Dubai: The ADNOC joint venture Borouge has clocked revenues of $1.38 billion for the first quarter of 2023, gaining much from its ‘value enhancement program’ that created over $100 million in ‘revenue optimisation’. This focus on value gains should yield another $300 million this year.
The petrochemicals company, listed on ADX, confirmed it is well on track to meet its dividend commitment of $1.3 billion for 2023 as against $975 million for last year. Net profit was $199 million, with lower sales volumes being 'partially offset by strengthening prices'.
The Q1-23 revenues are higher from a year-on-year pespective, but from the fourth quarter 2022, it shows a decline. This, the company says, is principally due to the volume impact from the planned Borouge 2 'turnaround'. "The turnaround is part of Borouge’s regular plant maintenance schedule, which keeps the company’s asset base well-maintained and supports industry-leading asset reliability, and efficient and safe operations," said a statement.
The capex increasing 8 per cent quarter-on-quarter, much of which wasin support of the Borouge 2 turnaround. "The turnaround of our Borouge 2 facility was successfully completed on time and on budget, returning our asset base to full production capacity from the second quarter onwards," said Hazeem Sultan Al Suwaidi, CEO.
With the value enhancement programme, the company - where Borealis is the other shareholder - helped with hitting significant efficiencies on both fixed and variable costs. "We will be looking to build on this strong progress throughout the year,” said Al Suwaidi.
As said before, the pricing on its key products helped Borouge immensely to offset lower sales volumes. The pricing premium for polyethylene (PE) and polypropylene (PP) improved compared to Q4-22, by a heavy 22 per cent for PE and 17 per cent for PP, to reach $264 and $137 a tonne.
"Management expects to continue to achieve product pricing premia in line with its over-the-cycle midterm guidance of $200/tonne for PE and $140/tonne for PP," the company said.
Higher offtake was there from clients in Asia-Pacific and Middle East markets, and which 'remains stronger than in developed markets', in line with economic growth patterns for these economies. Borouge expects 'stable' polyolefin demand in its core territories and for sales volumes to return to levels 'equivalent to production volumes'.