Indorama Ventures Public Company Limited (IVL) Earnings Call Transcript & Summary

Welcome, everyone, and thank you for taking time, joining us for Indorama Ventures Third Quarter Results Briefing. My name is Vikash Jalan, investor relations and corporate responsibilities at IVL. Joining me today, we have Mr. Aloke Lohia, Group CEO; Mr. D.K. Agarwal, Deputy Group CEO; Muthukumar Paramasivam and Kumar Ladha Co-Leader of CPET segment; Sunil Marwah, President for Indovida segment; Alastair M. Port Executive President for Indovinya; and Diego Boeri, Executive President for Fibers business. A quick disclaimer that this meeting is being recorded, and a replay of this session will be available on our website after the meeting. We have made a few assumptions and estimates on future trends for industry and business, which are based on our analysis and available information at this point in time. So with that, I now invite Mr. Lohia to first give the opening remarks. Over to you, Mr. Lohia, please.

Thank you, Vikash. Good afternoon, ladies and gentlemen. Another disappointing quarter, and I would like to share with you what is happening in the world of the industry -- in the world of chemical industry. So the global ecosystem, as we all recognize, is undergoing a period of transformative shifts, impacted by the geopolitical tensions, unprecedented technological advances, changing demographics leading to changing consumer behavior and environmental factors. Meanwhile, the chemical industry is in the middle of a perfect storm, battling record overcapacity and poor demand primarily in the downstream automotive and construction sector, which impacts a host of consumers and demand for petrochemical products were reflecting on CMD. I had trust on the industry's prudence to manage itself in a balanced growth manner, taking into recognition the large capacities that have come on stream in the U.S. and in China. This initiative is well thought through by the industry players, including IVL, but unfortunately, the supply chain disruptions from the new tariff measures means an additional pivot to bake into the plans, which should be better visible as the tariffs on China and India get sorted out. We were quite successful towards achieving these objectives, but I have to admit that the margin pressure that the industry is inflicting on itself is unprecedented. The correction is in transition with a serious capacity footprint optimization taking place globally. And it has now also got the attention of regional governments with China taking anti-involution and convening meetings with PTA, PET players to address concerns. South Korea is showing interest in its petrochemical industry, Europe willing to listen to trade matters and recently announced PET tariffs in the U.S. as well as Brazil's extension of higher PET import duty. Additionally, in Brazil, the government is working on a $3 billion plan to incentivize on sustainability for chemical industry, which will help feedstock purchases in the region. The stock price of a firm reflects its performance, which for IVL and for the industry as a whole has been depressed. What the stock price also reflects is a firm's readiness to emerge from troughs, based on leadership's ability to realign its portfolio and costs towards modernity and fit-for-purpose business model, which I know is being shaped at IVL, though, unfortunately, is not recognized due to the continuing high debt levels in proportion to our EBITDA. The decline in Brent oil price, coupled with high interest rates and persistent inflation in certain sectors, such as housing, has resulted in slowed business sentiments. Demand within the value chain has slowed, restocking has been deferred amid volatile price cycles and cash flow is being conserved as can be seen in the reduction of working capital. Although the reduction in working capital slide, when we get to it, I'll explain a bit more that the reduction has been more because of the falling oil prices as well as the 2.3 million ton of capacity that has been rationalized at IVL, rather than management actions, which are still to take place. And finally, I hope that there is a delayed consumption coming out from the market in the same way as we saw travel post-COVID. Next slide, please. This is how IVL's business is across regions. And as you can see, all regions have got impacted over the last 5 quarters. What is interesting for me to see in this is that the drop in the last 3 quarters has come from this period when we have this new tariff from the new administration in the U.S. So though we were already on weak earnings in 2024, this year, in 2025, we have got further impacted by the uncertainties created by the tariffs. What we can also see in this slide is that there is a consistent drop in the EBITDA margins in each of the 3 main regions for IVL. So that has been this impact from the tariff that we are passing through, and we are adopting -- and adapting to. I believe that the end of the Russian-Ukraine clash has to be the most defining upside for this European region, and the recent actions by Brussels to consider trade regulations on imports will bear fruit in an industry which is fighting, within their means, to keep their heads above the water. We have been taking several self-help actions, and we will be better positioned to capitalize on these when global trade and consumer demand adjusts and realign to the emerging world order. Like all leading industry players, we had started preparing for the overcapacity scenario since late 2022, which we shared at Capital Markets Day in 2024. But I admit that I have grossly underestimated in our 2025 CMD, the impact of the tariffs that the new administration has brought to the fore. Our 2023 assessment was primarily led by the impact from the Ukraine-Russia conflict and the impact from the electrification on regional energy disparity. The execution on these plans were at full swing, based on which our expectations for a better 2025 over 2024 was built. But these hopes are now dashed due to the still unknown implications from the tariff dialogue, which has enhanced geopolitical risk. Next, please. Since we began working on IVL 2.0 in 2023, we have executed on a number of structural actions. We have rationalized 2.7 million tons of capacity since 2023 and taken impairment of approximately USD 1.2 billion. The majority of these actions are in Europe. We removed three big CPET sites, including a large integrated site in the Netherlands. On top of what you see here, savings in fixed costs in future quarters are progressing. And for example, we have also re-shuffled our fiber European portfolio. We shifted our German lifestyle operations to our Italian facility, resulting in a 200 head count reduction and a total annualized cost saving of $13 million to come in future quarters. I'm proud of our teams in identifying and taking proactive measures. Timely, we are now seeing the rest of the industry take similar actions. These actions are positioning the company to a leaner and more efficient portfolio, a fit-for-purpose footprint in the changing landscape. During the last quarter, we instituted an internal study to do a strategic review of our integrated EOEG business, which has been performing below our expectations due to certain reliability issues, current benign industry environment. The Project Rebound, as it's called, study concluded that the assets, through the support of some projects, have a significant upside potential relative to current performance. On operational performance, these projects are being initiated under the oversight of a strong project management office. We should be able to see a ramp-up of performance in the year 2026 and beyond. Though the current industry environment would not permit adequate returns to the shareholders, the market outlook provides the improved margins and returns in the medium to long term. The recent trade action in some countries, like in India, does provide for a [ U.S. ] producer like IVL to rework its MEG marketplace and flow to improve its overall profitability. Our focus in the coming year will be operational excellence at the same time looking at different strategic options in the medium to long term. Next, please. The proactive management action started in end '22, and we first impaired a few assets to optimize our portfolio. This continued with sharp focus in 2023 and in 2024, $126 million fixed cost reduction has got completed. And as you can see from the slide, that much cost has been reduced over the fixed cost in LTM 3Q '23. Our continuous improvement programs and the additional transformation actions that each of the segments are taking on has helped to at least overcome inflation and therefore, the entire asset optimization, cost improvements has flowed into our P&L. Next, please. Despite our IVL 2.0 deleveraging plans, our net debt levels have not decreased over the last 3 years. In part, due to the elevated interest costs amid a volatile business environment. In the past 4 years, SOFR, which is our benchmark interest rate, went up by over 300 basis points, which impacted our interest cost by around $200 million each year. And this $200 million is what has, in one way, I can see, increased our total debt level, which in other way is that the working capital reduction, which comes in the next slide -- maybe we can go on to the next slide. The working capital reduction, as I mentioned earlier, from $2.2 billion to $1.1 billion currently, has been [ all a ] factor of the asset optimization, asset rationalization as well as the Brent crude oil price decline. But when it comes to working capital days, as we can see, it has more or less stayed at this 90-days level. And this is where I believe the disruption by a reduced availability of materials, we were -- we had to redefine our supply chains. And the changes were happening so rapidly that we were not able to act fast enough to benefit from our management actions to reduce our working capital days. But this is a work that is going on in full swing at the moment. I believe there is going to be more deep dive by our segments to reduce their working capital needs and sort out the supply chain issues that are now demanding better synchronization between feedstock sourcing and the final consumption centers. We also are deploying IBP, integrated business planning tools. So with the availability of our SAP data, with the improvement on having that data being able to talk to the tools like IBP, these are all the technological advancements that our teams are now deploying in their management actions. And I do believe that over the next year or 2, we would see a significant reduction in our total working capital days. Next please. On the last slide on our segments, basically, on the industry player side, I believe we would see over the next 12 to 24 months, a host of mergers and partnerships to bring synergies and optimize the capacity and cost dynamics. At IVL, we are truly at advanced stage with a bunch of collaborations that will enhance our balance sheet and quality of earnings across each of our business segments. In Indovinya, there is an advancement on the R&D front. There is investment going on in Indovinya, and maybe Alastair can talk about that, in making a separate sales channel, employing some sales force to better market the HVA formulations. Our capacity utilization, as you will see from the MD&A, keeps coming down, and that is representing the lukewarm market sentiments, market demand. And as the capacity utilization improves, we would see enhancement of earnings, irrespective of the margin environment. And finally, the freight rate stabilization should remove a lot of uncertainty now that the Middle East crisis is averted, and I think we'll get more sense on where the freight rates will normalize, and then we can use our IBP and our global platform to best place the products to our customers. With that, I would like to hand over to Mr. D.K. Agarwal for the next -- sorry, to Muthu for the CPET segment. Thank you.

