Borouge Plc, a leading petrochemicals company providing innovative and differentiated polyolefins with technology solutions, has reported a 33% year-on-year (YoY) increase in second-quarter net profit to US$ 308 million, powered by higher sales and cost efficiencies as the company recorded its highest ever production volumes.

Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) surged 18% YoY to $613 million in the second quarter (Q2), underpinned by a 6% increase in revenue and a 6% improvement in cost per tonne, reflecting sustained efficiencies from the Value Enhancement Programme that delivered a $607 million positive impact in 2023. Borouge maintained its industry leadership in profitability, with an EBITDA margin of 41% in Q2, up from 37% a year earlier.

Borouge’s premium products continued to drive strong sales performance, underlining the company’s resilience in a challenging global market environment for the wider petrochemicals industry.

A key driver of Borouge’s industry-leading profitability is its sustained price premia for polyethylene and polypropylene, which remained robust at $198 and $138 per tonne respectively in Q2.

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 volumes and industry-leading EBITDA margins. Our priority is to drive accelerated growth through capacity expansion, optimal productivity and a focus on high-value customer segments. 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 to unlock significant financial value.”

Outlook

Management anticipates a stable macro-economic environment in its core markets in the second half of 2024, with an improving operating environment marked by moderate GDP growth. Operationally, strong production levels and sales volumes are forecast to sustain a positive momentum, supported by a focus on realising greater efficiencies, while polyolefin prices are expected to remain stable, fluctuating within a narrow range. The scheduled maintenance of Borouge 3, previously planned for Q4 2024, with an estimated volume impact of 320,000 tonnes, has been moved to Q2 2025. The updated timeline is expected to optimise feedstock availability and unlock between $20-$40 million in EBITDA compared to plan.