IPL Plastics reports fall in revenue as it continues to look for offers
IPL Plastics has reported a 9pc fall in revenue to $153m (€130m) for the second quarter of the year, as it continues to look for potential buyers.
The company, formerly One51, is being sold for C$555m to US private equity firm Madison Dearborn Partners.
Its agreement with Madison contains a ‘go-shop’ provision that allows the company to engage in discussions with other possible buyers for up to 40 days.
If IPL, as expected, proceeds with its sale to Madison it then needs get the backing of twothirds of shareholders. The IPL board has unanimously recommended that the deal be approved.
Nonetheless, the company has hired Canadian group BMO Capital Markets and is actively looking at other options. However, analysts have said they don’t think a competing offer will disrupt the sale.
Net income at IPL was $5.3m for the three months to June 30, a decrease of 37.6pc from the $8.5m reported in the same period last year. Adjusted earnings before interest, taxation, depreciation and amortisation (Ebitda) was $26.8m in the second quarter, compared with $28.5m in the corresponding period last year.
Net debt of $297m was little changed from the position at the start of the year.
Alan Walsh, CEO of IPL Plastics said: “Our Q2 performance improved through the quarter as the diversity of our product range and markets assisted recovery and delivered financial results ahead of market expectations. This was achieved in challenging market conditions due to widespread Covid-19 disruption, which continues to impact operations and limits visibility regarding performance for the remainder of 2020.”
One51 emerged out of the IAWS group of companies as an investment firm but entered the plastics business in 2006 when it acquired Protech Plastics.
Its €200m purchase of a 67pc stake in Canadian firm IPL in July 2015 was transformational, shifting it from being a mixed investment vehicle into a plastics company.
In 2017 CDPQ and a number of other large IPL shareholders swapped their shares in the Canadian company for shares in One51, which changed its name to IPL Plastics.
Flor O’Donoghue of Davy, said if this was IPL’s last results as a listed entity, the company “will bow out having made good progress over the course of the last 18 months in improving the group’s operating margin. This margin progress helped the company deliver a stronger-than-expected result in quarter two”.