Higher sales and cost efficiencies has helped Borouge post net profit of $308 million, up 33 percent year-on-year (YoY), for the second quarter of 2024.
The company recorded its highest-ever production volumes, leading to a 6 percent increase in revenue ($1.5 billion) and a 6 percent improvement in cost per tonne. Sales volumes increased 16 percent quarter-on-quarter (QoQ) driven by a focus on high-value segments, with infrastructure solutions contributing 41 percent of sales volumes.
Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by 18 percent YoY to $613 million. Borouge maintained its industry leadership in profitability, with an EBITDA margin of 41 percent in Q2, up from 37 percent a year earlier.
Borouge achieved record quarterly production levels, driven by capacity utilisation rates of 114 percent for polyethylene and 103 percent for polypropylene. A key factor of the company’s profitability is its sustained price premia for polyethylene and polypropylene, which remained robust at $198 and $138 per tonne respectively in Q2.
Average sales prices softened marginally in the quarter, with a small gain for polypropylene offset by a slight decline for polyethylene.
Asia Pacific accounted for 66 percent of sales volume, with the Middle East and Africa sales share increasing from 27 percent a year earlier to 28 percent.
Adjusted EBITDA increased to $613 million from $518 million a year earlier, with the company achieving management guidance on price premia despite the challenging market conditions.
Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, commented: “We are delivering exceptional financial and operational performance, highlighting the company’s remarkable strength and resilience. Borouge stands out globally for its operational excellence and determined focus on value creation, as reflected in peak utilisation rates, record production.
“We will deliver a transformational increase in production volumes through the Borouge 4 complex, our second ethylene unit EU2, and as part of a consortium that is drawing plans for a new speciality polyolefins plant in China. An ambitious artificial intelligence programme is also powering growth and enhancing productivity, safety and sustainability.”
For the first half of 2024, the company reported a net profit of $581 million, an increase of 35 percent YoY, with adjusted EBITDA increasing 21 percent to $1.18 billion. Revenue of $2.81 billion for H1 was unchanged from a year earlier, while costs, excluding depreciation and amortisation, decreased 11 percent through a continued commitment to rigorous cost management.
Borouge reaffirmed that it would maintain a $1.3 billion dividend for 2024, or 15.88 fils per share. Shareholders are scheduled to meet at a general meeting in the third quarter to approve the distribution of a 7.94 fils per share interim dividend.
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