Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, has reported a profit in the second-quarter.
Net profit attributable to shareholders of the company for the three-month period to the end of June stood at $229 million, the company said in a filing on Friday to the Abu Dhabi Securities Exchange, where its shares are traded.
The company reported a second quarter revenue of $1.4 billion.
“In a challenging market environment, our results for the second quarter and first half of 2023 are a demonstration of our resilience,” said chief executive Hazeem Al Suwaidi.
“Following the successful completion of the planned turnaround of our Borouge 2 facility, our production is at a very high utilisation rate.
“In addition, we continue to achieve significant efficiencies through our ambitious value-enhancement programme, which is assisting us in mitigating market pressures and positions us for further growth.”
Borouge's board has endorsed an interim dividend of $650 million to be approved by shareholders during the second half of the year.
The company also repeated its commitment pay $1.3 billion in dividends for 2023.
Pressure linked to market weakness was partially offset by the positive impact of the value enhancement programme, as well as by healthy sales volumes and the resilience of the company’s pricing premiums, compared to benchmarks.
While the polyolefin markets remain challenging, with pricing expected to operate within a narrow band of volatility in 2023, Borouge remains well positioned in its core territories to continue to deliver product premiums.
The company also expects to realise further material results from its value-enhancement programme during the coming quarters.
Borouge said it continues to explore international expansion opportunities, focusing on geographies and markets that are aligned with its strategic road map.
In May last year, Borouge raised $2 billion through an initial public offering and was listed on the ADX. The IPO, which was about 42 times oversubscribed, was the largest listing in Abu Dhabi at the time.
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.
This month, Adnoc entered into formal negotiations with Austrian energy company OMV on the creation of a new combined petrochemicals holding entity.
The companies are proposing to merge their respective shareholdings in Borouge and Borealis.
Adnoc acquired a 24.9 per cent stake in OMV from Abu Dhabi’s strategic investment arm Mubadala Investment Company in December.
Through the investment in OMV, which holds a 75 per cent stake in Austrian plastics maker Borealis, Adnoc increased its stakes in both Borealis and Borouge.
Vienna-listed OMV is among Europe’s largest energy companies. It produces and markets fuels as well as feedstock for the chemical industry, and operates three refineries in Europe. OMV operates around 1,800 filling stations in ten European countries.
Borealis, which is majority owned by OMV and based in Vienna, is the eighth-largest producer of compounds such as polythene and polypropylene used in packaging, plastics and acrylics industries.
Polypropylene, Borouge’s main product, is a thermoplastic material used in products including plastic packaging, car parts and textiles.
The global polypropylene market is projected to hit $167 billion by 2029, from about $121 billion in 2021, recording an annual growth rate of 4.2 per cent during the forecast period of 2022-2029, according to Data Bridge Market Research.
The UAE plans to triple its petrochemical production capacity from 4.5 million tonnes – currently produced entirely by Borouge – by 2025.