Borouge Powers Forward with Robust Third Quarter Recovery

The Abu Dhabi polyolefins manufacturer has restored production momentum despite regional disruptions, increasing sales volumes by 22 per cent and positioning itself for its strongest quarter of the year ahead.

The resilience of Abu Dhabi’s industrial sector continues to manifest in unexpected ways. Even as external pressures constrain global supply chains, Borouge Plc has emerged from the third quarter with strengthened operational performance, demonstrating the adaptive capacity that characterises the emirate’s manufacturing landscape.

Production has resurged through the quarter, with average utilisation climbing from 60 per cent in the previous period to 76 per cent by the end of September. This recovery reflects improved feedstock availability, particularly ethane supply, which enabled the company to bring additional production capacity back into operation. Output reached 0.95 million tonnes in Q3, a marked increase from 0.72 million tonnes in Q2.

Sales volumes climbed 22 per cent quarter-on-quarter to 1.07 million tonnes, underpinned by strengthened demand across Asia and the company’s commitment to serving customers through alternative logistics routes. The polyolefins manufacturer maintained robust product premia throughout the quarter, with polyethylene commanding AED1,105 per tonne and polypropylene at AED573 per tonne, reflecting enduring customer confidence in its differentiated portfolio. Infrastructure and energy solutions accounted for 39 per cent of sales, underscoring the strategic importance of Borouge’s offerings to critical sectors.

Revenue expanded 3 per cent quarter-on-quarter to AED5.3 billion, whilst adjusted EBITDA reached AED1.02 billion and net profit AED399 million. Though global polyolefin benchmark prices softened during the quarter, average realised selling prices remained elevated compared with the prior year, increasing 22 per cent year-on-year. Freight and logistics costs persisted as headwinds, alongside elevated propylene feedstock expenses, yet the company’s technical asset availability remained consistently strong.

Momentum has accelerated markedly as the quarter drew to a close. By October, facility utilisation had reached 90 per cent, supported by continuing improvements in feedstock supply, whilst global polyolefin benchmark prices strengthened compared with third quarter levels. The company’s outlook for the fourth quarter reflects this trajectory, with expectations of substantial EBITDA improvement driven by higher production volumes and favourable pricing dynamics.

Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge Plc, characterised the period as exceptional despite external headwinds, emphasising the company’s ability to maintain customer relationships and asset integrity. The company continued its shareholder return programme, paying an interim dividend of 8.1 fils per share in September, with annual dividend guidance of 16.2 fils per share maintained.

Borouge International, the company’s downstream operations, contributed meaningfully to performance, recording sales growth of 11 per cent with an EBITDA margin of 18.4 per cent as prices normalised from Q2 peaks. Integration synergies have already attained a yearly run-rate of AED735 million, with the full benefits of combination continuing to emerge.

The company is progressing toward a proposed tender offer to exchange Borouge Plc shares for Borouge Group International AG shares, targeting a subsequent listing on the Abu Dhabi Securities Exchange and capital raise in 2027, subject to market conditions and regulatory approval. The transaction would provide shareholders with exposure to a geographically diversified global polyolefins enterprise with enhanced operational resilience and scale.

What it means for Abu Dhabi

Borouge’s operational recovery underscores Abu Dhabi’s capacity to navigate complex global disruptions without compromising productive output. The company’s ability to maintain customer relationships through alternative logistics whilst expanding production volumes demonstrates the pragmatism and strategic thinking embedded in the emirate’s industrial ecosystem. As one of Abu Dhabi’s flagship manufacturing enterprises, Borouge’s strengthened performance reflects positively on the broader economic environment and investor confidence in local industrial capabilities.

The anticipated listing on the Abu Dhabi Securities Exchange represents a significant milestone for the emirate’s capital markets, as we have reported in ADX’s broader efforts to showcase Abu Dhabi’s investment prowess globally. Borouge’s evolution into a more globally diversified polyolefins leader will enhance both the depth and resilience of Abu Dhabi’s listed companies, reinforcing the emirate’s position as a hub for substantial industrial and financial activity in the region.

Source: WAM

On Simply Luxury: Abu Dhabi Securities Exchange