In its first report on its financial earnings as a listed company, Borouge’s revenues increased by 16.4 percent, to reach $3.46 billion for the first half of 2022, compared to the same period in the previous year.
Borouge, one of the leading petrochemical companies in providing innovative and diversified polyolefin solutions, attributed the increase in revenue to an 8.6 percent increase in sales volume, and an increase in average price per ton by 4.1% at the level of Borouge products.
Adjusted earnings before interest, taxes, depreciation and amortization increased 1.7 percent to $1.512 billion.
While net income increased by 2.5% to reach $853 million.
Second-quarter revenue increased by 17.6%, while adjusted EBITDA increased by 35.5%.
This was achieved despite the increase in the prices of basic raw materials, as Borouge was able to improve its raw material sourcing processes, achieving a decrease in total production costs per ton compared to the previous quarter.
During the first half of 2022, Borouge witnessed a growth in its total production capacity of the company by 6.9% on an annual basis after the completion of the operation of the new fifth unit for the production of polypropylene at full capacity, and the completion of the comprehensive periodic maintenance of the Borouge 1 (“B1”) plant in the first quarter. This contributed to an 8.6% year-on-year growth in total sales volumes.
On this occasion, Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, Managing Director and CEO of ADNOC and its group of companies, and Chairman of the Board of Directors of Borouge, said: “Borouge’s revenues achieved significant growth in its first semi-annual financial results as a listed company, which confirms the efficiency of performance. The company’s financial and commercial flexibility.
He pointed out that these outstanding results come after the unprecedented success of offering a minority stake in “Borouge” shares on the Abu Dhabi Securities Exchange last June.
Dr. Sultan Al Jaber added: “In line with the leadership’s vision of doubling the work to achieve additional value from all of ADNOC’s business and enhance its role in supporting the UAE economy and attracting investments, Borouge plays a key role within ADNOC’s ambitious strategy for growth and expansion in the fields of refining, marketing and manufacturing. It has great potential to help it achieve more progress in the future, especially in light of the significant growth witnessed by the petrochemical sector globally.ADNOC and its strategic partner, Borealis, will continue to enhance their role as shareholders of the majority stake in Borouge to support its growth process and its continuous quest to create value quality and achieving significant and distinct returns for shareholders.
Borouge also continued to achieve price premiums above record prices during the first half of 2022, especially in June, which indicates the company’s success in providing a distinct mix of diversified products, as well as its ability to seize regional price opportunities.
The polypropylene premium during the first half of 2022 amounted to about $283 per ton, compared to $262 per ton during the same period last year.
The polyethylene premium amounted to $368 per ton, compared to $264 per ton during the first half of 2021.
For his part, Borealis CEO Thomas Gangl said, “This strong performance of Borouge enables continued growth, in light of the long-term partnership between Borealis and ADNOC. It also supports Borealis’ strategy of geographical expansion in the Middle East and Asia region.”
Borouge generated strong cash flow in the first half of 2022 at 94%, which reflects higher core profitability and lower capital expenditures after the completion of construction and operation of the new fifth polypropylene production unit.
Based on the strong performance of its operations and current market conditions, Borouge reiterates its intention to pay $975 million in dividends to shareholders for FY 2022, and pay at least $1.3 billion for FY 2023.
Borouge CEO Hazeem Sultan Al Suwaidi said, “We recorded a significant growth in sales volumes during the first half of 2022, and we continue to achieve price premiums that exceed record prices, which reflects the added value of our innovative products and solutions, and confirms their excellence and positive impact on society. We are optimistic about the future growth of the company, and we remain committed to providing exceptional value and attractive dividends to our shareholders.”
The listing of Borouge on the Abu Dhabi Stock Exchange in June 2022 was the largest ever in Abu Dhabi, and the largest for a petrochemical company in the Middle East.
The level of turnout for the initial public offering was about 42 times the target value among the categories of individual investors and institutional investors, with an increase in demand from individual investors more than any initial public offering that took place in the UAE over a period of nearly 20 years.
Following the completion of the company’s listing, Borouge joined the FTSE Russell series of global equity indexes that guide investors around the world in asset allocation and portfolio building decisions.
Borouge’s inclusion in these key indices reflects the company’s diversified global presence and underscores its importance to the base of global institutional investors that participated in the Borouge IPO.
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