| Key figures and ratios (Quarter ending March 31, 2006) | Q1 2006 | Q1 2005 | Q4 2005 | Q1-4 2005 | |
|---|---|---|---|---|---|
| Sales revenue | EUR Million | 1,332 | 1,144 | 1,264 | 4,814 |
| Operating profit / (loss) | EUR Million | 36 | 110 | 45 | 236 |
| Net profit / (loss) after tax | EUR Million | 31 | 84 | 52 | 226 |
| Reduction / (increase) in net interest-bearing debt | EUR Million | (79) | (89) | (29) | (110) |
| Gearing | % | 49% | 44% | 44% | 44% |
| ROCE after tax | % | 17% | 12% |
Borealis today announced the financial results of the first quarter, reporting an operating profit of EUR 36 million. The result was adversely impacted by provisions related to the recently announced decision to close a 110,000 tonnes high density polyethylene unit in Norway, consistent with Borealis' strategic direction and further improving overall competitiveness. The results were also affected by an additional insurance premium surcharge arising from heavy losses suffered by the insurance industry.
Borealis recently announced its decision to develop the Innovation Centre in Linz, Austria into the centre of its international research activities. This will include significantly increasing the number of employees at the Centre and investing EUR 25-30 million in facilities over the next five years.
The decision is part of a broader agreement with the government of Upper Austria to invest around EUR 19 million by 2011 in strengthening Upper Austria as a plastics industry research hub. In close cooperation with Johannes Kepler University and Wels Advanced Technical College, this commitment will lead to enhanced educational activities and general facilities.
An additional investment of EUR 6-7 million in 2006 by Borealis was announced for improvements at our Innovation Centre in Finland. Plans were also revealed regarding the creation of an Innovation Centre in Abu Dhabi as part of the continued growth and success of Borouge, our joint venture with the Abu Dhabi National Oil Company (ADNOC).
Net interest-bearing debt increased EUR 79 million during the quarter influenced by higher working capital values resulting from higher prices and sales volumes as well as a EUR 45 million dividend payment.
Commenting on the performance, Chief Executive John Taylor said:
"In a quarter characterised by further rises in feedstock and energy prices combined with volatile demand patterns, we successfully commercialised the capacity expansions completed last year strengthening our overall European market position. In this context, we continue striving to increase our plastics prices to maintain profitability."
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Borealis and Borouge are leading providers of innovative, value creating plastics solutions. With more than 40 years of experience in polyolefins and using our unique Borstar® technology, we focus on the infrastructure, automotive and advanced packaging markets across Europe, the Middle East and Asia. Our production facilities, innovation centres and service centres work with customers in more than 170 countries to provide the materials that make an essential contribution to society and sustainable development. We are committed to the principles of Responsible Care® and to leading the way in 'Shaping the Future with Plastics'™.
For more information on Borealis and Borouge, a joint venture between Borealis and the Abu Dhabi National Oil Company, visit www.borealisgroup.com and www.borouge.com.
Borstar® is Borealis’ proprietary technology supporting differentiated PE and PP products and is a registered trademark of Borealis A/S.
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