Borouge (BOROUGE) Q3 2024 earnings summary

Executive summary

• Q3 2024 net profit rose 16% year-over-year to $328 million, with a 6% sequential increase, driven by record production and highest-ever quarterly sales volumes.

• 9M 2024 net profit totaled $908 million, a 27% increase year-over-year.

• Borouge 4 expansion project is 80% complete, set to boost annual production capacity by 28% and add $1.5–$1.9 billion in annual revenue.

• Management reaffirms commitment to a $1.3 billion dividend for FY 2024, representing a 6.3% yield.

• Maintained high asset reliability (98%) and utilization rates (PE: 106%, PP: 109%) in Q3.

Financial highlights

• Q3 2024 sales volumes reached 1,422 kt (+2% YoY, +8% QoQ); 9M 2024 sales volumes were 3,869 kt (+3% YoY).

• Q3 adjusted EBITDA was $646 million (+9% YoY, +5% QoQ) with a 40% margin; 9M 2024 adjusted EBITDA was $1,827 million (+16% YoY) with a 41% margin.

• Q3 revenue reached $1.6 billion, up 7% YoY and 6% QoQ, driven by higher sales volumes.

• Q3 adjusted operating free cash flow was $605 million (+6% YoY, +4% QoQ); 9M 2024 adjusted OFCF was $1,740 million (+20% YoY).

• Net debt to LTM EBITDA ratio: 1.3x as of 30 September 2024.

Outlook and guidance

• Stable macroeconomic environment expected in core markets for the rest of 2024, with moderate GDP growth.

• Polyolefin prices anticipated to remain within a narrow volatility band; higher year-end supply may pressure prices.

• Continued strong production volumes and ongoing cost optimization expected in Q4.

• Planned maintenance turnaround for Borouge 3 plant shifted from Q4 2024 to Q2 2025.

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