Borealis delivers strong financial result in softening market environment
photo: Borealis CEO Alfred Stern
photo: © Borealis
- Borealis announces strong full-year result with net profit of EUR 872 million despite softening polyolefins market in Asia and pressure on integrated polyolefins margins in Europe
- Net profit of EUR 138 million in fourth quarter 2019 contributes to solid overall performance
- Borealis to roll out new corporate strategy in 2020
| Key figures and ratios | Q4 2019 | Q4 2018 | FY 2019 | FY 2018 | |
|---|---|---|---|---|---|
| Net Sales | EUR million | 1,858 | 2,091 | 8,103 | 8,337 |
| Total Sales* | EUR million | 2,246 | 2,551 | 9,768 | 9,937 |
| Net Profit | EUR million | 138 | 94 | 872 | 906 |
| Reduction/(increase) in net interest-bearing debt | EUR million | (212) | 151 | (241) | (515) |
| Gearing | % | 24% | 20% |
* Net sales of Borealis plus pro-rata sales of at equity consolidated companies
Borealis announces a net profit of EUR 138 million for the fourth quarter of 2019, compared to EUR 94 million in the same quarter of 2018. While the 2018 result was impacted by a one-off impairment charge of EUR 92 million, the result in the fourth quarter of 2019 was driven by a soft polyolefins market in Asia, lowering the contribution from Borouge. At the same time, the improved performance of the Fertilizer, Melamine and Technical Nitrogen Products segment partially mitigated the negative impact of weakening integrated polyolefins margins in Europe during the last quarter of 2019.
For the full year 2019, the company recorded a net profit of EUR 872 million, compared to EUR 906 million in 2018. The 2019 result was negatively impacted by a lower polyolefins price environment in Asia, which affected the contribution from Borouge. However, the negative impact was limited due to healthy integrated polyolefins margins in Europe together with improved results in the Fertilizer, Melamine and Technical Nitrogen Products segment.
In the fourth quarter, net debt rose by EUR 212 million. Over the full year 2019, net debt increased by EUR 241 million, driven largely by the high investment level related to growth projects and the payment of a EUR 525 million dividend for 2018 and a EUR 300 million interim dividend for 2019 to Borealis shareholders. The cash inflow from the solid business result and dividends from Borouge enabled Borealis to keep its financial position strong, with a gearing of 24% at year-end 2019.
Review and Outlook
“In 2019, Borealis delivered a strong financial result, only slightly below 2018 – and despite a softened economic environment. Due to the weaker global economy and heightened concern with regard to ongoing geopolitical uncertainties, we expect market conditions to remain challenging throughout 2020. Nevertheless, we anticipate that the year will be a solid one,” comments Borealis CEO Alfred Stern.
“In the first quarter of 2020, Borealis will roll out a new corporate strategy which builds on core Borealis values and capabilities in order to achieve sustainable growth moving forward. The essential dimensions of the new strategy include the transformation to a circular economy and the creation of an even more customer-centric organisation that adds value on a global scale. The successful implementation of the strategy will strengthen Borealis’ leading position in the industry.”
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For further information, please contact:
Virginia Mesicek
Senior Manager a.i., External Communications
tel.: +43 1 22 400 772 (Vienna, Austria)
e-mail: virginia.mesicek@borealisgroup.com
