ADNOC entity Borouge scores 5th straight quarter of solid profit growth
Petrochemicals firm closes 9-month 2024 with net profit of $908m
Dubai: Net profits for the ADNOC petrochemicals entity Borouge shot up in double-digits, with the nine-month tally at $908 million, up 27%. For the July to end September phase, the profit total was $328, this time featuring a sharp 16% year-on-year increase.
This is the fifth successive quarter of gains for the company.
“The third quarter (of 2024) was distinguished by record production levels and our highest-ever sales volume,” said Hazeem Sultan Al Suwaidi, CEO. “We are accelerating our growth trajectory through transformational production capacity increases."
Other factors helped as well. There was the increase in price premium on its products during the period. "Despite ongoing volatility in the global market, the company’s average polyethylene and polypropylene prices were $198 and $160 per tonne higher than their benchmarks – with that premium increasing 14% and 50% year-on-year," said the company. (The guidance suggests price guidance of $200 per tonne for polyethylene and $140 per tonne for polypropylene.)
From July through September, Borouge had $1.6 billion in revenues, a solid 7% year-on-year increase. A focus on 'high-value markets' helped with a 2% increase in sales volumes.
Update on Borouge 4 and China plan
On capacity expansion, the Borouge 4 project in Abu Dhabi is at 80% completion. "The project will significantly increase production and revenue, while the feasibility study for a planned new speciality polyolefins plant in China is progressing well," said Al Suwaidi.
The company’s net debt/EBITDA was at 1.3 times by end of September. (Borouge issued H1-24 dividends of $650 million, or 7.94 fils per share. This will be matched by a further $650 million payout for the second half of the year, to be paid in March next. This represents a current dividend yield of 6.3%.)