Borouge’s nine-month revenue rises 14% on higher sales volumes

The company has named a former Borealis executive as its chief financial officer

A Borouge production unit in Ruwais. The company said it is confident about reporting a profit this year. Photo: Adnoc
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Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, said revenue in the first nine months of 2022 rose by about 14 per cent from the same period a year earlier on higher sales volumes of a key petrochemical.

Revenue for the nine-month period to the end of September climbed to about $5 billion from the same period in 2021, the company said in an earnings filing on Friday.

Total sales volumes grew about 12 per cent as the company ramped up production from its fifth polypropylene unit (PP5).

Borouge’s polypropylene sales volumes rose about 15 per cent in the first nine months.

Polypropylene is a thermoplastic material used in everything from plastic packaging to car parts and textiles.

The global polypropylene market was valued at about $121bn in 2021 and is expected to hit $167bn by 2029, registering a compound annual growth rate of 4.2 per cent during the forecast period of 2022-2029, according to Data Bridge Market Research.

“Strong volume growth partially offset the decline in its average selling prices, which were impacted by global supply and pricing pressures,” the company said.

Global chemical makers have been struggling to control costs as prices of crude oil, a key raw material, hovers close to $95 a barrel after rising more than 15 per cent in the last 12 months.

“We have achieved this despite global supply and pricing pressures, and these results demonstrate our ability to continually innovate, providing a broader product mix to industries and customers around the world,” Borouge chief executive Hazeem Al Suwaidi said.

The company’s adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) for the nine-month period declined by about 4 per cent to $2.1bn from the same period a year earlier on higher logistics and raw material costs, while profit fell about 6 per cent to $1.2bn.

Borouge, which floated on the Abu Dhabi stock exchange in June after successfully closing its $2bn listing in the biggest sale of shares on the Abu Dhabi Securities Exchange, said it remained confident about reporting a profit for the 2022 financial year.

After its listing, Borouge was included in the FTSE Global Equity Index Series, which is used by investors globally to guide asset-allocation decisions and support portfolio construction.

“We see continued strong demand in our core markets, compared to other global markets, and remain optimistic on our leadership position, our ability to drive value and quality for customers, and to deliver attractive returns to our shareholders,” Mr Al Suwaidi said.

In a separate statement on Friday, the company said it had appointed former Borealis executive Jan-Martin Nufer as chief financial officer.

Mr Martin, who will step into the role on November 1, most recently served as vice president of treasury and funding at Borealis.

Borouge’s former chief financial officer Saeed Al Dhaheri will assist with the transition until the end of the year.

Updated: October 28, 2022, 7:43 AM