ABU DHABI,
Borouge Plc has reported a 37% year-on-year (YOY) increase in first-quarter net profit to $273 million on stronger pricing premia driven by a focus on high-value product segments and cost efficiencies.
The company continues to demonstrate a significant competitive advantage in key growth markets in Asia Pacific, the Middle East, and Africa thanks to its premium solutions suited to sectors such as infrastructure, energy, agriculture, speciality packaging, and healthcare.
As a result, the price premium for Borouge’s polyethylene widened to $222 per tonne, up 19% from the previous quarter, and the premium for polypropylene increased 46% on a quarterly basis to $162 per tonne.
In the first quarter, the overall cost base decreased 20% from a year earlier and 18% in the previous quarter to $739 million, supporting an improvement in Borouge’s industry-leading EBITDA margin to 44%, up from 40% in the fourth quarter. The company continues to take a highly disciplined approach to managing the cost base following the success of its Value Enhancement Programme in 2023, which exceeded targets and resulted in a positive impact of $607 million in 2023.
At the company’s Annual General Meeting on 28th March, Borouge reiterated its intention to maintain a $1.3 billion dividend in 2024. Equivalent to 15.88 fils per share, the dividend represents a current yield of 6.5%.
Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, commented, “Borouge continues to demonstrate industry leadership on a broad range of metrics, from profitability and price premia to operational excellence and efficiency. By achieving robust earnings in the face of difficult global market conditions, the company has proved remarkable resilience and agility. This provides us with confidence that Borouge will achieve continued success in the coming period.
“Our strategy remains focused on high value-add segments, maintaining strong customer relationships in the world’s fastest growing economies, and maximising geographic reach. This is backed by continuous product innovation and an unwavering commitment to excellence in all aspects of the business, from safety and optimal utilisation at our production facilities in Al Ruwais to the expansion of our international commercial network.”
He added that the Borouge 4 production facility is over 60% completed. The plant will raise annual capacity by 28% to 6.4 million tonnes and leverage a new generation of technology to elevate the company’s product profile. The company is also pursuing accelerated global growth prospects, including a significant opportunity in the Asia Pacific region that has reached the feasibility stage.
