Borealis announced a net profit of EUR 54 million for the third quarter of 2010. The result exceeds the performance in the third quarter of 2009 by 15%, although profitability reduced from the second quarter of 2010 largely due to the impact of start-up and turnaround activities.
The net debt position improved during the third quarter which provides continued flexibility for Borealis to pursue its long-term strategic projects. Gearing reached 39% at the end of September 2010 which is now slightly below Borealis’ target range of 40-60%.
Feedstock prices slightly decreased compared to the second quarter of 2010. Polyolefin market prices stabilised resulting in a further improvement of the polyolefins business group results, while the cracker margins were impacted by turnaround activities. The plant nutrient and melamine businesses delivered improved financial performance driven by a favourable market environment.
During the third quarter, Borealis announced changes in its Executive Board. Herbert Willerth took on the responsibility for the Middle East & Asia under the umbrella of his current role of Deputy CEO. Executive Board member, Gerd Löbbert, has taken on the position of Executive Vice President Polyolefins, while Markku Korvenranta joined the Executive Board as Executive Vice President Base Chemicals, effective October 1, 2010.
The Borouge 2 project in Abu Dhabi, UAE, is well on track and the expanded plant is starting-up as planned with all olefin and polyolefin units operational by the end of the third quarter. With this investment of approximately USD 5 billion, Borouge expands its product offering into polypropylene while tripling its overall polyolefins capacity to over 2 million tonnes per year. This enhances its ability to fully serve the growing Middle East and Asia markets. The Borouge 3 project is on schedule with land preparation activities adjacent to the Borouge 2 site almost completed. While still in start-up mode, the new LDPE plant in Sweden has initially demonstrated high quality output, which has been confirmed by tests with key customers. The organisation continues to work towards delivering consistent operability.
Investments continue in Europe, with the groundbreaking ceremony for the semi-commercial catalyst plant in Linz planned for early 2011. The Engineering, Procurement and Construction (EPC) contract was signed at the end of September. The investment programme for the plant nutrient and melamine plants in Linz is also ongoing according to plan.
“In 2010 the market recovered more quickly than anticipated, which has a direct positive effect on our results,” says Borealis Chief Executive Mark Garrett. “However we believe the world economy is still volatile and the positive trend in the polyolefins business will not be a steady upswing therefore we continue to follow the market developments closely. Our focus on Innovation, Operational and Commercial Excellence remains unchanged as does our constant commitment to safety in everything we do.”