Borouge reports $1.4b net profit during 2022
ABU Dhabi:borouge announced its financial results for the twelve-month and three-month periods ended 31st December 2022, with strong year-on-year growth in sales volumes driving healthy revenue growth.
Borouge reported a net profit of $1.4 billion, in line with market expectations and holding up well, despite an overall challenging market environment. Adjusted EBITDA for the full-year period stood at $2.6 billion.
Borouge reported revenue of $6.7 billion, increasing by 8.2% versus 2021. The increase in revenue over the twelve-month period was driven by a 14.9% increase in total polyolefin sales volumes.
Overall production capacity grew by 10% year-on-year, in support of increasing volumes, with the completed ramp-up of Borouge’s PP5 unit adding a significant production capacity of 500 kilotonnes per annum, bringing more differentiated grades into the production mix and supporting premium production.
Building on cost optimisation activities in 2022, Borouge has announced its high-impact value enhancement programme, anchored in cost efficiency and revenue optimisation initiatives.
The programme focuses on driving efficiencies within variable costs, fixed costs, and revenue enhancement opportunities and is expected to deliver a $400 million EBITDA impact in 2023.
Thereater, Borouge management expects to sustain a 15% positive EBITDA impact from 2024 onwards versus the full-year 2022 baseline. This is intended to offset market pressures and position the Company for future growth.
In light of its highly competitive position, very robust financial profile and long-term approach to sustainable growth, Borouge’s Board of Directors has also mandated Executive Management to actively explore growth opportunities through international expansion.
These will be focused on geographies and markets that support the Company’s existing strategic priorities and will be considered within the framework of Borouge’s disciplined capital allocation policy.
Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, commented, “We are pleased to report our twelve-month solid 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. As we look ahead to 2023 and beyond, we will continue to execute our commitment to organic growth and explore new opportunities for expansion in the UAE and internationally, where they complement our long-term growth strategy and reinforce our position as a world-leading polyolefins producer.
“Our operations are of world-class quality and scale, as shown by very strong production volumes. We are bringing ever-greater differentiation to our production mix, supporting premia and bolstering our competitive positioning. We expect demand in our core territories to continue to outperform global markets. We will press ahead with our innovation strategy, bringing new products to customers while tactically placing volumes to meet shiting demand.” Highlights for the three months to 31st December 2022; Revenue was $1.6 billion, with pricing pressures partially offset by robust sales volumes.