Is IVL in Critical Situation?
Is IVL in Critical Situation? The share price has fallen sharply after a plummet of oil prices while people are starting to care more about the environment.
Not long ago, Indorama Ventures Public Company Limited (IVL) was the star in the petrochemical sector due to its high growth in recent years along with a lot of acquisitions internationally. IVL is highly expected to be the downstream petrochemical industry with good potential.
(It is said that the company always gets what it seeks at a cheap price. However, if it is really that good, why has the former owner disposed of the stake?)
Nevertheless, it is evident that IVL has started to slow down its growth this year due to lower demand in PET and polyester when people are starting to put more effort in preserving the environment as well as the global economic slowdown from the trade war. The acquisitions that IVL took over in the past two to three years still has yet to reflect their value.
The shaky look of IVL causes a lack of confidence in investors.
In the 2Q19 financial statement, IVL’s profit plunged to 2,267 million baht, decreased 72% from the same period of last year that booked 8,243 million baht. Meanwhile, the profit for the six-month period also plunged to 5,975 million baht, decreased from a total of 14,057 million baht in the same period of last year.
Moreover, analysts from various security companies said unanimously that IVL would not recover this year due to three main factors.
1) Lack of buying pressure from the market due to the economic slowdown.
2) The higher oil prices from the 5% global output loss from the attack on Saudi Arabia’s oil plants, resulting in higher production cost.
In the previous three months, the share price of IVL slipped 28.35%. Especially, on September 16 and September 18, investors all made a selloff, plunging IVL by almost 8% each day.
As of Wednesday, September 18, 2019, IVL closed the session at ฿31.75/share, plunged ฿2.75/share or 7.97% with a trading value of 3.24 billion baht.
It is very important to keep a close eye on IVL’s movement and turnaround plans, especially from the CEO of IVL Aloke Lohia.
If this situation continues, its share price could fall further. IVL could turn from the shining star of the sector to darkened star.