Borouge profit rises to $273m despite revenue fall

Borouge

Petrochemicals major Borouge said its net profit for the first quarter of 2024 rose 37 percent to $273 million amid stronger price premium on high-value products.

The Abu Dhabi-listed company said revenue fell 6 percent year on year to $1.3 billion on planned feedstock-related operational maintenance.

Average sales prices increased quarter on quarter by 4 percent for polyethylene and 6 percent for polypropylene, compared to a 1 percent rise in global benchmark prices for both products. 

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As a result, the premium for polyethylene and polypropylene reached $222 and $162 per tonne, respectively, in the first quarter, exceeding the company’s guidance of $200 and $140 per tonne, respectively.

Borouge benefits from a major competitive advantage in key growth markets in Asia Pacific, the Middle East and Africa due to its products in sectors such as infrastructure, energy, agriculture, speciality packaging and healthcare. 

The petrochemical company plans to maintain the 2024 dividend at $1.3 billion.

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“Borouge is now entering a transformational phase in our growth journey,” said CEO Hazeem Sultan Al Suwaidi.

Work is continuing on Borouge 4 production facility, which is over 60 percent completed, he said, adding that the plant will raise annual capacity by 28 percent to 6.4 million tonnes. 

The company has reached feasibility stage on an opportunity in the Asia Pacific region, Al Suwaidi said, without giving details.  

Borouge is advancing plans for a second ethylene unit to increase total production of olefins and polyolefins by another 230,000 tonnes. After project completion in 2028, the unit is expected to contribute $220-$250 million in annual revenue. 

Total annual polyolefin production capacity will reach 6.5 million tonnes with the commissioning of Borouge 4 project.