Borealis lifts 2nd quarter net profit to EUR 92 million, and introduces eleven new plastics grades
|Key figures and ratios|
(Quarter ending June 30, 2006)
|Sales revenue||EUR Million||1,454||1,174||2,786||2,318|
|Operating profit / (loss)||EUR Million||98||55||134||165|
|Net profit / (loss) after tax||EUR Million||92||51||123||135|
|Reduction / (increase) in|
net interest-bearing debt
Borealis today announced a net profit of EUR 92 million for the second quarter, compared to EUR 31 million in the previous quarter, and EUR 51 million for the same period last year.Chief Executive John Taylor commented: "On the back of reasonable demand, our solid financial results benefited from the consistent delivery of our value creation strategy driving improvements in our asset configuration and product portfolio."
Borealis' investment in its leading proprietary technology, Borstar®, continues to pay off with the second quarter results being favourably impacted by the successful commercialisation of new Borstar® capacity. This started to come on stream in Austria in the fourth quarter of 2005 through a new 350,000 tonnes Borstar polyethylene (PE) plant and a 90,000 tonnes expansion of the existing Borstar polypropylene (PP) plant. The investment has significantly strengthened Borealis' position in the flexible packaging market, particularly in the fast growing LLDPE segment. Simultaneously, 100,000 tonnes of HDPE capacity was closed in Austria. In addition, Borealis recently announced the decision to close a further 110,000 tonnes of HDPE capacity in Norway by the end of the year, enabling a stronger focus on target market segments.
The improved financial results were achieved despite pressure from high and volatile feedstock and energy prices, demonstrating Borealis' reinforced financial discipline to add value through the supply chain. Net interest-bearing debt grew by EUR 36 million, influenced by higher raw material prices driving up working capital value. Even so, the gearing ratio dropped slightly to 48% due to the increase in retained earnings.
Borouge, Borealis' joint venture with the Abu Dhabi National Oil Company (ADNOC), continued to contribute to the improved results, demonstrating the success of the companies' shared strategy.
Looking ahead, John Taylor stated: "As we progress the implementation of our value creation strategy we will announce further steps to improve our competitiveness and our ability to provide innovative solutions to our customers."