Despite challenging market conditions and a 16 percent decline in global average selling prices of polyolefins from peak levels in 2022, Abu Dhabi-based Borouge reported a 16 percent year-on-year increase in net profit in the fourth quarter of 2023.
The $288 million net profit for the fourth quarter of 2023 – an increase of two percent quarter-on-quarter – brought its full-year net profit to $1 billion. It was the third consecutive increase in quarterly earnings for the company that is owned by ADNOC and Borealis.
The company said prudent cost management played a big role in the profitability. Its focus on operational and commercial excellence paid dividends and costs in the fourth quarter were 16 percent lower year-on-year.
The company’s Value Enhancement Programme achieved a positive impact of $607 million, surpassing both its initial 2023 target of $400 million and the revised target of $500 million.
Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, commented: “Operational efficiencies played a significant role in driving bottom-line performance with our Value Enhancement Programme delivering beyond its set targets. We maintained a clear focus on cost discipline with zero compromise on safety, product innovation and quality.
“Building on our strong dividend track record, we are pleased to announce our intention to distribute $1.3 billion in cash dividends for 2024.”
Borouge will distribute 15.9 fils per share, equating to a 6.6 percent current dividend yield.
For the quarter ending 31 December 2023, revenue reached $1.5 billion, unchanged quarter-on-quarter and declining 6 percent on a year-on-year basis on weaker global demand. Borouge delivered a healthy EBITDA margin of 40 percent, up 6 percentage points compared to the previous year, owing to the company’s improved operational efficiencies and cost optimisation strategies.
Production was 2 percent higher year-on-year for Q4, while the company reduced the cost per tonne produced by 17 percent compared to Q4 of 2022.
Borouge 4 progress
Al Suwaidi added that Borouge 4 project, which is now over 50 percent complete and remains on target for 2025 start, will be pivotal in delivering the company’s growth aspirations.
The company is actively advancing its polyethylene production capabilities with Borouge 4, which is set to expand capacity by 1.4 million tonnes annually to a full production capacity of 6.4 million tonnes.
Borouge also informed Abu Dhabi Securities Exchange (ADX) that the Borouge 3 plant and associated feedstock operations are scheduled for a planned maintenance shutdown in 2024. This will impact annual volume by an estimated 500 kilo tonnes in 2024.
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