Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, said its 2022 revenue rose by 8.2 per cent from a year earlier on higher sales volumes.
Revenue for the 12-month period ending in December climbed to $6.72 billion, from $6.22 billion in 2021, the company said on Thursday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.
Total sales volume grew by about 15 per cent as Borouge increased production from its fifth polypropylene unit (PP5), which raised the company’s production capacity by 500,000 tonnes a year.
“We are pleased to report our strong 12-month financial results, which demonstrate the resilience and efficiency of our business and our ability to achieve significant volume and revenue growth in the face of challenging market conditions,” said chief executive Hazeem Al Suwaidi.
A recovery in economic activity in China, the world's manufacturing hub, is expected to tighten the demand for plastics and petrochemicals this year.
"It is not a question about sales volumes, we always sell everything that we have been producing. If we don't sell it in China, we sell it elsewhere," Jan-Martin Nufer, company's chief financial officer, told The National in an interview on Thursday.
Borouge, which focuses on premium price end-markets, could benefit from a surge in commodity prices resulting from China's reopening, said Mr Nufer.
The company's long-term feedstock agreement with Adnoc has placed it in an "excellent" cost position amid volatile energy prices, he said.
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, registering a compound annual growth rate of 4.2 per cent during the forecast period of 2022-2029, according to Data Bridge Market Research.
Borouge's full-year net profit attributable to the owners of the company fell about 8 per cent to $1.4 billion in 2022 from $1.51 billion a year earlier.
The company’s adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) last year declined by about 3 per cent to $2.65 billion, from 2021, on higher costs.
In the fourth quarter, Borouge's net profit attributable to the owners of the company stood at $244 million on a revenue of $1.59 billion..
“As we look ahead to 2023 and beyond, we will continue to execute on our commitment to organic growth, as well as explore new opportunities for expansion in the UAE and internationally, where they complement our long-term growth strategy,” Mr Al Suwaidi said.
Borouge also announced a “value enhancement” programme aimed at cutting costs and boosting operational efficiency. It will add $400 million to the company’s Ebitda in 2023, it said.
A planned turnaround of the company's Borouge 2 plant — expected to run until March — will affect the company's production by 200,000 tonnes during the period, it said.
Last year, Borouge raised $2 billion through an initial public offering and was listed on the ADX.
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.
Borouge's quarterly report comes as the global economy is expected to head into a recession this year. For chemical companies, this will result in lower demand for their products as demand for new cars, homes and consumable goods falls.
"We're not seeing a doom and gloom scenario right now on the horizon ... I think we're in a very good position," said Mr Nufer.
There is a "lot of demand" for Borouge's products in the infrastructure sector, he said.
Last year, lockdowns in Chinese cities worsened supply chain disruptions in the global chemical industry.
"The logistics costs have been coming down, which is a good sign," said Mr Nufer.
Established in 1998, Borouge employs more than 3,000 people and serves customers in more than 50 countries across Asia, the Middle East and Africa.