Thank you, Mr. Lohia. We'll look at the snapshot on the Combined PET financials here. The Combined PET segment posted an adjusted EBITDA of $158 million in the third quarter, down 17% sequential and 39% year-over-year. Volumes were lower by 6% quarter-over-quarter driven by the MTBE turnaround. Weaker than usual seasonal PET demand is primarily due to more rains than usual and also cooler weather in some of our key markets and to a certain extent, consumer sentiment and also unplanned outages. The year-over-year decline in EBITDA was driven by challenged industry margins across products, higher energy costs and the planned -- PO/MTBE, and this is an event that we have discussed in previous meets that it occurs once every 5 years. The quarter-over-quarter decline in EBITDA was driven by what we discussed, weaker industry conditions both on demand as well as on spreads, the planned turnaround and few unplanned production outages. Now talking about the individual verticals and the Combined PET, integrated PET delivered an adjusted EBITDA of $124 million, down 22% quarter-over-quarter due to lower industry spreads, weaker-than-usual demand and unplanned outages including a fire event at one of our PET sites in Indonesia. Talking about Intermediate Chemicals, it reported an adjusted EBITDA of $19 million, down 33% quarter-over-quarter driven by lower MTBE volumes due to the TAR, partially offset with higher ethylene production normalizing from the TAR we had in the second quarter and also a onetime $17 million gain from insurance income. Talking about Specialty Chemicals, it increased to $15 million from $4 million in the second quarter. This was supported by higher NDC campaign volumes and improvement in overall performance of the PIA business, driven by the tariffs in U.S. although the weak -- the market conditions for PIA in Europe, it was weak. With respect to the overall industry dynamics, as we talked about earlier, mentioned by Mr. Lohia, the recently announced PET tariffs in U.S. And also, the extension of the higher PET import duty at 20%. This was extended from October 2025 to now October 2026. These are beneficial. We are also closely monitoring the developments related to the anti-involution measures from the Chinese authorities including the recent joint meeting that Mr. Lohia mentioned, between the authorities and the key PTA, PET players. But importantly, in parallel to all this, we continue to diligently focus on the controllables through various management actions, including on cost and capital discipline and digital augmentation while leveraging on our global presence to provide customer-centric solutions. With that, now I would like my Co-leader, Kumar, to provide a progress update on the management actions in CPET in the next slide. Over to you, Kumar.

Thank you, Muthu. We wanted to provide you with an update on the management actions that CPET has been undertaking, and how it builds into the foundations of our segments -- segment-wise cost optimization and efficiency program, NorthStar, which I'll explain to you shortly. The first are the actions taken on asset rationalization of our Rotterdam, Montreal and Portugal sites during 2024 resulting in fixed cost reduction of $111 million in the last 12 months. We are also in the final stages of monetizing the real estate value for these assets. Our second management action has been a laser focus on net working capital reduction. During the first 9 months of this year, we have realized a reduction of $253 million through strategic supply chain optimization partnered with inventory and collection discipline. Finally, digital adoption continues to accelerate across CPET, driven by progress in the implementation of Workday, Salesforce and Integrated Business Planning. Workday is going live in Indorama for the first time, and we will have the first digitally-driven annual business plan exercise using the platform exclusively, with further plans to digitize FP&A function in 2026. Salesforce is now fully operational globally. And in parallel, IBP has advanced significantly since launch, with demand planning now live across vPET and rPET in multiple regions. We have also implemented S2C for digitally enabling procurement on category sources. These platforms are part of the broader strategy of transforming how we work going forward. Looking to 2026 and 2027, the CPET management team is now focused on the execution of the NorthStar Program, which I mentioned earlier, a segment-wide project focused on resetting CPET's target operating model that will drive structural efficiency, cost reduction and digital value. We are focused on taking out cost, creating an organization that is leaner, powered by digital and reinforced by transformation excellence. Its purpose is to hardwire efficiency, agility and competitiveness into the segment while creating a digitally-enabled enterprise ready for the next decade. Our target is to achieve a cost reduction annual run rate of a minimum of $50 million by the end of 2027. We will, however, start seeing value accretion by the second quarter of 2026, with the full run rate achieved by 2027. NorthStar will connect three layers of change. At the core, we will have a leaner operating model. Across the enterprise, there will be pointed transformation in areas such as manufacturing, finance, procurement and commercial. And on the outer layer, it further advances our digital capabilities through Salesforce, Workday, IBP and other platforms, ensuring data, systems and people work seamlessly together. Thank you. Now I will pass it on to Sunil Marwah, Indovida.

