Borealis delivers solid profits in a difficult market environment

Borealis, a leading provider of chemical and innovative plastics solutions, recorded a net profit of EUR 112 million for the second quarter of 2012 compared to EUR 168 million in the same quarter in 2011. Net profit for the first half of 2012 reached EUR 252 million compared to EUR 341 million during the same period of the record year 2011.

The Base Chemicals business and Borouge, Borealis’ joint venture in Abu Dhabi, continued to perform well in the second quarter of 2012, contributing significantly to the net profit. The European Polyolefins business delivered lower results in the second quarter. This is attributed largely to a weak economic sentiment in a decreasing price environment with the oil price decreasing rapidly from above USD 125 per barrel to below USD 100 per barrel. Borealis’ financial position remained strong with a gearing of 44% at the end of June 2012.

The Borouge 3 expansion project in Abu Dhabi, UAE, is progressing according to plan with some 23,000 contractor personnel currently on site. The expansion is on track to increase the annual production capacity of the integrated olefins/polyolefins site from 2 million tonnes to 4.5 million tonnes by mid-2014.

The construction of the semi-commercial catalyst plant in Linz, Austria is progressing towards its planned finalisation in the second half of this year. The first chemical raw materials are expected to be delivered on site in August 2012.

In June Borealis successfully launched its second retail bond transaction in Austria with a maturity of 7 years. Due to strong investor demand the transaction amount was increased to EUR 125 million from initially EUR 100 million. The company has also successfully completed a US private placement with maturities of up to 15 years and a total amount of more than USD 130 million. These transactions reflect Borealis' strategy to maintain a strong liquidity position by the terming out its debt through diverse channels.

Source: Borealis