Borouge Achieves 16% Year-on-Year Net Profit Growth To $328 Million In Q3 2024

Borouge Plc has reported a 16% increase in net profit for the third quarter of 2024, reaching $328 million. This exceeded market expectations due to record sales and strong pricing for premium products. The company responded to high demand from fast-growing economies by boosting production. Adjusted EBITDA rose by 9% to $646 million, driven by a 7% revenue increase, maintaining an EBITDA margin of 40%.

In the UAE, Borouge's strategic expansion project, Borouge 4, is progressing rapidly with 80% completion. This expansion will increase production capacity by 28%, making Al Ruwais Industrial City the largest integrated polyolefin complex globally. The project is on schedule and fully energised through a national grid connection. Once operational, it is expected to generate an additional $1.5 to $1.9 billion annually.

Borouge's focus on high-value segments like infrastructure accounted for 38% of Q3 sales volumes. Using proprietary technology, the company offers solutions addressing climate change, food waste, water access, energy transition, healthcare, and waste management. The Asia Pacific region remains key, with sales volumes up 5% year-on-year, making up 65% of total Q3 sales.

Internationally, Borouge is advancing its feasibility study for a new specialty polyolefins plant in China with Wanrong New Material (Fujian). This venture aims to produce 1.6 million tonnes annually in Fuzhou. Additionally, Borouge is enhancing its second ethylene unit to boost olefins and polyolefins production by 230,000 tonnes by 2028, contributing $220-$250 million annually.

From July to September, Borouge achieved $1.6 billion in revenue, marking a 7% year-on-year increase. A strategic focus on high-value markets led to a 2% rise in sales volumes. The company's YTD adjusted operating free cash flow reached $1.74 billion, a 20% increase supported by a high cash conversion rate of 95%. Net debt/EBITDA stood at 1.3 times as of September 30th.

In September, Borouge distributed its half-year interim cash dividend of $650 million following shareholder approval in August. Management reaffirms commitment to pay the final dividend of $650 million in March 2025, totalling $1.3 billion for the year with a yield of 6.3%. "Borouge continues to deliver an outstanding financial and operating performance," said CEO Hazeem Sultan Al Suwaidi.

Operational Excellence and Technological Advancements

Borouge achieved record quarterly production levels in Q3 with capacity utilisation rates at 106% for polyethylene and 109% for polypropylene. Asset reliability was at an impressive 98%. The company is investing in digitalisation and AI programmes aiming for $550 million value generation by end-2024 through initiatives spanning health and safety, sales optimisation, sustainability efforts, and product development.

A significant achievement has been deploying a real-time optimisation system across three large-scale ethane crackers and twenty furnaces processing over 150,000 parameters hourly. This boosts productivity while optimising energy use and reducing emissions—highlighting Borouge's commitment to operational excellence.

Outlook and Future Plans

The company's management anticipates stable macroeconomic conditions across key markets in Q4 of 2024 with signs of improved operations driven by moderate GDP growth. Strong production and sales volumes are expected to continue positively influenced by operational efficiencies and focus on high-value segments. Polyolefin prices are projected to remain stable within a narrow range.

With inputs from WAM