Borealis reports €56m Q1 net loss on economic downturn

05 May 2009 09:40  [Source: ICIS news]

LONDON (ICIS news)--Borealis has reported a first-quarter net loss of €56m ($75m), down from a profit of €130m in the same period last year, due to the impact of the global economic downturn, the company said on Tuesday.

“Results were negatively impacted by the high cost inventory produced in the fourth quarter of 2008, which was largely cleared in the first quarter of 2009,” said the polyolefins producer.

Sales dropped nearly 40% year on year to €1.03bn from €1.70bn. The company reported an operating loss of €72m compared with profits of €137m in the first quarter of last year.

Borealis said that despite the continuous challenging market conditions, both polyolefins sales volumes and prices had shown some recovery from the fourth quarter, when the company recorded a net loss of €122m and an operating loss of €199m.

“After a dramatic drop in demand, the world economy has stabilised at a low level. We do not expect real demand to recover before the end of 2010,” said Borealis CEO Mark Garrett.

The company said that in addition to the planned start-up of its Borouge 3 polyolefins plant in the United Arab Emirates, it was also on schedule to complete its 350,000 tonne/year low density polyethylene (LDPE) plant in Stenungsund, Sweden, by the end of the year.

“The investments in Abu Dhabi and Stenungsund as well as the expansion of our innovation headquarters in Linz [in Austria] confirm our long-term commitment to providing innovative solutions to the market and will guarantee a strong competitive position when the global economy recovers,” said Garrett.

($1 = €0.75)

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By: Hilde Ovrebekk
+44 20 8652 3214

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