Borouge 4
ADNOC targets better economies of scale from the Borouge merger with Borealis, and consolidate its positioning in the global petrochemicals market. Image Credit: Supplied

Dubai: The ADNOC petrochemicals joint venture Borouge plans to reward shareholders with a Dh2.38 billion interim dividend payout related to its second-half 2023 performance. This works out to 7.9 fils a share.

For 2024, the Borouge management confirmed plans to maintain dividends at Dh4.77 billion ($1.3 billion), equivalent to 15.9 fils per share and a 6.6 per cent current dividend yield.

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This announcement should further sweeten up proceedings as ADNOC works on an ambitious merger of Borouge with Borealis (with its base in Austria), also an established presence in petrochemicals. Both entities have ADNOC and Vienna-headquartered OMV as major shareholders.

Borouge, listed on ADX, is 54 per cent owned by ADNOC, 36 per cent by Borealis, and 10 per cent held by retail and institutional investors. Borealis in turn has 75 per cent stake held by OMV and ADNOC with 25 per cent. (On ADX, the stock is down 9 per cent year-on-year.)

Over the past 12 months, we demonstrated the resilience of our business model and ability to leverage our strong brand positioning, technical capabilities, operational scale and excellence to outperform in challenging market conditions

- Hazeem Sultan Al Suwaidi of Borouge

Price volatility dents 2023 profit

As for the 2023 financials, Borouge saw its net profit at $1 billion, down from the $1.4 billion a year ago. The global petrochemicals marketplace is still seeing bouts of volatility, and which is reflected on the latest numbers.

Revenues for 2023 were $5.79 billion, a decline of 14 per cent, 'primarily due to a 16 per cent drop in average selling prices'. Even then, 'healthy' sales volumes of 5,116-kt 'partially offset the price decline from the high pricing levels achieved in 2022'.

Borouge has come up with a dividend yield of 6.6 per cent, among the higher ones from listed UAE companies. Image Credit: Supplied

Retain 'price premia'

"Looking ahead, Borouge will remain agile in adapting to market dynamics and our customers’ evolving needs," said  Hazeem Sultan Al Suwaidi, CEO of Borouge, in a statement.

"Our focus centres on differentiated product development, maintaining our price premia across our products, and continuing to drive further value creation as we solidify our market-leading positions.

"The strategic Borouge 4 project is progressing well and will be pivotal to delivering on our growth aspirations, particularly in high-growth segments and the development of sustainable solutions that cater to customers’ evolving needs in this space."

Borouge had achieved a price premium above benchmark $187 per tonne for Polyethylene (PE) and $111 per tonne for Polypropylene (PP) during the fourth quarter, which is 7- and 4 per cent up, respectively, from the third quarter. For the full year, premium for PE was $215 per tonne (above management’s guidance of $200 per tonne) while that for PP hit $125 per tonne (below the guidance of $140 per tonne).

"Operational efficiencies played a significant role in driving bottom line performance with our 'Value Enhancement Programme' delivering beyond its set targets," the CEO added. "We maintained a clear focus on cost discipline."