Borouge second-quarter profit soars 33% to $308mn

DUBAI: Borouge Plc, the Abu Dhabi-based petrochemicals giant, reported a 33per cent year-on-year increase in second quarter net profit to $308 million on higher sales and cost efficiencies.

The financial metrics for the second quarter are noteworthy. Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose 18 per cent year-on-year to $613 million, bolstered by a 6 per cent increase in revenue and an equivalent improvement in cost per tonne.

The fiscal growth propelled Borouge’s EBITDA margin to 41per cent, an increase from 37 per cent in the same quarter of the previous year, reaffirming its leadership in profitability amidst a challenging global market backdrop.

Borouge’s commitment to innovation and operational excellence has solidified its competitive stance in the Asia Pacific, Middle East, and Africa regions.

The company’s strategic focus on high-value segments, particularly premium products, has driven strong sales performance. This strategic alignment is further reflected in the sustained price premia for polyethylene and polypropylene, estimated at $198 and $138 per tonne, respectively, during second quarter.

Production volumes rise

Outstanding production levels marked this quarter, with capacity utilisation rates reaching a remarkable 114 per cent for polyethylene and 103 per cent for polypropylene. Such high performance is a direct result of Borouge’s relentless focus on process safety and operational reliability, achieving a commendable 97 per cent reliability rate in the second quarter.

Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, emphasised plans for a transformational increase in production volumes through upcoming projects, including the Borouge 4 complex and further development of a specialty polyolefins plant in China.

“Additionally, the integration of an ambitious artificial intelligence program aims to enhance productivity, safety, and sustainability, unlocking substantial financial value for the company.”

Borouge’s revenue for second quarter reached $1.5 billion, reflecting a 6 per cent year-on-year increase. Sales volumes surged 16 per cent quarter-on-quarter, strongly supported by infrastructure solutions, which constituted 41 per cent of total sales volumes.

Although average sales prices witnessed slight fluctuations, overall cost management strategies effectively reduced costs by 11 per cent in the first half of 2024.

Looking ahead, Borouge reaffirmed its commitment to shareholder returns, maintaining a $1.3 billion dividend plan for 2024, with an impending interim dividend of 7.94 fils per share scheduled for approval in the third quarter. These dividends highlight the company’s focus on delivering consistent value to its shareholders while navigating the complexities of the global petrochemical landscape.