Borouge announces $193 million Q2 2025 net profit

01/08/2025 06:29 AST

Borouge Plc, a leading petrochemicals company providing innovative and differentiated polyolefins solutions, on Thursday announced a net profit of $193 million for the second quarter of 2025, exceeding market expectations.

The results reflect execution of the planned Borouge 3 turnaround, with the company maintaining strong margins and healthy cash generation on the back of effective cost management and sustained premia across its high-value product mix.

The Borouge 3 turnaround was successfully executed during the quarter, within budget and delivered eight days ahead of schedule. As the largest and most complex turnaround to date, the company optimised downtime by 15 per cent, reflecting the efficiency of company's planning and execution teams. These planned, regular six-year maintenance turnarounds are essential to servicing Borouge's world-class assets and maintaining high utilisation rates and production volumes.

Adjusted Ebitda for the second quarter was $440 million, reflecting performance above expectations during the planned Borouge 3 turnaround. Borouge maintained a healthy Ebitda margin of 34 per cent, supported by product mix optimisation throughout a scheduled major maintenance event.

The company has proposed an increased minimum interim dividend of 8.1 fils per share for the first half of 2025, subject to shareholder approval at the upcoming General Assembly in August. This interim payout reflects the first instalment of the previously announced intention to increase the full-year 2025 dividend to 16.2 fils per share, marking an uplift from 15.88 fils in 2024, representing an estimated dividend yield of 6.1 per cent at the current share price, one of the highest on the Abu Dhabi Securities Exchange (ADX). This reinforces the company's increased dividend framework.

Since its listing in 2022, Borouge has paid a total of $3.58 billion in dividends to shareholders. Upon completion of the proposed Borouge Group International transaction, the newly formed entity intends to maintain an annual minimum dividend of 16.2 fils per share up to at least 2030. This represents a cumulative shareholder return of approximately 37 per cent1 with a strong upside potential and a 90 per cent dividend payout ratio of net profit.

Hazeem Sultan Al Suwaidi, chief executive officer of Borouge, commented: "Borouge's results are underpinned by healthy cash flows, disciplined execution and strong pricing premia, following the successful completion of the planned Borouge 3 turnaround, our largest to date. Reflecting our commitment to delivering shareholder value, we reaffirm our intention to increase Borouge's dividend to 16.2 fils per share for 2025 and our proposed H1 2025 dividend of 8.1 fils per share to be paid in September. The increased dividend is also expected to serve as the intended minimum share payout to at least 2030 under Borouge Group International."

Strong pricing premia above product benchmark prices for polyethylene (PE) and polypropylene (PP) remained a key highlight of the quarter, with $249 per tonne achieved for PE and $141 per tonne for PP, both exceeding management's through-the-cycle guidance.

Supported by Borouge's ability to reallocate volumes to maximise netbacks, its differentiated portfolio and disciplined execution, the company sustained premium positioning despite softer market conditions.

Resilient Q2 performance anchored by operational excellence
Borouge reported revenue of $1.31 billion in Q2 2025, compared to $1.5 billion in Q2 2024, taking into account the planned Borouge 3 maintenance, reflecting a quarter that balanced disciplined asset management with the company's ongoing commitment to delivering value for shareholders. Sales volumes totalled 1.1 million tonnes, broadly stable quarter-on-quarter, supported by approximately 140 kilotonnes of inventory sales. High-value products continued to account for 41 per cent of total volumes, with strong momentum in infrastructure and advanced packaging applications.

Average selling prices declined 1 per cent quarter-on-quarter and 3 per cent year-on-year, in line with broader market conditions. While PE prices held steady, PP saw a modest decline. Global benchmarks for PE and PP declined slightly over the same period. Despite this environment, Borouge sustained pricing discipline and continued to optimise its regional sales mix, with an increasing share allocated to Middle East and Borealis-linked markets offering higher netbacks.

Adjusted Ebitda for the quarter was $440 million, compared to $613 million in Q2 2024, with an Ebitda margin of 34 per cent. The lower margin reflects lower average selling prices, taking into account reduced production levels during the planned turnaround period. Borouge's ability to maintain a high margin despite lower production demonstrates its cost efficiency, operational control and commercial agility.

Capital expenditure in Q2 amounted to $130 million. Borouge closed the quarter with a net debt-to-Ebitda ratio of 1.0x, maintaining a strong balance sheet and significant financial flexibility.

For the first half of the year, revenue stood at $2.72 billion compared to $2.81 billion in H1 2024. Adjusted Ebitda reached $1.0 billion versus $1.18 billion in the prior-year period, with margins supported by strong pricing premia, cost discipline and inventory sales. Sales volumes totalled 2.39 million tonnes, down just 2 per cent year-on-year, reflecting Borouge's operational resilience and agility.

Borouge continues to execute a share buyback approved at its AGM in April, reflecting the company's strong confidence in its future prospects. It has purchased 125 million shares at the end of the second quarter with transactions reported as per ADX regulatory requirements.

Outlook
Borouge continues to focus on differentiated products in its core regions, supporting strong price premia and strong performance expected through the second half of the year. The company remains agile in allocating volumes to the best netback markets within its core regions.

With the planned turnaround now successfully concluded, it is well positioned to optimise production capacity and to take advantage of improved market dynamics as they emerge.

Khaleej Times