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Borouge, a leading petrochemical company based in the UAE, today reported a net profit of US$1.4 billion for the 12 months ended 31 December 2022, in line with market expectations despite a challenging overall market environment.
Adjusted EBITDA for the full year was $2.6 billion.
Borouge reported revenue of $6.7 billion, an 8.2% increase over 2021. Revenue growth over the past 12 months was driven by a 14.9% increase in total polyolefin sales, the company said.
Total capacity increased by 10% year-on-year to support the increase in production, Borouge’s PP5 unit successfully ramped up, adding a significant capacity increase of 500 kg per annum, bringing more differentiated grades to the production mix to support quality production.
Based on cost optimization activities in 2022, Borouge announced its high-impact value enhancement plan, which builds on the cost efficiency and revenue optimization plan. Focused on improving efficiencies within variable costs, fixed costs and revenue enhancement opportunities, the plan is expected to have an EBITDA impact of $400 million in 2023.
Thereafter, Borouge management expects a positive EBITDA growth of 15% from 2024 onwards compared to the full-year 2022 baseline. This is to offset market pressures and position the company for future growth.
Global Expansion Plan
Given its highly competitive position, solid financial position and long-term approach to sustainable growth, Borouge’s Board of Directors has also empowered executive management to actively explore growth opportunities through international expansion.
These will focus on regions and markets that support the company’s existing strategic focus and will be considered within the framework of Borouge’s rigorous capital allocation policy.
Hazeem Sultan Al Suwaidi, CEO of Borouge, commented: “We are pleased to report our strong 12-month financial results, which demonstrate the resilience and efficiency of our business and our ability to deliver significant volume and revenue growth. With Challenging market conditions. Looking to 2023 and beyond, we will continue to deliver on our commitment to organic growth and explore new opportunities to expand in the UAE and internationally, which will complement our long-term growth strategy and strengthen our position as a world-leading Polyolefin producer.
product mix
“Our business is of world-class quality and scale and as evidenced by very strong volumes, we are bringing greater differentiation to our production mix, supporting premiums and strengthening our competitive positioning. We expect Demand will continue to outperform the global market, and we will continue to advance our innovation strategy to bring new products to our customers while strategically launching to meet changing needs.”
Highlights for the three months to 31 December 2022
*Revenue was $1.6 billion, with pricing pressure partially offset by very strong volumes.
* Total sales for the period rose 23.8% YoY to 1,415kt, up 5.5% MoM.
* Borouge’s adjusted EBITDA was $541 million in the fourth quarter, flat year-over-year.
* Net profit for the period was US$247 million, in line with market expectations.
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