Ineos Group - comment - 26Q3 Trading Statement

We remain doubtful about the duration of INEOS’s recovery. Q3 EBITDA rose to €703m from €375m a year ago, but fell from €1.13bn in Q2. Middle East supply disruption, cheap North American ethane and competitor outages have boosted margins, but chemical businesses ultimately depend on economic growth to sustain demand. We see limited evidence of a durable recovery in underlying end markets.

With €12.5bn of net debt and 3.75x leverage (excluding SECCO and Project One facilities), INEOS has little room for disappointment. September-end liquidity comprised €2.2bn of cash and €672m of undrawn working capital facilities. Tuesday’s call should clarify how management expects to sustain margins and generate cash as market dislocations unwind.