Thank you, Kumar. Good afternoon, everybody. Indovida, the packaging business segment of IVL, had declined earnings during the quarter, mainly due to seasonal volume softness. This quarter also included the first full quarter equity income from 24.9% stake in EPL that was completed in May 2025. Year-on-year, adjusted EBITDA decreased by 11%, mainly due to -- also mainly due to discontinuation of bottling operations in Philippines. Quarter-on-quarter adjusted EBITDA decreased by 14% from lower demand due to seasonality. Thank you. I'll pass it on to Alastair, please.

Thanks, Sunil. Indovinya has two reportable segments, HVA and Essentials. HVA is comprised predominantly of surfactants; ethanolamines; oleochemicals, which was reclassed from the Essentials business and propylene glycol. While the Essentials business is now made up primarily of ethylene glycol, LAB, solvents and propylene oxide, which was again reclassified from the HVA to reflect the volumes sold in emerging markets. The prior periods have been duly restated for comparison purposes on this slide. Indovinya's EBITDA was $78 million, with an overall EBITDA margin of 11.6% in Q3. EBITDA rose 3% versus Q2 year-on-year. And EBITDA declined 24% due to lower margins, partially offset by a reduction in fixed costs through our transformation program compared to last year. We experienced ongoing headwinds from weak economic conditions, ethylene margins and higher costs for key oleochemical raw materials. We took actions to maintain and grow our market share in our key markets in the face of low consumer sentiments and aggressive downstream competition, whilst our customer diversification strategy continues to gain traction. Our HVA portfolio is integrated and based on the principles of customer centricity, innovation and sustainability. Our end markets are now comprised solely of HVA products. And HVA specialty products generated 78% of our net revenue and 92% of our EBITDA in Q3 with an EBITDA margin of 16.9%. Overall volumes grew at 3.4% quarter-on-quarter, driven by seasonality in Crop Solutions in Brazil and higher demand in our Energy & Resources markets. The main headwinds came from margin pressures caused by higher imports of products in South America, particularly in Argentina in the face of elevated tariffs in other markets. Our Essentials business, which accounts for 22% of our net revenue, posted an improved $6 million of EBITDA this quarter thanks to better margins and volumes in LAB and margins in PO, offset by the start of the 5-year turnaround cycle in PO, as Muthu mentioned. This portfolio is closely integrated with the production of HVAs, creating operation synergies. The announced closure of a major competitor's PO unit in the Gulf Coast at the end of 2025 will tighten the supply dynamics. As a result, we anticipate an improvement in our Essentials segment beginning in 2026. For the fourth quarter, we expect macroeconomic, geopolitical and consumer headwinds to continue, combined with seasonal effects and the impact of the PO turnaround. In terms of end markets, we're focused on four key markets. Coatings and Construction has been renamed as Coatings & Performance Solutions to reflect the movement of PO from HVA to the Essentials segment. Under Home & Personal Care, we continue to protect our market share in Q3, though experienced a margin contraction as a result of higher raw material pricing and tariffs. The industry continues to be negatively affected by high oleochemical raw material costs, and we are implementing more just-in-time purchases to control those margins. We continue to successfully diversify our sales mix into second- and third-tier customers. For Crop Solutions, we grew volumes in Crop Solutions in Q3 versus the previous quarter, driven by improved seasonal demand in Brazil and favorable mix. Margin pressure continued in Q3 due to difficult economic conditions being experienced by U.S. farmers due to the China's boycott of the U.S. soybean agriculture. However, the recent U.S.-China trade submit in South Korea, China agreed to resume purchasing U.S. soybeans with 12 million metric tons in Q4 and normalized imports of 25 million metric tons per annum in 2026 to 2028, nearly back to the 2024 levels, which will provide a big boost for U.S. agriculture. We anticipate that this may lead to a normalization of Brazilian soybean exports to China from the record year-to-date levels we've seen. In North America, we experienced strong sales to Tier 1, Tier 2 and Tier 3 customers. And in South America, the strength in Brazilian surfactants was offset by heavy competition from imports into Argentina. APAC margins were strong with increased sales of surfactants in India and Australia. For Energy & Resources, we experienced strong volume growth in both year-on-year and quarter-on-quarter. In North America, we continue to make inroads into food-grade biorefining products. In APAC, we're seeing margin improvements in Asia and higher mining sales in Australia. In addition, we experienced strong demand for our new KEMELIX and FLOWSOLVE brands and technologies for demulsifiers and flow assurance products, particularly in the Middle East and Europe. And we're on track to transferring this production of the first of these products to our in-house facilities. For Coatings & Performance Solutions, we experienced higher orders in North America and both quarter-on-quarter and year-on-year despite ongoing weak architectural demand in this elevated interest rate environment. While we anticipate weak architectural coatings demand in Q4, we're seeing a potential uptick in 2026 on better macroeconomics. We also experienced an uptick in South American Coatings & Performance Solutions, both year-on-year and quarter, through the coatings market in Brazil despite the negative downturn in automotive and industrial sectors. Whilst the specialty chemicals industry remains challenged, we continue to focus on self-help, managing the things we can control to secure our customers, diversifying and expanding into Tier 2 and Tier 3 accounts and reducing overheads, fixed costs, discretionary capital and working capital. Management actions have lowered the fixed costs by roughly $12 million year-to-date as compared to 2024. And we believe by taking these actions, we are positioning ourselves to not only navigate these headwinds that our industry is in the midst of, but also take advantage sooner than others when conditions become positive, as we did in 2024. Thank you.

The Fibers segment reported an adjusted EBITDA of $31 million in Q3 '25. Our performance declined 36% year-on-year, driven primarily by soft market conditions, especially in Europe. Demand weakness across several end markets created headwinds, but we were able to partially offset the impact through proactive management actions, including fixed cost reduction and asset rationalization. These measure have helped us maintain resilience. However, the macroeconomic conditions remain challenging and volatile. Mobility, which is our tires and airbag business, was the most impacted from weak demand from our major brand customer, resulting in extended summer shutdowns than originally planned. Hygiene was overall impacted from imports and weak demand in Europe, while volume remains strong in the U.S. Lifestyle, which is our textile business, declined marginally despite lower spreads supported by management action on fixed cost and network optimization in Europe. On a quarter-by-quarter basis, adjusted EBITDA declined 35%, reflecting weak demand across all markets and the seasonality impact of summer shutdowns in Europe. We are implementing more management action on fixed cost reduction and asset optimization to mitigate these losses. Lifestyle delivered an adjusted EBITDA of $14 million in Q3 '25, down 27% quarter-on-quarter, primarily due to softer market conditions. Polyester spreads moved -- the fiber spreads moved from $135 per metric tons to $126 metric tons in Q3. In addition, we have had a fire accident at one of our plants in Indonesia and continued pressure in Europe from Asian imports. We successfully concluded, as Mr. Lohia has mentioned at the beginning, the large head count reduction actually in Germany, around 200 head count at the end of Q2 and moved the production to our Italian facility, resulting in an annualized fixed cost saving of $13 million. Mobility recorded an adjusted EBITDA of $9 million in Q3, down 54% quarter-on-quarter, primarily due to seasonality and weaker demand, which trigger extended shutdowns in Europe. The airbag segment weakened further, reflecting an industry slowdown, especially in the Western markets. The hygiene market posted an adjusted EBITDA of $8 million, an 11% quarter-on-quarter decline, mainly due to comparative pressure in Europe, offset with tariff tailwinds in America. The completion of Wellman discontinuation was successfully achieved as planned and on time. I take this opportunity, I'm glad to do this, to inform you that earlier today, we have announced that we are forming a joint venture with Jiaren Chemical Recycling, a Chinese technology leader in chemical polyester recycling. This partnership will unlock up to 100,000 tonnes of textile-recycled PET spinning capacity annually. This will enhance the resilience and transparency of the global textile supply chain and optimize the value both partners deliver to the industry. This investment gives us an early position in this growing market. It will strengthen our relationship with the brands and allow us to bring to market a full palette of sustainable innovation under our Deja sustainability brand. This low double-digit million-dollar investment is aligned with the group's highly disciplined approach to capital allocation in which we are targeting partnership with experienced companies that can enhance our participation in new growth markets.

