Borouge’s overall production capacity grew by 7.9 per cent year-on-year.
Borouge on Friday announced its financial results for the nine-month and three-month periods ended Sept.30, 2022, with the Company maintaining positive year-to-date performance driven by strong sales volumes.
Borouge reported a 13.5 per cent increase in revenue to $5.13 billion for the nine months to Sept.30, 2022, versus the same period in the prior year.
The increase in revenue over the nine months was driven by an 11.9 per cent increase in total sales volumes, with polypropylene (PP) volumes up 14.7 per cent.
Overall production capacity grew by 7.9 per cent year-on-year as the ramp-up of the PP5 plant was completed. PP5 commenced production of more differentiated and premium grades in the third quarter.
Adjusted Ebitda declined by 3.6 per cent to $2.10 billion due to globally elevated logistics and material costs, however, the Company saw a slight reduction in these costs towards the end of the third quarter.
For the three months to 30th September 2022, revenue increased by 8.0 per cent year-on-year to $1.67 billion, driven by sales volume growth. Total sales volume in the three months increased by 18.1 per cent year-on-year to 1,341kt.
Borouge’s strong volume growth partially offset the decline in its average selling prices, which were impacted by global supply and pricing pressures.
Borouge’s pricing premia remained higher than the Company’s medium-term guidance – a key competitive advantage for the business. For the third quarter, Borouge delivered adjusted EBITDA of $593 million and a profit for the period of $308 million.
Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, commented, “We are pleased to report our third quarter and nine-month results, with strong year-to-date performance for revenue and sales volume delivered across our business. We have achieved this despite global supply and pricing pressures; these results demonstrate our ability to continually innovate, providing a broader product mix to industries and customers worldwide.
“Our infrastructure solutions continue to grow their share of our end product market, accounting for 46 per cent in the third quarter and remain a priority as we differentiate our offering from global peers. Importantly, we have been able to maintain our premia above benchmark pricing in the market, which is a testament to the efficiency of our operations and the quality of the products we offer.”
Borouge confirms its mid-term guidance on premia of $200/tonne for PE and $140/tonne for PP. Sales volumes are expected to return to levels equivalent to production volumes through the current quarter, with demand in Borouge’s core Asia and Middle East markets expected to outperform global developed markets.
With strong cash conversion throughout 2022, and in light of solid operational performance and a positive outlook for the fourth quarter, Borouge reiterates its commitment to pay $975 million in dividends to shareholders for FY 2022, and at least $1.3 billion for FY 2023.
In October 2022, the Company paid an interim dividend of $325 million, equivalent to Dhs1.2 billion or 3.97 fils per share. Based on the current view, Borouge management remains confident the Company will meet market expectations for net profit for FY 2022.
Following its listing, Borouge was included in the FTSE Global Equity Index Series, which is used by investors globally to inform asset allocation decisions and support portfolio construction. Inclusion in these key indices indicates strong recognition of Borouge and underlines the Company’s relevance to the global institutional investor base that participated in its IPO. Meanwhile Borouge has announced that it collaborated with Ravago, a leader in recycling polyolefin raw materials, to produce and market sustainable solutions for its customers.
This enables Borouge to tap into a growing market of enhanced by-products in the Mena region, while helping lower the carbon footprint of manufacturing applications.
By-products occur in all manufacturing processes. The collaboration with Ravago involves the sorting and filtering of by-product polymers, which are then reprocessed, before recompounding them for sale to customers for use in value add manufacturing applications.
Maitha Al Marashi, Acting Senior Vice President, Corporate Affairs, Borouge commented, “Borouge is a responsible company and committed to providing more competitive and sustainable solutions for its customers.”
“Following the success of the first phase of our collaboration, we are assessing the addition of post-consumer recyclates (PCR) to the reprocessed by-products – enabling Borouge to further expand its Mena portfolio of circular solutions, while promoting higher recyclability in end-use products.”