Borouge’s nine-month revenue hits $5.13bn on strong sales

Borouge, a major petrochemical company based in Abu Dhabi, has reported a 13.5% increase in revenue for the nine-month period ended September 30 to $5.13 billion over last year, mainly driven by strong sales volumes growth.

Borouge is a joint venture between Abu Dhabi National Oil Company (Adnoc) and Borealis, a leading international producer of chemical and plastics solutions headquartered in Austria.

The increase in revenue over the nine months was driven by an 11.9% increase in total sales volumes, with polypropylene (PP) volumes up 14.7%.

Overall production capacity grew by 7.9% year-on-year as the ramp-up of the PP5 plant was completed. PP5 commenced production of more differentiated and premium grades in the third quarter.

Adjusted ebitda declined by 3.6% to $2.10 billion due to globally elevated logistics and material costs, however, the Company saw a slight reduction in these costs towards the end of the third quarter.

For the three months ended September 30, revenue increased by 8% year-on-year to $1.67 billion, driven by sales volume growth. Total sales volume in the three months increased by 18.1% year-on-year to 1,341kt.

Borouge’s strong volume growth partially offset the decline in its average selling prices, which were impacted by global supply and pricing pressures.

CEO Hazeem Sultan Al Suwaidi said: “We are pleased to report our third quarter and nine-month results, with strong year-to-date performance for revenue and sales volume delivered across our business.”

“We have achieved this despite global supply and pricing pressures; these results demonstrate our ability to continually innovate, providing a broader product mix to industries and customers worldwide,” he noted.

“Our infrastructure solutions continue to grow their share of our end product market, accounting for 46% in the third quarter and remain a priority as we differentiate our offering from global peers. Importantly, we have been able to maintain our premia above benchmark pricing in the market, which is a testament to the efficiency of our operations and the quality of the products we offer,” he added.

With strong cash conversion throughout 2022, and in light of solid operational performance and a positive outlook for the fourth quarter, Borouge has reiterated its commitment to pay $975 million in dividends to shareholders for FY 2022, and at least $1.3 billion for FY 2023.

In October, the company had paid an interim dividend of $325 million, equivalent to AED1.2 billion or 3.97 fils per share. Based on the current view, Borouge management remains confident the company will meet market expectations for net profit for FY 2022.

Following its listing, Borouge was included in the FTSE Global Equity Index Series, which is used by investors globally to inform asset allocation decisions and support portfolio construction.

Inclusion in these key indices indicates strong recognition of Borouge and underlines the Company’s relevance to the global institutional investor base that participated in its IPO.-