Thank you, Diego. Good afternoon. As Mr. Lohia mentioned, a disappointing quarter. For this quarter, IVL reported lower sales volume, down 3% sequentially quarter-on-quarter, primarily due to once in 5-year planned turnaround of PO/MTBE assets in the United States. As we talk, this plant has started commissioning. So it will restart in mid-November as well as fire incidents at our Combined PET and Fiber site in Indonesia, as covered by Diego and Muthu; and down 9% year-on-year, primarily due to lower volumes from the optimized PTA asset in Canada, we shut down our Canada asset in fourth quarter and the PO/MTBE turnaround in third quarter '25. Consolidated revenue fell by 4% quarter-on-quarter and 14% year-on-year to $3.39 million, while adjusted EBITDA decreased by 15% quarter-on-quarter and 34% year-on-year to $280 million. As Mr. Lohia covered, the weaker performance was mainly attributed to very challenged industry supply dynamics and demand dynamics. However, the cash generation is priority during this volatile period. For 9 months ending '25, operating cash flow stood at $985 million, with a healthy reported EBITDA conversion of 121% driven by reduced oil prices, working capital management, including tight control on receivables and payables, and there is a further opportunity to do so, as Mr. Lohia explained. Site optimization action as covered by various segments, which included the sale of Wellman International in Ireland, helped reduce the fixed costs, rationalize capacity and reposition the company's leaner and more efficient portfolio in the changing landscape, as CPET covered, their NorthStar Project also. The fixed cost stood at $2.28 billion in the 12 months to third quarter '25, nearly at $130 million reduction compared to the corresponding in '23, as covered by Mr. Lohia, when IVL 2.0 was launched. The company expects to realize nearly $200 million in 2026 in first half from sale of land and properties of rationalized assets in Australia, Rotterdam and Canada. While 2025 has reflected a period of consolidation with maintenance activities and cyclical softness across our portfolio, we had many big turnarounds impacting our EBITDA by nearly $80 million to $90 million across all the businesses. IVL's strategic action and diversified business model position it well to navigate ongoing market challenges and capture upside as the industry gradually rebalances into '26. Our '26 to '28 business plan will be presented in the next Capital Market Day in March '26, at which time we'll discuss in more detail the actions and outcomes of the outlook on IVL performance based on our preparedness. Next slide. Now it is the debt bridge. In 9 months of '25, IVL reported EBITDA of $813 million and generating strong operating cash flow, as I mentioned, of $985 million, supported by working capital inflow from lower inventory prices and better inventory efficiency resulting in an EBITDA conversion of 121%. Of this, $602 million was allocated to maintenance CapEx, financing costs, perpetual coupon and NCI dividends delivering a free cash flow of $384 million attributable to IVL's shareholders and reducing net debt from $7.18 billion to $6.79 billion. After distributing $81 million in dividend to shareholders, investing $160 million in growth CapEx, mainly in recycling projects, residual spending at the Mocksville site, which is the known one -- Fibers in U.S. and other strategic initiatives and completing the $221 million EPL acquisition in second quarter of '25, net debt still stood at $7.25 billion. So excluding the onetime turnaround in Intermediate Chemicals of $100 million, we would have been able to deleverage even further, with our net debt potentially reducing as low as approximately $7.1 billion. So if you take onetime investment of EPL as well as this heavy turnaround, we would have deleveraged by nearly $350 million. Management remains fully committed to drive free cash flow generation and achieving deleveraging targets. We expect to realize, as I mentioned, $200 million in cash proceeds from land and property sales in 2026 early. Amid challenging industry dynamics, macro volatility and elevated interest costs, we remain focused on disciplined capital allocation. Our approach prioritizes projects that drive strong returns, reinforce our strategic positions and advance our long-term transformation. We continue to channel capital towards essential, high-return investments aligned with the structural growth trend, particularly sustainability and high-growth markets. A clear example is investment in circularity, which is recycled PET, what you saw as the growth projects, including new joint venture with Varun Beverage in India, with one of the fastest-growing beverage market and supporting recycled content regulation. India presents a compelling opportunity to scale sustainably while strengthening our regional footprint. In 2025, CapEx will be temporarily elevated, as I mentioned, largely due to major planned turnarounds and key manufacturing assets, PO/MTBE, ethylene glycol and cracker, critical investments reinforce reliability, safeguard operational continuity and extend asset life cycle. Across the portfolio, we remain committed to deploying capital with discipline, ensuring every dollar supports growth, sustainability and long-term value creation. Our financing plan for $2.3 billion has been completed at the end of third quarter '25. The objective has been achieved to increase liquidity through extending debt maturities and to optimize financing costs. As I mentioned, in July '25, Indovinya successfully completed drawdown of $1.5 billion through a 5-year senior unsecured syndicated term loan of favorable terms for interest rates. A syndicate of eight leading financial institution participated in this financing, showing the confidence in IVL. The $1.5 billion has been used to repay existing debts and to prepay maturities of second half '25 and '26. In addition, we completed a drawdown of Thai bhat long-term equivalent to $800 million to fund CapEx, equity investment and refinancing. Today, our liquidity in excess of $2.6 billion, which includes cash and cash equivalents and unutilized credit lines at the end of third quarter '25. This provides financial flexibility to navigate the present difficult market conditions and to support management action for strategic transformation. ESG-linked debt accounts for 17% of total borrowing, we are reinforcing our commitment to sustainability in alignment with the long-term ESG goal, as you saw just investment in Jiaren, across our business and capital structure. To summarize, I think Mr. Lohia covered very important factor that this is one of the most difficult situation in chemical industry. Industry is negating one of the most turbulent periods if you see all the chemical companies earning because of geopolitical uncertainty, record overcapacity and weak downstream demand are reshaping the global landscape. And Europe certainly faces deeper structural challenges, and IVL took very preemptive steps. And actually, you have seen that there's a lot of follow-up by many other chemical companies. And this drove -- because of elevated energy cost, import pressure and carbon-related [indiscernible]. As Mr. Lohia mentioned, a resolution of Ukraine and Russia crisis can be a tilting point in Europe. But however, we have to watch the present situation. Amid these unprecedented tailwinds, all chemical industries are taking necessary steps. We are firmly focused on what is self control. Our priority remains disciplined execution of all the self-help measures, as you saw all the businesses presented; tight cost management, hence reducing the fixed cost; improving reliability; productivity enhancements; improving the sales mix; footprint optimization, where you have negative conditions or negative EBITDA; digital adoption and continuous progress in sustainability innovation. These actions are designed to strengthen our resilience and cost culture regardless of market condition and will certainly benefit when the consumer sentiment revise. The industry itself is bringing a -- entering a period of active reshaping, which is not only the industry, but industry, government and regulation are now engaging an overcapacity concern, and we expect the next 12 to 24 months to bring meaningful consolidation through partnership, rationalization and strategic alignment across the value chain. The initial assessment, as presented by many chemical companies is that 10% of the ethylene capacity will get shut down, 20% of the propylene oxide capacity in Europe and America will get shut down. So a lot of things are happening in the chemical world. At IVL, we are not waiting for the cycle to turn. We're actively, decisively taking -- looking at assets long-term sustainability. We're advancing strategic collaboration across our business segments, reinforcing our balance sheet, enhancing earning quality and realigning our portfolio for the future to reap the benefit once the down cycle is over. While the environment remains challenging, we are confident in our strategy, our progress and our direction and our global footprint. The steps we are taking today position us to emerge stronger and more agile when global demand stabilizes and the industry transition into its next phase of growth. Thank you all for joining the quarterly results. Now we can take your question and answer, please. Thank you.

