Borouge, a leading UAE-based petrochemical company, has reported a net profit of $282 million for the quarter ended September 30, thus marking a 22% increase over the previous quarter.

 

Strong production performance, targeted cost management and revenue optimisation from its ambitious Value Enhancement Programme helped Borouge display resilience in the face of a subdued global environment and challenging polyolefins market.

 

Borouge’s Value Enhancement Programme delivered a $420 million positive impact in the first nine months of 2023, surpassing its ambitious target of $400 million for the 2023 financial year.

 

On the solid results, CEO Hazeem Sultan Al Suwaidi said: "Borouge has delivered robust operating and financial performance this quarter, leveraging the company’s competitive advantages and maintaining disciplined cost management."

 

"Consequently, sales volumes have grown, and we remain committed to innovation to expand market share and maintain strong pricing premia. Borouge has distributed an interim dividend of $650 million in the third quarter," he stated.

 

In line with previous market communication, the company has committed a dividend of $1.3 billion (15.9 fils per share) for the 2023 financial year, which equates to a 6.3% current dividend yield.

 

Third-quarter revenue increased 6% quarter-on-quarter, reaching $1.5 billion, and declined 11% year-on-year, he added. 

 

Borouge reported a net profit of $282 million in the third quarter of 2023, increasing by 22% quarter-on-quarter, supported by a 16% increase in sales volumes. On a year-on-year basis, net profit declined by 9%. 

While top- and bottom-line performance in the third quarter faced market-related pricing challenges, Borouge delivered a healthy adjusted ebitda margin of 40%, up 3% compared to the previous quarter, reflecting the company’s improved operational efficiencies.

 

Cash conversion was very strong at 97%, with a healthy adjusted operating free cash of $573 million, up 15% quarter-on-quarter. 

 

Pressures from the general market weakness were partially offset by the positive impact of the Value Enhancement Programme, as well as by healthy sales volumes on the back of strong operational performance. High production volumes of both polyethylene (PE) and polypropylene (PP) included 38% of total sales in the value-added infrastructure segment, representing the unique positioning of Borouge’s products.

 

In the first nine months of 2023, sales volume grew by more than 2% year-on-year to 3.8 million tonnes. Revenue for the period reached $4.3 billion, with adjusted ebitda reaching $1.6 billion, said the company in a statement. 

 

Net profit for the period was $713 million, impacted by a significant year-on-year decline in average selling prices compared to their peak levels in 2022 and partially offset by healthy additional volume, it added.-TradeArabia News Service