Borealis’ third quarter shows continued positive results development in a market that remains volatile
- Borealis reports a net profit of EUR 46 million in the third quarter, resulting in a net profit of EUR 25 million year to date
- Continued focus on cost competitiveness, cash generation and operational excellence as sales margins continue to be under pressure
- Significant progress of all investment projects in Linz (Austria), Stenungsund (Sweden) and of Borouge in Abu Dhabi
- Donation of pipe material to earthquake victims in l’Aquila, Italy sets major milestone in Borealis’ Water for the World™ initiative
| Key figures and ratios (Quarter ending September 30, 2009) | Q3 2009 | Q3 2008 | YTD 2009 | YTD 2008 | |
|---|---|---|---|---|---|
| Sales revenue | EUR Million | 1,281 | 1,830 | 3,447 | 5,351 |
| Operating profit / (loss) | EUR Million | 58 | 173 | 13 | 362 |
| Net profit / (loss) after tax | EUR Million | 46 | 159 | 25 | 361 |
| Reduction / (increase) in net interest-bearing debt | EUR Million | (58) | (207) | (36) | (546) |
| Gearing | % | 47% | 46% | 47% | 49% |
Borealis, a leading provider of chemical and innovative plastics solutions, announces a net profit of EUR 46 million for the third quarter of 2009, a 31% improvement compared to the second quarter of 2009 but a 71% lower result compared to the third quarter of 2008. The positive net profit development in the second and third quarters reflects the company’s continuous focus on cost competitiveness, cash generation and operational excellence. The gearing ratio of 47% almost remained the same compared to the second quarter of 2009; net debt increased, driven by Borealis’ ongoing strategic investments.
Borealis’ sales margins improved slightly but are still below historic levels and due to the anticipated additional volumes coming on stream from the Middle East this trend is not expected to change. In the melamine and fertiliser businesses, margins and sales volumes continue to be under significant pressure.
Borealis’ major investment in a new 350,000 t/y low-density polyethylene plant in Stenungsund, Sweden is on track. Start-up activities are going to be kicked off by the end of 2009. The expanded Innovation Headquarters in Linz, Austria is ready to be inaugurated in November of this year.
Borouge 2, which will triple the polyolefins capacity at Borealis’ joint venture in Abu Dhabi to 2 million tonnes by the middle of 2010, continues to be well on track with more than 20,000 people working at the construction site. A further expansion to 4.5 million tonnes of polyolefins by 2013 (Borouge 3) is also making good progress.
In August 2009, Borealis declared the intention to close the HDPE production unit in Beringen, Belgium in order to safeguard the economic viability of the location. The information and consultation phase has been formally disclosed and it was decided that the plant will be closed by March 31, 2010.
In September a significant milestone was achieved in the Water for the World™ programme as Borealis announced the donation of water pipes needed for the establishment of temporary houses in L'Aquila, Italy, a region that was heavily destroyed by an earthquake in April 2009. Borealis is supplying polyethylene material and System Group-Centraltubi is producing the pipes and fittings. The installations will be completed before the winter period at the end of 2009.
“Although we recorded positive results in the last two quarters, we believe that the major part of the new capacities from the Middle East is yet to come on to the market,” says Borealis Chief Executive Mark Garrett. “Despite continued challenging market conditions, we will stay true to our strategy, focus on safety, cost competitiveness, cash generation and operational excellence as well as remain committed to Corporate Social Responsibility and Water for the World, as we believe that this programme can make a real difference to society.”
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For further information, please contact:
Kerstin Meckler, Head of Communications
Tel. +43 122 400 389,
Email: kerstin.meckler@borealisgroup.com