[Operator Instructions] In the meantime, we have bought got question from [ Khun Nawarat ] from Asia Plus Securities. [ Khun Nawarat ], you're asking that can you give some details on the unplanned outages in CPET? So that's the first one. The second is regarding the fire incidents in Indonesia. So did it lead to any production stoppages and if, for how many days, and what's the EBITDA impact? And there are a couple of more questions. That's on the finance. So can you elaborate more on $12 million impairments recorded this quarter? $16 million exceptional expenses and what's the $8 million other income? And why the tax is negative -- is the income this time. So these are a few of the questions from [ Nawarat ], Asia Plus.

Vikash, why don't you answer them?

Okay. [ Khun Nawarat], thanks for your questions. So for this unplanned outages, so in CPET, so they are mainly like in a couple of sites in Europe and Indonesia -- actually, Asia. So all these unplanned outages, they are -- they happen and they are coming online as and when basically they are starting. On the fire incidents in Indonesia. So this is at one of a site for PTA, PET and Fibers site. So this has been fully covered by the loss of property damages as well as the loss of profit insurance. So you might have noted that we have a $30 million insurance income, which has come in the U.S. So a very similar way this fire incident is also covered by insurance. On this $12 million impairment, so this is Wellman. We have mentioned that Wellman deal has been completed, so it has been divested. So there has been some residual expenses and some land revaluations, so that has been reversed. So that's for that one. Exceptional expenses. So these are basically some severance costs related to Wellman and some other sites and some foreign exchange items. So that's that. $8 million income is some extra incentives and some recovery of the past dues. So all these are exceptional items. So they have taken below EBITDA, about $22 million net impact on that. There's one more question. How much is the insurance income recognized this quarter? And what's the underlying incidence on nature of the claim? So as we mentioned that this is in the U.S. So partly, it is for the CPET segment and partly it's in Indovinya. So I can see there are fewer hand raised, so I can invite Komsun. You have got your hand raised. Can you please ask your question...

There was a question on negative tax. If you can answer, otherwise I can answer it..

Negative tax, yes.

I can answer that. So you're right, there is about THB 970 million of tax reversals and refunds. It consists of one tax refund in Europe of about [ 170 million ] and certain reversal of tax liabilities in U.S. and Brazil, which effectively gave a reversal of THB 970 million. So if you take out that, then ETR reduces from 65% to 17%, in cash and noncash both.

Thank you. Komsun, can you hear us? Can you ask your question?

Yes. Vikash, can you hear me?

Yes, please go ahead.

I got a few questions for Muthu. First one is you mentioned about China anti-involution. Can you give us an update? I thought we should have the results by the end of October, but so far, we haven't heard anything much. And secondly, a lot of people in other segments saying the spread has been bottoming out. Can we say -- to say that for PET spread that we have seen at the moment, which is $115, $120 a barrel? And the last -- and the third one is, can you give us more color on the impact of the PET tariff U.S., as you mentioned, along with the extension of Brazil tariffs? And for Mr. Lohia here, can you give a little more color as to what you mentioned about the [ MTBE ] plans early on? And lastly, in summary, what big cost reduction target that you have been mentioned or touched during the presentation for 2026, which is on top of 25% target that we nearly achieved?

Thank you, Komsun. So on the anti-involution, the last meet, analyst meet a few months back, we did talk about, that's when this got introduced. And you're right that at the time, we mentioned that from the authorities, we are expecting further updates during October. Now directionally, if you see the meeting that they call for with the large players of both PTA and PET, that is setting some momentum to this whole initiative. While we are still waiting for very clear regulations or directions, what they have issued so far, which means that assets which are not energy efficient, which are not competitive, they are going to be reviewed. But also in the recent meeting, as we have come to know, they have talked about not going to give any more licenses for new PTA capacities unless the older capacities are replaced. And they have taken very detailed information from the players on their capacities, operating rates, cost structure, all of these are being reviewed by the authorities. So this is what we mentioned earlier during my remarks that this is something that we will have to continue to monitor. And what Mr. Lohia talked about, the government intervention. That is now starting to happen, be it in China. We are seeing the same thing in Korea and what the European Commission is paying attention to the trade measures. So this is certainly something that we will monitor and we will keep you updated in every meet. As far as spreads are concerned, they have -- they continue to be challenged, the integrated spreads. Now what has happened this year is throughout the last quarters. In PET, there has been about around 2 million tons of capacity that got added. One thing that we saw since middle of this year is there is improved discipline by Chinese PET producers on the operating rate. That is the behavior that we have seen. And also, we have talked about the new capacity build after 2025 is very limited. So the next capacity is less than 0.5 million tons in early '27. As you can see in this chart, it's drastically reducing the new capacity build. But as we have talked before, there is still a large capacity overhang in China. In the last 3 years, about 12 million tons of PET capacity got added and about 2 million to 2.5 million tons of capacity has been taken out. So net about 10 million tons has been added. So this capacity overhang remains, but the signals that is happening in terms of the new capacity additions slowing down and the government intervention, this is something that we will have to continue to monitor. Of course, we have been cautious on the spreads, but we are now a lot more focused on the controllables through our management actions that -- what Kumar talked about. On your question on PET tariffs in the U.S., right now, we are going through the contract negotiations for 2026. The tariffs, as you know, for us, being integrated players in U.S. and we have presence in paraxylene, PTA, PIA and PET, and the tariffs are applicable across. So we see it as beneficial, but we are still going through the contract negotiations, and we will be able to give you more color on this during the next week. I hope that answers your question.

