Borouge, a UAE based leading petrochemical company, today reported a net profit of $1.4 billion for the 12 months ended December 31, 2022, in line with market expectations despite an overall challenging market environment.
Adjusted EBITDA for the full-year period stood at $2.6 billion.
Borouge reported a revenue of $6.7 billion, a growth of by 8.2% versus 2021. The increase in revenue over the 12-month period was driven by a 14.9% increase in total polyolefin sales volumes, the company said.
Overall production capacity grew by 10% year-on-year, in support of increasing volumes, with the successfully completed ramp-up of Borouge’s PP5 unit adding significant production capacity of 500 kilo tonnes 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.
Thereafter, 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.
Global expansion plans
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 strong twelve-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. 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 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, and 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, and we will press ahead with our strategy of innovation, bringing new products to customers while tactically placing volumes to meet shifting demand.”
Highlights for the three months to 31 December 2022 results
* Revenue was $1.6 billion with pricing pressures partially offset by very strong sales volumes.
* Total sales volume for the period increased by 23.8% year-on-year to 1,415kt and increased by 5.5% against the previous quarter.
* Borouge delivered adjusted EBITDA of $541 million in the fourth quarter, flat on a year-on-year basis.
* Net profit for the period was $247 million, in line with market expectations.