Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, reported nearly 17 per cent annual jump in its fourth-quarter net profit, driven by lower costs and expenses.
Net profit attributable to owners of the company for the three months to the end of December climbed to $285 million, the company said in a statement on Thursday to the Abu Dhabi Securities Exchange, where its shares are traded.
Cost of sales for the period slid 11 per cent year-on-year to $896 million, while general and administrative expenses and selling and distribution expenses also fell 15 per cent and 33 per cent respectively to $50 million and $100 million.
The company’s revenue for the quarter also declined 6 per cent annually to $1.5 billion on “weaker global demand” for its products, according to the company.
“Operational efficiencies played a significant role in driving bottom line performance with our value enhancement programme delivering beyond its set targets,” said chief executive Hazeem Al Suwaidi.
“We maintained a clear focus on cost discipline with zero compromise on safety … and our commitment to the value we provide to our stakeholders.”
Established in 1998, Borouge is a petrochemical company with a workforce of more than 3,100 and customers in more than 86 countries across Asia, the Middle East and Africa.
It provides polyolefin solutions for the agricultural, infrastructure, energy, advanced packaging, mobility and healthcare industries.
In 2022, Borouge raised $2 billion through an initial public offering and was listed on the Abu Dhabi Securities Exchange.
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.
The company’s value enhancement programme, which is centred on revenue optimisation and cost efficiencies, “has achieved a positive impact of $607 million, surpassing both its initial 2023 target of $400 million and the later revised target of $500 million”, it said.
Borouge's full-year profit attributable to owners of the company fell 29 per cent annually to $991 million as revenue declined 14 per cent to $5.7 billion.
The company plans to distribute a dividend of $1.3 billion for 2024, equivalent to 4 cents per share.
It also said its Borouge 4 project is “progressing well” and is expected to be completed in 2025.
The project is set to expand Borouge’s capacity by 1.4 million tonnes annually to a full production capacity of 6.4 million tonnes.
Borouge will also “continue to focus its sales on high-growth geographies and high-value segments including infrastructure and adjacent industries”, it said.
Last year, the company signed a distribution agreement with Somochem, one of the biggest polyolefin distributors in East Africa, to expand its footprint there, and boost sales of its products amid a rise in market share in the region.
UK's plans to cut net migration
Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.
Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.
But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.
Language requirements will be increased for all immigration routes to ensure a higher level of English.
Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.
The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Race 3
Produced: Salman Khan Films and Tips Films
Director: Remo D’Souza
Cast: Salman Khan, Anil Kapoor, Jacqueline Fernandez, Bobby Deol, Daisy Shah, Saqib Salem
Rating: 2.5 stars
