Borouge (BOROUGE) Q1 2026 earnings summary

Executive summary

• Achieved Q1 2026 net profit of $156 million and revenue of $1.2 billion, maintaining high asset utilization and operational resilience despite significant regional disruptions and logistics challenges.

• Activated contingency logistics plans, rerouting 61% of March production via alternative channels, with remaining volumes stored for Q2 sales in a higher price environment.

• Completed Borouge International transactions, forming a top global polyolefins producer and securing operational control of Borouge 4 via agreement with ADNOC and OMV.

• First production from Borouge 4 XLPE unit achieved in April, with further units to be commissioned through 2026.

• Shareholders approved a final dividend for 2025, fulfilling annual dividend commitments.

Financial highlights

• Q1 2026 revenue was $1.2 billion, down 17% year-on-year and 30% sequentially, with net profit of $156 million and adjusted EBITDA of $343 million (29% margin).

• Sales volumes totaled 1.09 million tonnes, with production exceeding sales due to logistics disruptions.

• Cost of sales decreased year-on-year, but selling and distribution expenses rose 39% due to higher freight costs.

• Free cash flow reached $145 million, with cash conversion of 86%.

• Available liquidity at quarter-end was $1.2 billion, with net debt/EBITDA ratio between 1.1x and 1.3x.

Outlook and guidance

• Full-year 2026 production guidance unchanged, targeting ~105% asset utilization, with Q2 utilization expected lower due to April Ruwais incident.

• Higher polyolefin prices anticipated to persist through Q2 and potentially beyond, supported by global supply shortages.

• Inventory built up in March expected to unwind over the next one to two months as logistics normalize.

• Management committed to a minimum annual dividend of 16.2 fils per share through at least 2030.

• Polyethylene and polypropylene premia guided at ~$200/t and ~$140/t, respectively.