UAE petchem giant Borouge posts 33% second-quarter profit leap

UAE petrochemical firm Borouge said its second-quarter net profit surged by 33 per cent year-on-year (YoY) to $308m, driven by higher production volumes, increased sales and improved cost efficiencies.

The company attributed its profitability to sustained price premia for polyethene and polypropylene, which remained robust at $198 and $138 per tonne, respectively.

Borouge reported revenue of $1.5bn in the three months to June 30, up 6 per cent YoY, while its earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose by 18% YoY to $613m. The polyefins producer reported income of $308m in Q2 2024.

“We are delivering exceptional financial and operational performance, highlighting the company’s remarkable strength and resilience. Borouge stands out globally for its operational excellence and determined focus on value creation, as reflected in peak utilisation rates, record production,” said Hazeem Sultan Al Suwaidi, CEO of Borouge.

“We will deliver a transformational increase in production volumes through the Borouge 4 complex, our second ethylene unit EU2, and as part of a consortium that is drawing plans for a new speciality polyolefins plant in China. An ambitious artificial intelligence programme is also powering growth and enhancing productivity, safety and sustainability to unlock significant financial value.”

The company is leveraging its competitive advantage in the Asia Pacific, the Middle East, and Africa, supported by innovation, operational excellence and an extensive sales and marketing network.

Borouge said in a bourse filing that Asia Pacific accounted for about two-thirds of sales, the same as a year prior, while the Middle East and Africa made up 28 per cent of sales, up from 27 per cent at the end of June 2023.

Borouge’s growth strategy

Meanwhile, a consortium of Abu Dhabi state-backed firms, led by Borouge, signed an agreement last week with China’s Wanhua Chemical and Wanrong New Materials (Fujian) to build a polyolefins complex in Fuzhou, Fujian Province.

The proposed complex is projected to produce 1.6 million tonnes per annum of speciality polyolefins.

The company said it has completed over 70 per cent completion of Borouge 4, which would increase its production capacity by 28 per cent. The project is expected to be completed by the end of next year and will add $1.5-1.9bn in annual revenue.

The polyefins producer is a joint venture between ADNOC Group and Borealis in which they hold a 54 per cent and 36 per cent stake, respectively. Borealis is a joint venture owned in which Austria’s OMV owns 75 per cent and ADNOC owns 25 per cent.

ADNOC said it is still negotiating with OMV over the proposed merger between Borouge and Borealis. The deal is expected to create a petrochemicals giant worth more than $32bn (EUR30bn).

Read: Borouge, ADNOC to develop specialty polyolefins complex in China