Borouge's fourth-quarter profit jumps 17% on lower costs and expenses

Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, reported nearly 17 per cent annual jump in its fourth-quarter net profit, driven by lower costs and expenses.

Net profit attributable to owners of the company for the three months to the end of December climbed to $285 million, the company said in a statement on Thursday to the Abu Dhabi Securities Exchange, where its shares are traded.

Cost of sales for the period slid 11 per cent year-on-year to $896 million, while general and administrative expenses and selling and distribution expenses also fell 15 per cent and 33 per cent respectively to $50 million and $100 million.

The company’s revenue for the quarter also declined 6 per cent annually to $1.5 billion on “weaker global demand” for its products, according to the company.

“Operational efficiencies played a significant role in driving bottom line performance with our value enhancement programme delivering beyond its set targets,” said chief executive Hazeem Al Suwaidi.

“We maintained a clear focus on cost discipline with zero compromise on safety … and our commitment to the value we provide to our stakeholders.”

Established in 1998, Borouge is a petrochemical company with a workforce of more than 3,100 and customers in more than 86 countries across Asia, the Middle East and Africa.

It provides polyolefin solutions for the agricultural, infrastructure, energy, advanced packaging, mobility and healthcare industries.

In 2022, Borouge raised $2 billion through an initial public offering and was listed on the Abu Dhabi Securities Exchange.

After its listing, Borouge was included in the FTSE Global Equity Index Series, which is used by investors globally to guide asset-allocation decisions and support portfolio construction.

The company’s value enhancement programme, which is centred on revenue optimisation and cost efficiencies, “has achieved a positive impact of $607 million, surpassing both its initial 2023 target of $400 million and the later revised target of $500 million”, it said.

Borouge's full-year profit attributable to owners of the company fell 29 per cent annually to $991 million as revenue declined 14 per cent to $5.7 billion.

The company plans to distribute a dividend of $1.3 billion for 2024, equivalent to 4 cents per share.

It also said its Borouge 4 project is “progressing well” and is expected to be completed in 2025.

The project is set to expand Borouge’s capacity by 1.4 million tonnes annually to a full production capacity of 6.4 million tonnes.

Borouge will also “continue to focus its sales on high-growth geographies and high-value segments including infrastructure and adjacent industries”, it said.

Last year, the company signed a distribution agreement with Somochem, one of the biggest polyolefin distributors in East Africa, to expand its footprint there, and boost sales of its products amid a rise in market share in the region.