Borouge Classification: Public
Q3 2023 Financial Results
Market Announcement
BOROUGE REPORTS 22% Q3 2023 NET PROFIT INCREASE
Strong production performance, high sales volumes, targeted cost
management and revenue optimisation from Value Enhancement
Programme help Borouge mitigate impact of challenging global market
conditions
Company reports Q3 2023 net profit of $282 million (AED1.04 billion)
and strong margins, demonstrating business resilience versus industry
peers
As the Value Enhancement Programme surpasses target and delivers
$420 million positive impact in first nine months of 2023, Borouge further
raises the programme’s target to $500 million
ABU DHABI, UAE – 30 October 2023: Borouge Plc, a leading petrochemicals company that
provides innovative and differentiated polyolefins solutions, has delivered robust third-quarter
performance, reporting a net profit of $282 million (AED1.04 billion) for the quarter ended
September 30, marking a 22% increase over the previous quarter.
Strong production performance, targeted cost management and revenue optimisation from its
ambitious Value Enhancement Programme helped Borouge display resilience in the face of a
subdued global environment and challenging polyolefins market. Borouge’s Value Enhancement
Programme delivered a $420 million positive impact in the first nine months of 2023, surpassing
its ambitious target of $400 million set for the 2023 financial year.
Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, commented: “Borouge has
delivered robust operating and financial performance this quarter, leveraging the company’s
competitive advantages and maintaining disciplined cost management. Consequently, sales
volumes have grown, and we remain committed to innovation to expand market share and
maintain strong pricing premia. We are pleased to announce that we have exceeded the target of
our ambitious Value Enhancement Programme and as a result, we have committed to pursuing a
higher target to further mitigate the current challenging market environment. The company is
proving its resilience amid tough global conditions and is well placed to deliver further growth as
the market cycle turns. Borouge has distributed an interim dividend of $650 million in the third
quarter.”
In line with previous market communication, the company has committed a dividend of $1.3 billion
(15.9 fils per share) for the 2023 financial year, which equates to 6.3% current dividend yield.Borouge Classification: Public
Q3 2023 Financial Results
Market Announcement
Highlights for the three months ended 30 September 2023: Third-quarter revenue increased
6% quarter-on-quarter, reaching $1.5 billion, and declined 11% on a year-on-year basis. Borouge
reported a net profit of $282 million in the third quarter of 2023, increasing by 22% quarter-on-
quarter, supported by a 16% increase in sales volumes. On a year-on-year basis, net profit
declined by 9%. While top- and bottom-line performance in the third quarter faced market related
pricing challenges, Borouge delivered a healthy adjusted EBITDA margin of 40%, up 3%
compared to the previous quarter, reflecting the company’s improved operational efficiencies.
Cash conversion was very strong at 97%, with a healthy adjusted operating free cash of $573
million, up 15% quarter-on-quarter. Pressures from the general market weakness were partially
offset by the positive impact of the Value Enhancement Programme, as well as by healthy sales
volumes on the back of strong operational performance. High production volumes of both
polyethylene (PE) and polypropylene (PP) included 38% of total sales in the value-added
infrastructure segment, representing the unique positioning of Borouge’s products.
Highlights for the nine months ended 30 September 2023: In the first nine months of 2023,
sales volume grew by more than 2% year-on-year to 3.8 million tonnes. Revenue for the period
reached $4.3 billion, with adjusted EBITDA reaching $1.6 billion. Net profit for the period was $713
million, impacted by a significant year-on-year decline in average selling prices compared to their
peak levels in 2022, and partially offset by healthy additional volume.
Strong operational performance and global sales & distribution network delivering high
sales volumes
Borouge achieved very high production utilisation rates with PE production at 104% and PP
production at 109% for during the quarter. Complemented by its state-of-the-art manufacturing
facilities in Ruwais, one of the world’s largest integrated polyolefin complexes, Borouge’s direct
customer coverage, strong brand name and strategically located market presence across its
target global sales markets enabled volume optimisation. This contributed to sales volumes of
1,395 kilo tonnes in the third quarter, representing a 16% quarter-on-quarter and 4% year-on-year
increase. These higher volumes partially mitigated the impact of a 14% decline in average
polyolefin selling prices during the period.
