Borouge attributed the profitability to its sustained price premia for polyethylene and polypropylene. Image by Borouge Company Petrochemical firm Borouge reported Wednesday a 33% year-on-year surge in net profit to $308 million in the second quarter of 2024, driven by higher sales and cost efficiencies.
Financial performance Revenue for the quarter was up 6% compared to the same quarter last year, reaching $1.5 billion, according to a bourse filing posted on the Abu Dhabi Exchange (ADX).
Borouge's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were up 18% to $613 million in the quarter, attributed to the increase in revenue and a 6% improvement in cost per ton. EBITDA margins were 41% in the second quarter, up from 37% in the previous year.
The company attributed the profitability to its sustained price premia for polyethylene and polypropylene, which remained at $198 and $138 per ton, respectively, in the second quarter.
For the first half, the company reported a 35% growth in net profit to $581 million, while revenue remained stable at $2.8 billion.
Borouge has reaffirmed its intention to maintain a $1.3 billion dividend for 2024.
Crucial quote "Our priority is to drive accelerated growth through capacity expansion, optimal productivity, and a focus on high-value customer segments," said CEO Hazeem Sultan Al Suwaidi in the statement.
Growth initiatives In July, Borouge initiated a feasibility study for a speciality polyolefins complex in China. The company will be a part of a consortium that intends to form a joint venture with a subsidiary controlled by Wanhua Chemical, Wanrong New Material (Fujian), to establish a plant in Fuzhou with a capacity of 1.6 million tons per year.
Borouge also completed over 70% of the Borouge 4 facility mega project in the UAE, which will increase production capacity by 28%, making Al Ruwais Industrial City the largest integrated single-site polyolefin complex in the world, it said. The project is on schedule for completion at the end of next year and is projected to generate an additional $1.5 to $1.9 billion in annual revenue. Once completed, the project will be transferred to Borouge's majority shareholders, ADNOC and Borealis.
Moreover, the company said that it is increasing capacity at its second ethylene unit (EU2), to raise production of olefins and polyolefins by a further 230,000 tons. The project is scheduled for completion in 2028, and is expected to contribute $220 - $250 million in annual revenue.
Polyolefins complex Borouge was founded in 1998 through a strategic partnership between ADNOC and Borealis, to build and operate a polyolefins complex in Al Ruwais Industrial City, UAE.
The company provides differentiated polyolefin solutions for the infrastructure, energy, mobility, healthcare, agriculture, and advanced packaging industries across 86 countries.
ADNOC owns a majority 54% stake and Borealis holds a 36% stake in Borouge.
In June 2022, the company raised more than $2 billion by offering 10% of its total issued share capital on ADX, becoming one of the Middle East’s largest-ever petrochemicals listings.
