Austria Borealis Q2 net profit falls 33% on polyolefins business

09 August 2012 09:00  [Source: ICIS news]

LONDON (ICIS)--Borealis’ second-quarter net income fell 33% year on year to €112m ($138m), as its Polyolefins business was impacted by difficult market conditions, the Austria-based plastics producer said on Thursday.

The group’s sales in the second quarter fell 1.6% year on year to €1.87bn.

The company said its Base Chemicals business and Borouge, Borealis’ joint venture with United Arab Emirates (UAE) state-owned Abu Dhabi National Oil Co (Adnoc), continued to perform well in the second quarter of 2012, contributing significantly to its net profit. Detailed segment data was not disclosed.

However, its European Polyolefins business delivered lower results in the second quarter, largely because of “weak economic sentiment in a decreasing price environment with the oil price decreasing rapidly from above $125/bbl”, it said.

Borealis CEO Mark Garrett said: “The political and economic situation in Europe is difficult and the markets have reacted accordingly.”

“We have seen a significant drop in polyolefin prices and margins in the second quarter of 2012. Despite this, Borealis has produced a resilient set of results with particularly pleasing performance from our Base Chemicals Business and the Borouge joint venture,” he added.

Net profit for the first half of 2012 reached €252m compared with €341m during the same period last year, while sales remained flat at €3.75bn.

Within its financial earnings statement, Borealis said the Borouge 3 expansion project at Ruwais, Abu Dhabi, in the UAE, is progressing as planned. The company said around 23,000 contractor personnel are now on site and is currently on track to increase the annual production capacity of the integrated olefins/polyolefins facility from 2m tonnes to 4.5m tonnes by mid-2014.

The company added that its construction of a semi-commercial catalyst plant in Linz, Austria, is progressing towards its planned finalisation in the second half of this year, with the first chemical raw materials expected to be delivered on site this month.

Looking ahead, Garrett said: “I believe Borealis will continue to outperform the market by maintaining our focus on cost competitiveness and our four pillars of safety, innovation operational and commercial excellence.”

($1 = €0.81)

By: Franco Capaldo
+44 (0)20 8652 3214

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