So I was trying to explain the debt in my own way, in my own lens. So if somebody could put on the working capital slide, again. What you have seen is that our net debt levels have actually increased over the last 3 years from $6.9 billion to $7.2 billion. And the way I think about that is, okay, we did not do any of the capital increase projects like Indovinya IPO or Indovida IPO. So none of those cash flows have come through to reduce the debt. From the operations also, as is evident, the operating cash flows or the EBITDA from the businesses are lower. So they are not helping to reduce the cash flow. The generation of cash flow that we are doing, based on the current level of EBITDA generation, is barely able to cover -- if you can go to the CapEx slide. So in the last 1 year, the net working capital has not really reduced, as you saw in the previous slide. In this last -- and this year, year-to-date, we have spent nearly $450 million on different CapExs, [ MTBs, ] equity, et cetera. And that, plus the dividend has basically eaten up all the operating cash flow that the business generated. So this is just a different way of how I'm looking at the things that we are not able to deliver on the net debt reduction while the EBITDA is coming down, therefore, the -- net debt-to-EBITDA multiple is getting worse. So I'm putting on, with my team, the thought that, okay. Where are we? Why are we here? And that is what I'm sharing with you, my perspective on how I'm looking at the numbers. Yes, the net debt-to-EBITDA levels are a level that is not so good for IVL. It restrains IVL from doing many strategic things that it would intend to do. We have deferred Valor, the project in India for the time being. We are not working on that anymore. We stopped spending money on that, time on that. We are concentrating and doing only very, very essential, more sustainability-linked investments like Diego mentioned about Jiaren, the chemical recycling project using textile waste. So we are doing niches rather than -- and I do agree with our management that it is not the time to take off on some of the larger projects that are in the minds of the people. So until we are able to really get this working capital reduction, each of my segment talks about working capital reduction, and I don't see it and therefore, I spend a lot of time trying to work with them and saying, where is this money? Where has this money gone? And essentially, it's not gone into a reduction of debt. And therefore, I put this transformation slide, if you go to the asset optimization slide, and we talk about very different numbers that we're going to get $170 million, $180 million of fixed cost reduction. So I said, where is it? So now these are numbers that we have got into our books. So we have -- we have rationalized 2.7 million tons of capacity, and we would have been in a precarious situation if we had not done that. Can you imagine even after all the rationalization, which is like 15% of our capacity, our operating rates are -- what was it Vikash? We -- the number of priorities we are dealing with is like more than the time we have. So I can understand my entire management team is really struggling with time and priorities. So I'm sort of looking at a bigger picture and saying that, okay, are doing the right things? Are we doing the right priorities? Are we focusing on the right stuff? Are we taking on too much at individual level? Are we building our talent pipeline? Are we getting our middle managers involved? Are we really getting everyone in the firm to appreciate the situation of the chemical industry, the situation of IVL portfolio? So I feel proud that we have taken early actions on the items that needed to be get taken. And thanks to that. We are in a situation where I can now say that we are ready. We are prepared for the next years, even in this tough environment. we would start seeing better quality of earnings. We have a few projects, and I call it a bunch of collaborations and partnerships that I'm working on personally. So we will get through this storm. And I think what is important also is that I'm seeing that we are now getting the ear of the regulators, of the governments who are willing to incentivize our industry and protect the industry. So I think the two big things that need to happen is the Ukraine-Russian situation, that needs to get resolved so that the water level can stabilize, the oil prices can stabilize at where they need to be. Obviously, looking at the oil price, it's clear that even with all the sanctions and the -- and all the talk around Russian crude and Iranian crude, et cetera, et cetera, there is enough crude in the marketplace. And therefore, the price of oil is down 15%, 20% over a year. Now what does that mean to me? It means to me that, okay, these economies that are the oil-producing economies, they also have budget to balance. So they're not happy with the $65 oil. And when the oil prices are coming down, it's also dragging down sentiments for our industry. So there is a whole impact of the energy crisis and it is not yet resolved. Secondly, where the Trump tariffs settle on India and China are also going to play an important part because these are two large economies, and the disbalance from the exports from China going into South America. Alastair, Indovinya tells me that they've never seen imports from India into Brazil, into Argentina. So all of this needs to settle down. Plus for a while last year in 2024, we probably benefited from the higher freight cost being a regional player that -- now obviously, these things are going to settle down with the Middle East crisis settled. So as the whole global environment settles for us, I think we are ready. And therefore, that was my viewpoint that I've had a deep look at our business, I've had a deep look at each of our segments. I believe each of these segments have a strategy, have a plan. And we would like to share that with you at the next CMD. Thank you.

Thank you, Khun Komsun. I can see Mayank, Morgan Stanley. Can you hear us? Can you ask your question?

So I had a strategic question for Mr. Lohia. I think thank you sir for your explanation in the previous answer. I think you talked about that 15% capacity rationalization that you've already done. But as you kind of look through all the sites, which I think you have done clinically across all your portfolio, where do you see opportunities to further do a lot more on the cost side without impacting your volumes? And is there areas which you can kind of highlight, especially I think a lot of people have been concerned around Europe, as you have been highlighting as well. You have 30 sites there, pretty much. So anything you can kind of highlight on that front strategically where you think over the next 3 to 5 years, Indorama kind of settles?

