Borouge quarterly profit falls 9% on lower sales prices

Borouge

• Drop in selling prices pushes profit down y-o-y
• Q3 sees 22% improvement on Q2
• Ebitda up 3% on previous quarter

Net profit at the Abu Dhabi petrochemicals firm Borouge for the third quarter 2023 fell 9 percent year-on-year to $282 million (AED1.04 billion) on a 15 percent drop in average selling prices.

However, the company’s profits rose 22 percent quarter on quarter, driven by robust production performance and cost management.

Third-quarter revenue fell 11 percent year on year to $1.5 billion but rose 6 percent quarter on quarter.

• Borouge profit down 50% as merger talks continue
• Abu Dhabi’s Borouge to pay $650m in dividends for 2022
• Borouge secures two new $15m contracts from UAE firms

The margin on earnings before interest tax and depreciation (ebitda), a core measure of profitability, stood at 40 percent, up 3 percent quarter on quarter, reflecting improved efficiencies.

In the first nine months of 2023, sales volume grew by more than 2 percent yearly to 3.8 million tonnes. Revenue for the period reached $4.3 billion, with adjusted ebitda at $1.6 billion.

Net profit for the nine months stood at $713 million, impacted by a significant decline in average selling prices compared to their peak levels in 2022 and partially offset by healthy additional volume.

The company said the overall market for polyolefins, mainly plastics used in packaging and manufacturing, “remains challenging, with pricing expected to operate within a narrow band of volatility throughout the fourth quarter of 2023.”

Borouge will pay an eventual $1.3 billion in dividends for 2023, of which $650 million was paid in September 2023.