Borouge Plc, an Abu Dhabi-based petrochemical company has announced a net profit of $282M (AED 1.04B) for the quarter ending on 30th September, reflecting a 22% increase compared to the previous quarter.
Borouge exhibited resilience in a challenging global environment and a tough polyolefins market, thanks to strong production performance, focused cost management, and revenue optimization from its ambitious Value Enhancement Programme.
The Value Enhancement Programme by Borouge contributed positively, delivering a $420M impact in the first nine months of 2023, surpassing its ambitious target of $400M 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 $650M in the third quarter.”
According to previous market communications, the company has committed to a dividend of $1.3B (equal to 15.9 fils per share) for the 2023 financial year, resulting in a current dividend yield of 6.3%.
Key Points for the Quarter Ended 30th September:
- In the third quarter, revenue increased by 6% compared to the previous quarter, reaching $1.5B, but declined by 11% year-on-year.
- Borouge reported a net profit of $282M in the third quarter of 2023, which marked a 22% increase compared to the previous quarter, supported by a 16% rise in sales volumes. However, net profit decreased by 9% year-on-year.
- Despite market-related pricing challenges affecting both revenue and profit, Borouge achieved a healthy adjusted EBITDA margin of 40% in the third quarter, reflecting a 3% increase compared to the previous quarter. This indicates the company’s improved operational efficiencies.
- Cash conversion was robust at 97%, with a healthy adjusted operating free cash of $573M, up by 15% compared to the previous quarter. The positive impact of the Value Enhancement Programme and strong sales volumes due to robust operational performance partially offset the challenges arising from general market weaknesses. Borouge’s high production volumes of both polyethylene (PE) and polypropylene (PP) constituted 38% of total sales in the value-added infrastructure segment, underlining the unique appeal of Borouge’s products.
Key Highlights for the Nine Months Ended 30th September:
- In the first nine months of 2023, sales volume increased by over 2% year-on-year, reaching 3.8 million tonnes.
- Revenue for the period amounted to $4.3B, with adjusted EBITDA reaching $1.6B.
- Net profit for the period was $713M, impacted by a significant year-on-year decline in average selling prices compared to their peak levels in 2022. Increased volume partially offset this decline.
- Key Achievements:
- According to previous market communications, the company has committed to a dividend of $1.3B (equal to 15.9 fils per share) for the 2023 financial year, resulting in a current dividend yield of 6.3%.
- Key Points for the Quarter Ended 30th September:
- In the first nine months of 2023, sales volume increased by over 2% year-on-year, reaching 3.8 million tonnes.Revenue for the period amounted to $4.3B, with adjusted EBITDA reaching $1.6B.
- Net profit for the period was $713M, impacted by a significant year-on-year decline in average selling prices compared to their peak levels in 2022. Increased volume partially offset this decline.
Borouge’s Value Enhancement Programme exceeded its target of $400M, delivering a positive impact of $420M year-to-date in 2023, according to WAM.
The company now aims for a higher target of $500M for the Programme to counteract the sharp price decline in the current challenging market environment.