Mayank, I have to sit down with you and talk about your refinery report soon. I haven't had the time. Anyway, the biggest project that I'm personally overlooking is Project Rebound, which is our EO/EG assets in Houston and Louisiana. They've been underperforming and sucking a lot of our capital. So it was important for me to know that whether those assets will make money for the company. And I'm glad that in the last 3 months, I think we are now 3 months here, 3 months into that project. And only by going deep into that project personally. And basically, we took over that project from a review standpoint. Operations are still under Kumar, but we took over the review of that project to understand the underlying factors. And the good news is that it will earn a return on capital, but we need to make some investments on the reliability front. So -- and which is fine. So we would do that. We are just waiting for the final report. I personally went -- actually, Sanjay went a couple of times to the U.S. to understand that deeply. I went there a month ago. So now that was my biggest worry, Mayank, and I would have felt uncomfortable if I had not done that review. So that is one very large pivot. Second is the opportunities. We have a PIA business. We are the only producer in Europe. There's only one producer in U.S.A. We believe that there's going to be some shakeout in this industry. So we may remain to be the only producer in the Western world. How do we leverage on that? How do we improve our business from that is something that is being worked out at the moment. So that's as far as the West is concerned. If I can work out Spain's PIA business, then that will take care of the remaining PTA that I have over there. And remember, there's a PTA Brussels activity on that to see if it merits a trade action. On the PET, because we have a a good cost base Lithuania plant, we have a good cost base Poland plant, and then we have Spain where we make our own PTA. So I think the Spain side should do all right. And Lithuania and Poland, because of its cost structure would do all right. There are a lot of things, smaller things that we have in Europe under Fiber. We have nothing under Indovinya, we have nothing under Indovida. We have some on recycling, which we have to fix. The recycling platform has sucked a lot of our money and not provided much return. It's provided a lot of good goodwill with our brand owners, but in terms of money, not. So Diego, are you prepared to talk a little bit about Europe, but not now, let me just complete the rest of my thoughts on that? So on the strategy front, then it comes to Asia. In Asia, okay, India was a very weak market because of monsoons, terrible monsoons. We saw very poor results from -- we saw poor results from our customers in India, and we also felt it. Indonesia is still a concern. We have a PTA plant in Indonesia. Remember, we have impaired our -- one of our PTA plants in Thailand of the two. So the larger PTA plant in Thailand is good. That is a very good plant. So in Indonesia, we have one smaller PTA asset, and I'm working on how to look at that. There are three PTA producers in Indonesia. So there is some work still to be done on that asset to understand its fitment and its need within the group. So Indonesia needs a little bit of more study, which is going on. Yash is handling that. Thailand also needs a little bit more work on our polyester -- on our PTA, PET and work is going on, on that. And again, Yash is looking at that. So the way we are organized is Yash is looking at these strategic things together with me, while Muthu and Kumar are working on the operations, et cetera. So I mean there's a long list of laundry items, Mayank, but none of them have been ignored. Diego?

Sir, before you pass it on, can I just ask you on the EO/EG side, which, as you said, is kind of sucking a lot of capital of yours and I suppose mental capital as well. Can you just highlight of what you think will kind of be the end game there on those assets?

They will -- there's a long history on that. If I say that we bought this Louisiana cracker from Oxi. We just shut down cracker. It was shut down 20 years before we bought it. We thought we could fix it, reopen it. We struggled with that. Finally, Alastair and Chad or Alastair's team, they stepped in when we bought that part of Huntsman Chemical. They did a good job, they got it started up. They got it started up, but it's not been operating at that reliability factor that a cracker can. A cracker should be operating at 90-plus operating rate. And I mean, not -- you can't control the weather-related events, ignoring those. But on its own, it should be operating at 90-plus. And my ask is why is it not? And now I think I believe that Chad has given me assurance that, yes, it will. There needs to be a little capital spend on it. Maybe I can ask Alastair to expand on that. Plus the same thing for the Clear Lake, IVOG EO/EG site. The MTBE/PO site of IC is fine, intermediate chemicals. So Rebound doesn't need to do anything on the MTBE, MTBE is a cyclical play. But the Clear Lake and the Louisiana sites, those two may be what are the fixes that -- because it's more technical than I can explain. So I'll ask Alastair to explain that part and Diego to explain the European part. But I'm comfortable. Basically, I can only tell you in macro that it was a concern, and I'm getting more comfortable with that. Go ahead, Diego and then Alastair.

Mayank, so just to complete the Fiber picture. Our focus, as Mr. Lohia has said, is mostly on the European assets. I'm not ready today to give you exact details of which assets, but we have some active projects. And so what we are doing right now, we are moving some products that have good margin in other facility in Asia, in Thailand and in China. And we are also moving some other products to the United States where we are maybe for certain markets like hygiene, we have a little bit more protection by the tariff. So we are continuously focusing, I would say, most of our activity in the next couple of years will be in Europe. And I think by mid next year, maybe beginning of second quarter, we'll be in a position to provide a more detailed information that we can do today. Alastair?

Thanks, Diego. Yes. So if we think about those assets at Louisiana and Clear Lake, there's been a big deep dive on benchmarking and how we're doing against other peer crackers. As Mr. Lohia said, it's gone through its trials and tribulations of startup. I think what we've done is built a very good team of operators and managers and maintenance people who know how to operate those plants really well. So when they operate, they operate at a really good standard. There's one or two areas of single point failures that we've found, and Mr. Lohia here has been talking about some of the reliability actions. It's how do you remove those and make sure those assets stay online all of the time, along with some projects that could uplift the margin and EBITDA for each of the plants. So those are the projects we're looking at. And I think during the course of this week, we'll be reviewing those with the senior team as to whether we support it and move forward. So a lot of commitment on the plants, a lot of commitment with the teams, and I think we've got some good actions to move forward on.

Thank you, Mayank. If you don't have any follow-up questions, I request Sumedh from JPMorgan. I can see you have raised your hand, Sumedh.

Can you hear me?

Yes, we can hear you, Sumedh. Please go ahead.

Okay. Perfect. So again, I think similar questions on the strategic lines. I recall in the 2025 CMD, there was a mention of some kind of strategic partnership to obviously tackle the industry oversupply. I'm just curious whether there is any progress on that, or is there anything sort of out-of-the-box solution that you may have apart from just closing down assets on your side. So that's my question one. And secondly, just on the PET side, right, obviously, it's a flagship business. And yes, I understand there is still a lot of overcapacity that needs to be absorbed. But what can change the industry dynamic and make it go back to sort of those above breakeven margins? I mean I understand the $110 that we see for the last 6 months won't be profitable for many players. So what needs to change here?

I'll tell you. So no, there are no more large capacities that we need to take down. I think we need to work on these collaborations and partnerships that I mentioned in the CMD, one of them was called Horizon. Horizon has made a lot of progress since then. And we should be able to announce more about the Horizon, I hope in the first quarter, hopefully by CMD. There's another Horizon 2 that I'm working on for a similar concept. And again -- so these don't need any capacity rationalization. So the large capacity rationalization in the CPET area have been taken already. There was concern around Spain, there was concern about the IC portfolio that we discussed already. And I think we'll be able to sort that out. On what is going -- what will it need to fix this situation? We, as a Southeast Asian producer, are squeezed between two giants: China and India. These two giants have built these very integrated large-scale capacities from oil to chemicals. And for them, a PET doesn't even figure in the dashboard. These owners of large PET capacities, PTA capacities don't even probably know they exist. It's just a way to exit this team, exhale this team out of. So are they making money? When I meet the olefin players and the olefin players say that maybe we are seeing -- and I think one of you mentioned that there is some sense of margins improvement in the industry. That probably is a sentiment that we are not seeing in the polyester value chain, for sure. What happens in the olefin industry is there's a big arbitrage between oil price and gas price. There's this whole equation whether ethane prices will continue to rise or will rise because of all the export Mr. Trump is driving for. While all this surplus oil and electrification is driving the price of crude oil down. So if that arbitrage improves for the naphtha-based petrochemical players, they could continue with these margins. They won't make a return on the investment, but they'll be better off than stand-alone businesses. So that is my take on that. And unfortunately, there's not enough foresight or analysis or ability to say what that arbitrage is between ethane and naphtha. I've been not able to put -- but since I wasn't able to get to an answer on that, that's why I pushed Valor out. So Valor is known because -- Valor, I don't know, we never probably explained it. It was a family-led project because IVL didn't have the capacity to do it. It was based on importing ethane into India and building a whole host of petrochemical downstream assets under it. But in this environment, it is obviously not clear. So we are going to wait. That's the best description I can give you, which is no description, I would say, from your standpoint. But till we understand the arbitrage between ethane and crude, we are not able to save -- if the crude oil prices went up to $70-plus, that will help. If ethane price is steady where they are today, that will help. And therefore, then all these large integrated players, they would have to look at each of the components to see that they don't lose money or throw money just to get market share, just to keep downstream operating. It's a little bit more complex. It's quite complex, but all hands on deck, all studies going on. Hopefully, I can share more with you at CMD.

