18 March 2010 13:04 [Source: ICIS news]
(Adds CEO comments throughout)
Major projects such as Borouge 2 - a joint venture with Abu Dhabi National Oil Company (ADNOC) at Ruwais in the United Arab Emirates, which is expected to come online in mid-2010 - meant the company would incur costs in the months between start-ups and products finally reaching customers, as no value in terms of additional sales would be created, according to Garrett.
“We expect 2010 to be even tougher instead of being easier,” Garrett said.
“We think the economy is still nervous, and although we see some recovery, we believe it will be more difficult for our company because we are starting up both Barouge 2 and a LDPE [low density polyethylene] plant at Stenungsund in
However, Garrett added that once the company’s major projects were completed, Borealis would start to reap the rewards and the industry would see the group’s financial figures improve.
The company would continue to focus on innovation, improving operations, cash generation and cost cutting, Garrett said.
The polyolefin maker posted a fourth-quarter net profit of €13m ($17.8m), reversing the heavy €122m loss incurred in the same period of 2008.
It also recorded an operating profit of €11m in the last three months of 2009, against a €199m loss in the previous corresponding period, despite a 5.9% fall in sales to €1.27bn.
For the full year, Borealis’s net profit shrank 84% year on year to €38m as sales plunged 30% to €4.71bn, the company said. Operating profit last year declined 85.3% to €24m.
Reflecting on the results, Garrett was upbeat about Borealis’s performance.
“Despite a tough year for the plastics industry, Borealis achieved a positive result,” Garrett said.
“The figures are a much better result than what we achieved in the boom years... this result was much tougher to achieve because if you look back then, everyone was making money and now we are making money when no one else has been,” he added.
($1 = €0.73)
Additional reporting by Pearl Bantillo
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