Borouge , a leading petrochemical company that provides innovative and differentiated polyolefin solutions, announced its financial results for the three-month period ended 31 March 2023, with revenues of $1.38 billion and adjusted EBITDA of $460 million. The Company’s value enhancement programme has already delivered a significant impact of more than $100 million in efficiencies and revenue optimisation.

Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, commented: “We are pleased to report our Q1 2023 results, along with a number of important operational and strategic achievements. The turnaround of our Borouge 2 facility was successfully completed on time and on budget, returning our asset base to full production capacity from the second quarter onwards. We also made important strides forward in the execution of our value enhancement programme, achieving revenue optimisation gains and significant efficiencies in both fixed and variable costs. We will be looking to build on this strong progress throughout the year.”

“In April, we were pleased to pay a final dividend of $650 million to shareholders, bringing total post-IPO dividends for 2022 to $975 million, and we remain committed to paying dividends of $1.3 billion for the year 2023.” Highlights for the three months to 31 March 2023: Pricing premia for polyethylene (PE) and polypropylene (PP) improved compared to the previous quarter, by 22% for PE and 17% for PP, to reach $264 and $137 respectively. As such, Borouge maintained its healthy polyolefin pricing premia, a key competitive advantage for the business.

Quarterly sales volumes of 1,157kt increased by 5.1% year-on-year, with constraints on volumes vs. the previous quarter, and revenue stood at $1.38 billion. Lower quarterly production volumes were due to the planned one-off impact of the Borouge 2 turnaround, which has been implemented in line with its expected timetable and within budget. The turnaround was successfully completed on 17 March 2023, with 200kt returned to Borouge’s total production capacity. It forms part of Borouge’s regular plant maintenance schedule, which aims to keep its world-class asset base well-maintained and support industry-leading reliability and efficiency of operations.

Borouge delivered adjusted EBITDA of $460 million in the first quarter. A stable EBITDA margin of 33.3% reflected material efficiencies from the value enhancement programme, as well as higher revenues from product mix and differentiation, which partially offset the impact of lower production volumes. Net profit for the period was $199 million, with lower sales volumes partially offset by strengthening prices. Cash conversion in the first quarter was very strong, at 82%, with Capex increasing by 8% quarter-on-quarter in support of the Borouge 2 turnaround.

Activity in Borouge’s core Asia Pacific and Middle East markets remains stronger than in developed markets, with economic growth rates ahead of developed economies. Management expects stable polyolefin demand growth in its core territories and for sales volumes to return to levels equivalent to production volumes. The Company’s differentiated product portfolio, enabled by Borstar® technology, its innovation capabilities, and integrated go-to-market approach result in a sustained and strong market position, with Borouge able to tactically place all volumes in response to changes in demand. Management expects to continue to achieve product pricing premia in line with its over-the-cycle mid-term guidance of $200/tonne for PE and $140/tonne for PP.

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