Abu Dhabi, UAE — ADNOC joint venture Borouge Friday announced first-half revenues of $2.8 billion and adjusted EBITDA of $978 million.
Second-quarter revenue increased by 2.5 percent quarter-on-quarter, to reach $1.4 billion, and declined on a year-on-year basis.
Borouge reported net income of $231 million in Q2 2023, increasing by 16 percent compared to the first quarter, supported by a 4 percent increase in sales, but decreased compared to Q2 2022.
While top and bottom-line performance in Q2 faced year-on-year pricing challenges, Borouge delivered an EBITDA margin of 37 percent, up 10 percent compared to the previous quarter, reflecting improved operational efficiencies.
Strong volumes for both polyethylene (PE) and polypropylene (PP) included 40 percent of total sales to the value-added infrastructure segment, representing a high premia end market and strategic growth focus for Borouge, the company said.
In the first half of 2023, sales volumes grew by 1.5 percent year-on-year to 2.4 million metric tons. Net profit for the period was impacted due to a sharp 22 percent decline in average selling prices compared to their peak levels in Q2 2022, when prices were supported by a combination of high product benchmark rates and exceptional premia for PE and PP.
The company said its ambitious Value Enhancement Programme delivered a material $253 million impact in efficiencies and revenue optimization year to date and is a significant and positive contributor to countering external market pressures.
Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, commented, “In view of our robust financial position and very strong cash conversion, we are pleased to announce that our board has endorsed an interim dividend of $650 million to be approved by shareholders during the second half of the year and reiterated our commitment to pay $1.3 billion in dividends for 2023.”
The company also expects to realize further material results from its Value Enhancement Programme during the coming quarters.
In May last year, Borouge raised $2 billion through an initial public offering and was listed on the ADX. The IPO, which was about 42 times oversubscribed, was the largest listing in Abu Dhabi at the time.
On 15th July 2023, Abu Dhabi National Oil Company (ADNOC), Borouge’s majority shareholder, and OMV AG, Borealis AG majority shareholder, announced that they entered into formal negotiations regarding a potential merger of Borouge and Borealis.
