ADNOC joint venture Borouge hits $3.46b in H1-22 revenues – and shareholders eye $975m in dividends

Borouge was one of the most successful IPOs on ADX. Its latest financials should see investors wanting more.
Image Credit: Supplied

Dubai: Abu Dhabi’s ADNOC JV Borouge has seen first-half 2022 revenues hit $3.46 billion from a 16.4 per cent increase, helped by steadily improving prices for petrochemical products. In fact, Borouge recorded a 4.1 per cent gain in average price on a per tonne basis, all of which helped net income touch $853 million.

The company, where Borealis is the other partner, says the financials ‘support’ its commitment to pay a staggering $975 million in dividends for 2022. “Coming shortly after our landmark IPO, these robust financial and operational results underpin our unique product offering and specialty solutions,” said Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge. “We delivered significant sales volumes growth during the first-half and continue to achieve strong premia above benchmark pricing. We are very optimistic regarding the future growth…”

Higher than benchmark prices

Through the first six months, Borouge ‘continued to achieve’ premia above benchmark prices, with June proving a particularly strong month, reflecting an ‘ability to capture regional price opportunities’. Premia for polypropylene was $283/tonne against $262/tonne in the same period last year, and for polyethylene, it was $368/tonne from $264/tonne.

Thomas Gangl, CEO of Borealis, said: The strong performance of the company, combined with the long-term partnership of Borealis and ADNOC, provides the platform for further growth, which Borouge has already successfully embarked on, and clearly underpins Borealis’ Strategy 2030 for geographical expansion in the Middle East and Asia.”

Borouge generated significant cashflow, helped by lower capital expenditure as the new PP5 plant ramps up. Cashflow conversion was strong at 94 per cent.

An ADX heavyweight

In June, Borouge listed on the Abu Dhabi Securities Exchange in Abu Dhabi’s largest-ever IPO and the Middle East’s largest-ever petrochemicals listing. The IPO was oversubscribed nearly 42 times across institutional and retail tranches, with ‘more retail demand than any UAE IPO in almost 20 years’.

Borouge was included in FTSE Russell’s FTSE Global Equity Index Series, which is used by investors globally to inform asset allocation decisions and support portfolio construction. “Joining these key Indices marks a major recognition of Borouge and underlines the Company’s relevance to the global institutional investor base that participated in its IPO,” it said in a statement.

Borouge is central to the delivery of ADNOC’s ambitious downstream and industrial growth strategy, benefitting from the global boom in the petrochemicals sector. ADNOC, alongside its long-standing partner Borealis, will remain a committed, long-term majority shareholder in Borouge

– Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and Chairman of Borouge

Leave a Reply

Your email address will not be published. Required fields are marked *