Borouge (BOROUGE) Q1 2025 earnings summary

Executive summary

• Q1 2025 net profit rose 3% year-over-year to $281 million, driven by strong sales volumes, record production, and product mix optimization, especially in Asia Pacific and Middle East markets.

• EBITDA remained robust at $564 million, maintaining a 40%+ margin for seven consecutive quarters, reflecting cost discipline and stable pricing.

• Revenue increased 9% year-over-year to $1.42 billion, with sales volumes up 10% to 1,252 kilotons, led by APAC and Middle East markets.

• Dividend guidance for 2025 raised to 16.2 fils per share ($1.33 billion total), with a 90% payout policy and share buyback program underway.

• Announced the formation of Borouge Group International, integrating Borouge, Borealis, and Nova Chemicals, expected to close in Q1 2026.

Financial highlights

• Q1 2025 revenue was $1.42 billion (+9% YoY), net profit $281 million (+3% YoY), and adjusted EBITDA $564 million (40% margin, flat YoY).

• Adjusted operating free cash flow reached $523 million, with a 93% cash conversion ratio.

• Net debt to EBITDA stood at 0.9x as of March 31, 2025, indicating a strong balance sheet.

• Cost of sales up 20% year-on-year but stable as a percentage of revenue; selling & distribution expenses fell 38% quarter-on-quarter.

• Polyethylene and polypropylene premia increased to $244/ton and $154/ton, respectively, above management guidance.

Outlook and guidance

• Optimistic outlook for 2025, with supportive fundamentals in Asia and the Middle East and resilient infrastructure demand.

• Dividend floor set at 16.2 fils per share for FY2025, with a projected yield over 6%.

• Share buyback commenced in April, with up to 2.5% of shares targeted and 64 million shares repurchased to date.

• Borouge 3 turnaround in Q2 expected to reduce production by 320 kilotons as part of regular maintenance.

• Borouge Group International expected to deliver $7 billion EBITDA through cycle, with at least $500 million annual synergies.