Strong market drives Borealis Q1 profit to €127m

22 May 2007 11:38  [Source: ICIS news]

LONDON (ICIS news)--Borealis has increased first-quarter operating profit to €127m ($172m), sharply higher than the €36m recorded in the corresponding period of 2006, the company said on Tuesday.

The plastics maker said the performance was driven by strong market conditions, especially in the infrastructure sector, adding that sales had grown in key markets and that operational excellence had helped lift the numbers.

Sales were up 11% at €1.48bn, while net profit for the quarter was €113m against €31m in the first quarter last year.

The first quarter last year was hit by high feedstock and energy costs and patchy demand. Borealis also took charges in the quarter to cover a plant closure.

Group results in the most recent quarter were also up compared with the fourth quarter of 2006: operating profit by 18% and net results by 13% on an increase in sales of 4%.

“Our value creation through innovation and focus on specific market sectors continue to drive sales growth and deliver results to the bottom line,” said CEO John Taylor said.

Borealis said net interest bearing debt in the quarter was cut by €61m and the gearing ratio was lowered to 30% from the fourth quarter of 2006.

“We will continue to strengthen our European asset base by driving cost competitiveness throughout the value chain,” Taylor said. “In addition, the expansion of Borouge will substantially develop our position in the high growth markets of the Middle East and Asia Pacific.”

Borealis said that it would invest €370m in Stenungsund, Sweden, in the first quarter to grow its wire and cable manufacturing capacity and was on track to compete a 330,000 tonne/year expansion of polypropylene production in Germany by the end of the year based on its Borstar technology.

In April, its Borouge joint venture in Ruwais, Abu Dhabi, awarded $3bn worth of contracts for its expansion projects. The new plants will triple annual production capacity to 2m tonnes/year of polyolefins, Borealis said.

($1 = €0.74)

By: Nigel Davis
+44 20 8652 3214

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