Home Business Borouge shareholders approve final 2022 dividend of $650 million

Borouge shareholders approve final 2022 dividend of $650 million

by Dubai Forum
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ABU DHABI, 13th March, 2023 (WAM) – Borouge, a leading petrochemical company that specialises in innovative and distinctive polyolefin solutions, held its inaugural Annual General Meeting (AGM) on 13th March 2023.

Shareholders voted to approve a final dividend of US$650 million for the fiscal year 2022, approximately 7.9 fils per share, which brings the total post-IPO dividend paid (June-December 2022) for the year to US$975 million.

The final dividend will be distributed to shareholders in April 2023, and the company has committed to paying US$1.3 billion in dividends for 2023. Since its successful listing, Borouge has demonstrated excellent performance, navigating market challenges and positioning itself for future growth to deliver competitive through-the-cycle shareholder returns.

Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology, Chairman of Borouge, said, “Our performance in 2022 clearly reaffirms our core value proposition as a highly profitable business that is focused on high-growth markets with strong, long-term fundamentals, and industry-leading efficiency derived from a clear first-quartile cost position. Borouge’s highly differentiated and innovative products yield strong premia, enabling reliable margins and through-the-cycle dividend capacity. The Company is well positioned for organic growth and the Board has mandated Borouge to explore international expansion opportunities. Further, our sustainability agenda underpins our commitment to decarbonisation and the circular economy.”

Borouge 4, a new polyolefins complex being built by major shareholders ADNOC and Borealis, is progressing as planned and is set to begin operations in 2025. The new complex is expected to add 1.4 million tonnes of polyethylene capacity, increasing Borouge’s total annual polyolefins production capacity to 6.4 million tonnes. Borouge’s Board of Directors has also authorized the company’s executive management to explore growth opportunities through international expansion.

In February 2023, Borouge announced its financial results for the full year, reporting strong year-on-year growth in sales volumes, which drove revenue up 8.2 percent to US$6.7 billion. Despite a challenging operating environment, the company’s net profit for the year was US$1.4 billion, in line with market expectations. Borouge has a strong balance sheet with a cash balance of over US$1 billion at year-end, providing ample headroom for growth.

Borouge also reported a 10 percent year-on-year increase in overall production capacity in 2022, with the successful ramp-up of its PP5 unit adding significant production capacity of 500 kilo tonnes per annum, bringing more differentiated grades into the production mix and supporting premium production. The company continues to operate comfortably within the top quartile of the global cost curve.

Borouge’s high impact value enhancement programme, focused on driving efficiencies within variable costs, fixed costs, and revenue enhancement, is expected to deliver a positive EBITDA impact of US$400 million in 2023. Management expects to sustain a 15 percent positive EBITDA impact from 2024 onwards, versus the 2022 baseline.

Borouge expects stable demand growth in its core Asia Pacific and Middle East markets, where economic growth rates are ahead of developed economies. The company’s differentiated product portfolio, enabled by Borstar technology, its innovation capabilities, and integrated go-to-market approach, result in a sustained and strong market position. With a wide market footprint covering 49 countries, Borouge can take advantage of opportunities in a dynamic market environment. The company expects to continue to realize healthy premia and has reiterated its over-the-cycle guidance of US$200 per tonne for polyethylene and US$140 per tonne for polypropylene.

Borouge’s sustainability ambitions are focused on achieving a zero-waste circular economy, in alignment with the strong and concerted actions of governments, businesses, consumers, and society. In support of ADNOC and the UAE’s net-zero by 2050 ambition, Borouge has set decarbonisation targets for 2030, which include the 100 percent reduction of continuous flaring, the reduction of GHG emissions intensity by 25 percent, and the reduction of energy intensity by 30 percent, all against the 2018 baseline.

In addition to decarbonisation, Borouge is building an industry leadership position in the circular economy. The company’s approach to circularity focuses on four key areas: increasing the durable products portfolio, expanding the recyclates portfolio, developing fully recyclable packaging solutions, and increasing consumer solutions sales that support the circular economy. Borouge has established a Packaging Centre of Excellence and Circular Economy Team focused on promoting a zero waste plastics circular economy, which is developing partnership opportunities with recycling companies throughout Asia and the Middle East.

Borouge has 12 partnerships with leading recycling companies in 7 countries, serving customers across its key markets. These partnerships allow Borouge to expand its offering of recycled products to meet increasing demand for sustainable polyolefin solutions and drive circularity through the value chain. The company has significantly ramped up its recycled polyolefin product offering, with over 50 grades across 14 product families.

As part of its commitment to invest in a green future and a more sustainable planet, Borouge has invested more than US$20 million in Anteo, a line of linear low-density polyethylene grades for the global packaging market, which enable fully recyclable monomaterial packaging. It has also invested US$5 million to increase infrastructure solutions capacity for further sustainable applications.

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