ABU DHABI, 30th October, 2023 (WAM) — Borouge Plc has reported a net profit of $282 million (AED1.04 billion) for the quarter ended 30th September, marking a 22% increase over the previous quarter. production performance, targeted cost management and revenue optimisation from its ambitious Value Enhancement Programme helped Borouge display resilience in the face of a subdued global environment and challenging polyolefins market. Borouge’s Value Enhancement Programme delivered a $420 million positive impact in the first nine months of 2023, surpassing its ambitious target of $400 million for the 2023 financial year. Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, commented, “Borouge has delivered robust operating and financial performance this quarter, leveraging the company’s competitive advantages and maintaining disciplined cost management. Consequently, sales volumes have grown, and we remain committed to innovation to expand market share and maintain strong pricing premia. Borouge has distributed an interim dividend of $650 million in the third quarter.” In line with previous market communication, the company has committed a dividend of $1.3 billion (15.9 fils per share) for the 2023 financial year, which equates to a 6.3% current dividend yield. Highlights for the three months ended 30th September Third-quarter revenue increased 6% quarter-on-quarter, reaching $1.5 billion, and declined 11% year-on-year. Borouge reported a net profit of $282 million in the third quarter of 2023, increasing by 22% quarter-on-quarter, supported by a 16% increase in sales volumes. On a year-on-year basis, net profit declined by 9%. While top- and bottom-line performance in the third quarter faced market-related pricing challenges, Borouge delivered a healthy adjusted EBITDA margin of 40%, up 3% compared to the previous quarter, reflecting the company’s improved operational efficiencies. Cash conversion was very strong at 97%, with a healthy adjusted operating free cash of $573 million, up 15% quarter-on-quarter. Pressures from the general market weakness were partially offset by the positive impact of the Value Enhancement Programme, as well as by healthy sales volumes on the back of strong operational performance. High production volumes of both polyethylene (PE) and polypropylene (PP) included 38% of total sales in the value-added infrastructure segment, representing the unique positioning of Borouge’s products. Highlights for the nine months ended 30th September In the first nine months of 2023, sales volume grew by more than 2% year-on-year to 3.8 million tonnes. Revenue for the period reached $4.3 billion, with adjusted EBITDA reaching $1.6 billion. Net profit for the period was $713 million, impacted by a significant year-on-year decline in average selling prices compared to their peak levels in 2022 and partially offset by healthy additional volume. operational performance and global sales and distribution network delivering high sales volumes Borouge achieved very high production utilisation rates, with PE production at 104% and PP production at 109% for during the quarter. Complemented by its state-of-the-art manufacturing facilities in Ruwais, one of the world’s largest integrated polyolefin complexes, Borouge’s direct customer coverage, strong brand name and strategically located market presence across its target global sales markets enabled volume optimisation. This contributed to sales volumes of 1,395 kilo tonnes in the third quarter, representing a 16% quarter-on-quarter and 4% year-on-year increase. These higher volumes partially mitigated the impact of a 14% decline in average polyolefin selling prices during the period. Value Enhancement Programme outperforms, achieving a material $420 million positive impact Borouge’s Value Enhancement Programme successfully delivers cost efficiencies and revenue optimisation. Already exceeding its target of $400 million, the Programme has delivered a $420 million positive impact year-to-date in 2023. The company is now pursuing a higher target of $500 million for the Programme to mitigate the steep price decline in the current challenging market environment.

Source: Emirates News Agency