First quarter

Borealis starts strongly in 2018, advances on key growth initiatives

Marketing - Tuesday, 8 May 2018

The leading provider of innovative solutions in the fields of polyolefins and base chemicals, Borealis, announces a net profit of 240 million euros for the first quarter of 2018, compared to 313 million euros in the same quarter of 2017. The strong result came in despite a full Borouge 2 turnaround and was driven by lower but still healthy European integrated polyolefin margins and a solid profit contribution from Borouge. The contribution from base chemicals improved compared to the first quarter of 2017, despite a continuing difficult fertilizer market environment.

Net debt increased by 559 million euros in the first quarter, largely due to the payment of a 700 million euros dividend to Borealis shareholders. Despite the increase in net debt, Borealis financial position remains strong, with a gearing of 23% at the end of the first quarter 2018.

Total, Borealis and Nova Chemicals signed definitive agreements to form a joint venture in petrochemicals on the US Gulf Coast. The joint venture - in which Total will own 50% and Novealis Holdings, a joint venture between Borealis and Nova Chemicals, will own the remaining 50% - will commence subject to customary closing conditions, including receipt of regulatory approvals.

Borealis and United Chemical Company signed a joint development agreement (JDA) for the development of a world-scale polyethylene project, integrated with an ethane cracker, in the Republic of Kazakhstan. The signing of the JDA comes after the successful conclusion of a prefeasibility study. The project will now move into the feasibility study phase, which is expected to run until first quarter 2019. The scope of the JDA will include the construction of an ethane cracker and 2 Borstar PE units, with a total capacity of 1,250 ktpa and with a pre-investment in the cracker for future expansion. The final investment decision on the project is expected to be taken in 2020 and start-up would be scheduled for 2025.

“Borealis continues to benefit from the healthy polyolefins industry margin supporting the strong polyolefins business profit contribution”, comments Mark Garrett, Borealis chief executive. “The Borouge result in the first quarter was solid but was naturally impacted by the Borouge 2 turnaround and by the limited availability of feedstock. The continued excellent financial performance of 2017 and Borealis’ strong financial position has enabled us to pay a 700 million euros dividend to our shareholders”.

“In the second quarter, Borealis expects a strong result. We anticipate the polyolefins business and Borouge to continue to perform well, while the fertilizer market conditions will remain challenging. The focus in 2018 is on advancing the major global growth projects".

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