Value Enhancement Programme outperforms, achieving a material $420 million positive
impact
Borouge’s Value Enhancement Programme continues to successfully deliver cost efficiencies and
revenue optimisation. Already exceeding its target of $400 million, the programme has delivered
a $420 million positive impact year-to-date in 2023. The company is now pursuing a higher target
of $500 million for the Programme to mitigate the steep price decline in the current challenging
market environment. The programme is one of the industry’s most ambitious revenue
enhancement and cost saving programmes, delivering a considerable positive impact to the
bottom line in a challenging environment and positioning Borouge as a leader among its regional
and international peers.Borouge Classification: Public
Q3 2023 Financial Results
Market Announcement
Shareholder returns supported by planned capacity growth projects and ongoing
operational investments
The company continues to progress in expanding its polyethylene production capacity by 1.4
million tonnes per year with the Borouge 4 project, currently being built by Borouge’s major
shareholders, ADNOC and Borealis. The Borouge 3 plant and associated feedstock operations
will undergo a planned maintenance shutdown in 2024, resulting in an estimated total volume
impact of 500 kilo tonnes. This rigorous approach to maintenance ensures optimal reliability,
contributing to the quality and operational excellence that provides a key comparative advantage
for Borouge.
Focus on new product innovation supporting the sustainability agenda
The company continues to advance its sustainability agenda with a core focus on innovation and
partnerships aimed at promoting the circular economy. In the third quarter, at ADIPEC, Borouge
signed an agreement with Tadweer (Abu Dhabi Waste Management) to explore recycling
opportunities in Abu Dhabi, with a focus on implementing best practices in polymer sorting and
mechanical recycling. Borouge is also advancing its sustainability agenda and efforts to driving
decarbonisation by launching initiatives to leverage its innovation capabilities to empower
electrification through its solutions, including in the fast-growing sectors of wind and solar energy,
electric vehicles and energy storage.
Outlook
The overall polyolefins market remains challenging, with pricing expected to operate within a
narrow band of volatility throughout the fourth quarter of 2023. Borouge remains well-positioned
to deliver product premia versus benchmarks through-the-cycle given the company’s competitive
and cost-advantaged feedstock position, economies of scale through one of the world’s largest
integrated polyolefins complexes, superior Borealis Borstar® proprietary technology and the
company’s leading position in key growing and sustainable market segments.
Borouge’s management expects to deliver further gains from the Value Enhancement Programme
in the fourth quarter of 2023.
Financial highlights
YoY % QoQ % YoY %
USD millions Q3 2023 Q3 2022 Q2 2023 9M 2023 9M 2022
Change Change Change
Sales Volume (kt) (1) 1,395 1,341 4% 1,206 16% 3,758 3,669 2%
Revenue 1,496 1,674 (11)% 1,416 6% 4,294 5,134 (16)%
Adj. EBITDA (2) 592 593 - 518 14% 1,571 2,105 (25)%
Net Profit 282 308 (9)% 231 22% 713 1,161 (39)%
Adj. Operating FCF (3) 573 564 2% 496 15% 1,446 1,992 (27)%
(1) PE, PP and ethylene sales (including Borealis volumes).
(2) Adj. EBITDA defined as EBITDA plus adjustments on foreign exchange g ain or loss and impairment loss on Property, Plant and Equipment.
(3) Adj. Operating FCF defined as Adjusted EBITDA less capital expenditure.Borouge Classification: Public
Q3 2023 Financial Results
Market Announcement
--- ENDS ---
About Borouge Plc
Borouge Plc, listed on the Abu Dhabi Securities Exchange (ADX symbol: BOROUGE / ISIN
AEE01072B225), is a leading petrochemicals company that provides innovative and differentiated
polyolefin solutions for the infrastructure, energy, mobility, healthcare, agriculture and advanced packaging
industries. Borouge employs more than 3,100 people and serves customers in over 86 countries across
Asia, the Middle East and Africa.
Founded in 1998 through a strategic partnership between ADNOC and Borealis, Borouge was formed to
build and operate a polyolefins complex in Al Ruwais Industrial City, United Arab Emirates, which today is
one of the world’s largest integrated polyolefin complexes. ADNOC owns a majority 54% stake and Borealis
holds a 36% stake in Borouge.
To find out more, visit: borouge.com
For further information, please contact:
Rehab Ateeq
VP, Global Communications
Media@borouge.com
Samar Khan
VP, Investor Relations
IR@borouge.com

Sentiment: negative