Just it's interesting that you mentioned that effectively, in a way, the PET fortunes are aligned with naphtha crackers. Is that what we are trying to...

Absolutely because now all these large capacities, the large refineries that have been built in China, especially and some still being built in India, they all have aromatic and olefin in it. They have both paraxylene, PTA and downstream. So you can imagine that the PET and PTA component of these $10 billion, $15 billion investments where you only put $1 billion in PTA and PET, it's just an exit route for the upstream molecules. That's my -- at least that's my personal view on it. I'm doing more work on it, studying it a bit more. Maybe you guys can help me with your research. That's why I said to Mayank, I want to study this refinery report a bit more.

Thank you, Sumedh. If you don't have any follow-up, then I can go to Khun Naphat from CLSA. Can you hear us, Khun Naphat?

Vikash, yes, I can hear you. I have two questions. First is on the operations because it seems to me that we are still facing a lot of challenges on the industry side. And I noticed that our EBITDA coming down from USD 450 million a quarter now to USD 350 million last quarter and now to below USD 300 million. And we also have done a lot of asset optimization efficiency program and cost reduction. So I wonder if assuming we are using the current spread, what is -- what would be the -- and if we remove the one-off items from our operations, what would be the breakeven at the EBITDA level for IVL today?

Khun Naphat, Aloke here. When you think of breakeven, which breakeven point are you looking at, Vikash?

Khun Naphat, you're talking about the breakeven to the net profit, I believe?

Breakeven at the EBITDA level because the thing that I read our financial statement in the last few quarters is we are at the border line between making profit and [ staying ] loss. But some quarter, our earnings are swing by the inventory gain loss and also one-off items. So I'd like to have some base understanding the EBITDA level that will be breakeven.

I think Khun Naphat, if we go back to my portion where I was talking about why the net debt is not reducing without any capital actions, okay? So the net debt is not reducing, partly, okay, with some interest rate reductions as that has started now, maybe the next couple of years will give us some relief on the interest cost. But otherwise, we have not really improved on our working capital management. So see the working capital, we are still at 90-plus days. So when each management tells me you've reduced, reduced, I keep looking for it, where is it. So I'm still going to work on getting some money out of this working capital, and that will go towards reduction of our net debt. And then they talk about we'll make so much -- we are going to make so much transformation improvements. So that's why I put the asset footprint sheet that, okay, you guys talk about $190 million, $180 million, where is it? So we figured out, okay, we have got the $126 million related to these assets on the right, the Rotterdam, the Portugal, the Canada, the Australia, Wellman. These are the ones that have gone through the books. They're out of our scrutiny. We only have to collect some recoveries from the land and some sales of scrap, et cetera. So we'll get $200 million over here that will go for debt reduction. And because of this $126 million saving in fixed costs, if you go to the fixed cost slide, you see that we have been able to at least conserve our cash flow that we could fight inflation. If we would not have done that, we would have spent another $400 million, $500 million. If we would not have done the rationalization, if we would not have done -- very keenly looking at our cost structure, that $2.4 billion LTM 3Q '23 cost would have ballooned to $2.7 billion, $2.8 billion, $2.9 billion, which has dropped down to $2.2 billion. So we have been able to fight inflation. And I must give full credit to my management for being able to at least overcome the inflation cost. But there is small work to be done. When Fiber says that they've been able to reduce their cost, and I believe they have reduced the cost. I just want to now get this all these reconciliations done. So I don't want to talk in hype, I don't want -- I just want to reconcile numbers. And therefore, now today, I saw that CPET is saying $50 million or something. So that $50 million, I will make sure that this $50 million comes through. So there's no more people trying to who drink or say things for the sake of saying. I want to see reconciled numbers. That's all I can say Khun Naphat. So the test is net debt. And the breakeven point for net debt is what you saw in this year. In this year, we have made a certain EBITDA, and we have made certain CapExes, whether it's turnaround related or maintenance related or growth related. And we are paying bare minimum dividends. So I don't intend to reduce the dividend. So the cash flows that are coming from this current business and in current situation is just meeting our day-to-day. We can eat three meals a day. If you want to reduce our net debt, which is essential so that then we can start looking at growth. For that, we need more transformation actions and a better industry environment. I hope that helps you understand that the breakeven -- I'm looking at breakeven as what -- at these levels, I think we are at breakeven already. And these are the lowest we have ever tested.

So you do sound to me like next year, when we talk about the tariff impact from U.S. And in the MD&A, we mentioned about additional EBITDA about USD 70 million next year coming from the margin enhancement in U.S. So would I -- is it fair to say that next year, we are looking at the CPET operations are improving year-on-year?

Absolutely. I mean, otherwise, you fire this management. You can fire me and I fire them.

Okay. Maybe one add-on question is on the deleveraging plan since you touched on the debt level. Can you update us on the deleveraging plan because I know that we are -- we were planning to sell down the cross-town asset, the noncore asset and also IPO in two business units. What are the plans now? And are we still targeting to complete all these three, four plans in '26?

No. So Indovinya IPO would not happen in '26, looking at the market situation now. We are ready to file, but we don't want to file because that would bring additional pressure to maintain the filing. So I will only file it when the market sentiments in Europe for industrial goods improve. So that is deferred to '27, so not '26. The Indovida, the packaging IPO, we are not doing that because we are looking at the growth. We have made one investment in EPL, India. I think there's a play over there where we are going to grow that business into a global firm. This $500 million revenue business is not good. We need to make it $5 billion. So that is where -- so that pivot is no more taking it through a listing to raise equity to delever. It is more to grow that business because as we are talking about CPET, there's very little room for growth in CPET. Fiber, there's a lot still more transformation work to be done. For me, only Indovinya and packaging are the two businesses to grow. So I'm working on both of them. So that deleveraging from IPO money proceeds is not going to happen and it's off the plan. But there are a lot of balance sheet improvements and quality of earnings improvements that are going to emerge from these partnerships and the synergies that these partnerships will bring.

Thank you, Khun Naphat. I don't see any other hand raised. There are no more questions left. So thank you very much. We can bring the meeting to close, and we look forward to be in touch with you. If you have any questions, please do contact IR team. Thank you.

Thank you.