Borouge (BOROUGE) Q2 2024 earnings summary

Executive summary

• Achieved record quarterly production and sales volumes in Q2 2024, with net profit up 33% year-on-year to $308 million and H1 net profit up 35% to $581 million, supported by disciplined cost management and operational excellence.

• Industry-leading EBITDA margin of 41% in Q2 2024, with robust price premia for polyethylene and polypropylene.

• Maintained high asset reliability (97%) and utilization rates, achieving highest-ever quarterly production of 1,355kt in Q2.

• Strategic focus on high-value products, geographic optimization, and innovation, with Asia Pacific accounting for 66% of sales volume.

• Advancing major growth projects, including Borouge 4 (over 70% complete) and a 1.6 million tonne specialty polyolefins joint venture in China.

Financial highlights

• Q2 2024 revenue reached $1.5 billion, up 6% year-on-year and 15% sequentially; adjusted EBITDA for Q2 was $613 million (+18% YoY, +8% QoQ).

• H1 2024 adjusted EBITDA was $1.18 billion (+21% YoY); net profit for H1 was $581 million (+35% YoY).

• Q2 sales volumes reached 1,311kt, up 16% sequentially and 9% year-on-year; polyethylene sales at 752kt (+14% YoY), polypropylene at 559kt (+2% YoY).

• Adjusted operating free cash flow in Q2 was $581 million, up 17% YoY, with a 95% cash conversion rate.

• Cost per tonne improved 6% YoY; cost base (excluding D&A) flat YoY in Q2, down 11% YoY for H1.

Outlook and guidance

• Stable macroeconomic environment and polyolefin prices expected in H2 2024, supported by strong crude oil prices, logistics bottlenecks, and low operating rates.

• High utilization rates and efficient asset management to continue; Borouge 3 turnaround postponed to Q2 2025, unlocking $20–$40 million in incremental EBITDA.

• FY 2024 dividend guidance maintained at $1.3 billion, with interim dividend of $650 million to be paid in September 2024 (subject to approval).

• Management maintains over-the-cycle premia guidance: ~$200/tonne for polyethylene, ~$140/tonne for polypropylene.

• Continued focus on cost optimization and strong production volumes.