Borealis announced a net profit of EUR 168 million for the second quarter of 2011, an increase of EUR 76 million compared to the second quarter of 2010. Net profit for the first half of 2011 reached EUR 341 million compared to EUR 146 million during the same period last year. Net debt decreased during the second quarter, resulting in a gearing of 41%, reflecting the company’s overall strong financial position.
Polyolefins and Base Chemicals
The second quarter of 2011 was impacted by continued high volatility in feedstock prices. Borealis’ Polyolefins business delivered a lower profit in the second quarter of 2011 compared to the first quarter of 2011 and the same period last year, as the European market conditions became increasingly challenging, leading to lower volumes and decreasing margins. The Base Chemicals business continued the strong performance of the first quarter of 2011, driven by a high margin environment, improving the results versus same period last year.
Borouge, the ADNOC (Abu Dhabi National Oil Company) / Borealis joint venture, continues to perform well and delivered a significant contribution to Borealis’ net profit in the second quarter of 2011.The expansion of the Borouge petrochemicals plant in Abu Dhabi to a total capacity of 4.5 million tonnes is in the engineering, procurement and construction (EPC) phase and is running according to schedule. Wim Roels has been appointed CEO of Borouge Pte, the Borouge Marketing Company headquartered in Singapore. Wim Roels brings a broad polyolefin background including production, innovation and business management. Wim Roels succeeds William Yau, who assumes the role of Borealis Senior Vice President for Commercial Excellence and has been appointed to the Board of Borouge Pte.
Linz Production Site Investment
On June 22 Borealis announced the closure of two melamine low pressure plants in Linz, Austria. This represents an integral part of the strategy to improve competitiveness and to focus investment and production on high pressure technology plants. This step is part of the broader scope of the EUR 145 million investment programme for the entire Linz production site.
Expansion into Southeast Europe
Continuing the company’s strategy to expand its Base Chemicals business into Southeast Europe, Borealis has announced the establishment of a new subsidiary, Linzer Agro Trade Bulgaria, as well as the investment of EUR 4.5 million for the construction of a new import hub in Giurgiu, Romania. The new hub will serve both the Bulgarian and Romanian markets. A distribution point in Timisoara, Romania is also planned for this year.
“Our second quarter financial results are strong,” says Mark Garrett, Chief Executive of Borealis. “However volatility remains high and based upon the recent softening of the market conditions we expect the second half of the year to be much more challenging. These past years have demonstrated Borealis’ capabilities in dealing with these turbulent conditions, I am confident that we will be able to weather the next wave as well.”