UpdateBorealis' profits up, expects record year

12 November 2007 12:09  [Source: ICIS news]

(Updates and adds details throughout.)

 

LONDON (ICIS news)--Borealis posted a 29% increase in third-quarter operating profits year on year to €143m ($208m) despite polyolefins production disruptions in Austria and was set to rack up a record year, the Vienna-based plastics producer said on Monday.

 

The company was on course for another year of record-breaking earnings in 2007, as nine-month operating profits were reported at €423m, 73% higher than the same period last year, CEO John Taylor said.

 

Net profits more than doubled to €225m for the third quarter, up from €104m in the same period a year ago, which included a €105m one-off gain from the sale of its Norwegian business and share in the Noretyl cracker to INEOS.

 

Third-quarter sales reached €1.67bn, 9% higher than the same period last year.

 

Its polyethylene (PE) and polypropylene (PP) activities in Schwechat, Austria, were shutdown during August, which lowered expected third-quarter earnings, the company said.  

 

Operating profits were down 6% from the second quarter due to this outage and a general seasonal summer slowdown, it added.

 

“Our strong performance reaffirms the continued success of our ‘value creation through innovation’ strategy in the infrastructure, automotive and advanced packaging markets,” said Taylor.

 

“Specifically, our divestment in Norway aimed at increasing the cost competitiveness of our European operations contributed to our good results,” he added.

 

The company’s sales volumes were about 3-4% higher in 2007, with the growth for infrastructure applications around twice that figure, said CEO designate Mark Garrett.

 

The growth of mobile phone usage had actually increased the demand for plastic cables, while pipes remained a key growth area in both the developed and developing world, the group said.

 

However, Borealis was having more problems passing on price increases than at the beginning of the year, due to the unexpected spike in the value of crude, it said.

 

($1 = €0.68)

By: Mark Watts
+44 20 8652 3214

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