Borealis Q2 sales, profits sag on inventory charges, fire at Sweden cracker

LONDON (ICIS)–Borealis second-quarter net profit fell 80% and sales by more than a quarter as the lockdown impact was compounded by an outage at its cracker in Sweden and falling crude oil prices, the Austrian polymers and fertilizers major said on Thursday.

Borealis declared force majeure in mid-May at its Stenungsund cracker after a fire; the facility has production capacities for ethylene (625,000 tonnes/year), propylene (200,000 tonnes/year) and low density polyethylene (LDPE, 350,000 tonnes/year).

The fall in crude prices caused “negative inventory value” developments during the quarter, Borealis said.

Borealis (€/m)	Q2 2020	Q2 2019	Change
Sales	1,529	2,137	-28.4%
Net profit	64	328	-80%

“Certain segments of our diversified application portfolio are performing well: Healthcare, parts of Consumer Packaging, and Fertilizers, but our Automotive business has not been spared the challenges experienced by many players in this industry,” said Borealis’ CEO Alfred Stern.

Borealis is privately owned and has no obligation to report to the stock exchange in the same way publicly-listed firms do

The company is owned by Abu Dhabi’s investment fund Mubadala (64% stake and Austria’s energy major OMV with the remaining 36%.

Borealis’ capital structured is set to change by year end as OMV is to become the majority shareholder (75%).

Borealis holds a 40% stake at the Borouge joint venture in Abu Dhabi, with capacity to produce 4.5m tonnes/year of different polyolefins grades; local oil major ADNOC holds the remaining 60% stake.

ICIS will publish later in the day an interview with Borealis CEO and CFO Mark Tonkens