’25. The company attributed the improvement to tighter industry operating rates, limited new capacity additions, and temporary geopolitical supply disruptions. Higher PET prices and lower fixed costs following rationalisation measures also supported profitability.
Speciality chemicals EBITDA increased to THB 1.11 billion from THB 66 million a year earlier, while intermediate chemicals EBITDA rose to THB 3.10 billion from THB 943 million, supported partly by stronger US methyl tert-butyl ether (MTBE) spreads. The MTBE spread averaged $587/t in Q2CY’26, compared with $359/t in Q1 and $263/t in Q2CY’25.
Other segments also improve
Indovinya delivered THB 4.69 billion as EBITDA in Q2CY’26, up 94% y-o-y and 173% q-o-q, with revenue rising 19% y-o-y to THB 24.14 billion. Its EBITDA margin improved to 19.4% from 11.9% a year earlier, supported by stronger performance across both higher-value-added and essentials portfolios, agile pricing and commercial execution.
Indovida EBITDA increased 62% y-o-y to THB 1.31 billion, with sales volume rising 11% to 0.09 mnt. Performance benefited from stronger demand in Thailand, Myanmar, Egypt and Ghana, the ramp-up of the Tanzania facility and seasonal demand and restocking.
Fibres EBITDA rose 39% y-o-y to THB 1.87 billion, despite sales volume falling 22% to 0.34 mnt. Stable hygiene demand, pricing actions, product-mix improvement, lower-cost inventory and portfolio optimisation helped offset weakness in lifestyle and mobility markets.
H1CY’26 performance strengthens
For the first half of 2026, IVL reported THB 245.3 billion in revenue, up 4% y-o-y, while EBITDA increased 61% to THB 29.7 billion. Sales volume declined 4% to 6.27 mnt, while production fell 7% to 6.14 mnt.
CPET remained the largest contributor, generating THB 19.9 billion EBITDA, up 111% y-o-y. Indovida EBITDA increased 37% to THB 2.05 billion, Indovinya rose 17% to THB 6.40 billion, while fibres declined 9% to THB 2.75 billion.
The company’s consolidated EBITDA margin improved to 12% in H1CY’26 from 8% a year earlier, while return on capital employed increased to 10.3% from 3.3%.
Operational discipline improves cash conversion
IVL’s focus on inventory and working-capital management supported cash generation. Inventory turnover improved to 5.0x in Q2CY’26 from 4.7x in Q4CY’25.
Operating cash flow after maintenance capex reached THB 17.17 billion in Q2CY’26, up 400% y-o-y, and THB 25.93 billion in H1CY’26, up 78%. Net debt declined to THB 226.4 billion at end-June from THB 235.6 billion at end-March, while net debt-to-equity improved to 1.56x from 1.73x. The company said it had achieved its full-year Capital Markets Day leverage target ahead of schedule.
Liquidity stood at THB 103 billion, while the company retained an A+ credit rating from TRIS.
Recycling, portfolio restructuring remain priorities
The recycling vertical recorded a $17.2 mn positive EBITDA swing in H1CY’26, reflecting operational and commercial improvement initiatives.
IVL also continued portfolio optimisation, including the divestment of UCY Polymers CZ and Indorama Ventures Fibras Brasil during H1CY’26 and approval for the closure of its Longlaville polyester facility in France.
The company also continued to focus on circularity, including recycled polyester solutions made from textile waste and PET bottle feedstock. Its CPET speciality polymers business supported the launch of a beverage bottle containing 20% recycled PET in the US.
Market conditions begin to normalise
The exceptional market conditions that supported Q2 earnings have started to moderate. The company reported that the China integrated PET spread declined to around $184/t in July, from the Q2 average of $279/t.
Management expects earnings to moderate from the exceptional second-quarter level as temporary market tailwinds normalise. Nevertheless, it remains focused on four priorities for the remainder of 2026: sustaining earnings under normalised spreads, converting earnings into free cash flow, reducing absolute net debt and improving returns on capital.
Outlook
IVL’s 2Q26 results show that the earnings recovery was primarily margin- and execution-led rather than volume-driven. Stronger PET and chemical spreads provided the initial earnings uplift, while lower operating rates, inventory discipline, pricing actions and portfolio optimisation helped convert those market gains into stronger cash flow and lower leverage.
For the remainder of 2026, the key test will be whether IVL can maintain earnings as spreads normalise. The company expects to meet its 2026 estimates and remains committed to its 2028 ambitions, but profitability will increasingly depend on operational discipline, supply-side rationalisation and the resilience of downstream demand.
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