Borouge resumes full asset availability in June despite margin pressure from rising logistics costs.
Abu Dhabi: Borouge reported a 23 per cent quarter-on-quarter increase in net profit to $191 million in the second quarter of 2026, while confirming that its annual dividend plan remains unchanged at 16.2 fils per share.
Revenue rose to $1.4 billion, up from $1.2 billion in the previous quarter, while adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased to $401 million from $343 million.
The Abu Dhabi-listed petrochemicals company sold 0.9 million tonnes during the quarter, surpassing production of 0.7 million tonnes as it released additional inventory through alternative logistics channels.
Average realised prices increased 53 per cent quarter on quarter, driven by a global shortage of polyolefins and record premiums for Borouge’s specialised products.
However, higher freight and logistics costs, along with rising propylene feedstock expenses, put pressure on margins despite the more favourable pricing environment.
Full asset availability restored
Borouge completed repairs to the units affected by the April 5 incident at its Ruwais complex by the end of June, bringing all impacted assets back to full production availability ahead of schedule.
“The swift and coordinated response enabled us to implement effective alternative logistics routes, ensuring we shipped all volumes produced, supplemented by additional volumes from inventory, during the quarter, without dependency on the Strait of Hormuz,” said Hazeem Sultan Al Suwaidi, CEO of Borouge.
Production at parts of the complex had been temporarily halted following the incident. Repair work began after an initial assessment and was accelerated throughout the second quarter to restore operations.
The company expects the repair work to lead to only a modest increase in maintenance capital expenditure during 2026. However, production has continued to be limited by feedstock availability since the affected assets were brought back online.
Borouge reported an average utilisation rate of 60 per cent during the quarter. The company said the restoration of full asset availability provides a foundation for higher utilisation levels in the second half of the year, subject to the availability of feedstock and logistics capacity.
Alternative routes help maintain customer supply
During the regional disruption, Borouge established alternative road, rail and sea transport routes to keep customer deliveries moving. These measures enabled the company to ship all available production, along with additional inventory volumes, during the quarter.
The company continued supplying its key markets despite challenges affecting regional logistics networks and maritime movement.
The availability of transport through the Strait of Hormuz, together with feedstock supply conditions, will play a key role in determining the pace of Borouge’s production and sales recovery during the second half of 2026.
Higher prices support earnings
The rise in average realised prices helped Borouge offset some of the impact from higher freight, logistics and raw material costs during the quarter.
According to the company, the improved pricing environment was supported by tighter global polyolefin supply and sustained demand for Borouge’s specialised products.
Borouge expects average realised prices to remain strong in the near term, although logistics costs are also likely to stay elevated.
Borouge 4 expansion progresses
The company continues to advance its Borouge 4 expansion project, which is expected to further strengthen production capacity and support future growth.
Work on the Borouge 4 expansion project continued during the quarter, with the new Cross-Linked Polyethylene plant reaching commercial operations after completing successful performance tests.
The facility has delivered its first batch of products to customers and is expected to add 100,000 tonnes of annual capacity, doubling Borouge’s Cross-Linked Polyethylene production.
The broader Borouge 4 development is designed to expand the company’s total production capacity by 1.4 million tonnes. Additional facilities under the project are expected to start operations during 2026 and 2027.
Dividend intention remains unchanged
Borouge kept its annual dividend intention unchanged at 16.2 fils per share following the establishment of Borouge International in March.
Borouge International brings together operations across 30 manufacturing sites with a combined annual production capacity of 13.6 million tonnes, positioning it as the world’s fourth-largest polyolefins producer by nameplate capacity.
The merged business reported adjusted EBITDA of $1.8 billion in the second quarter, helped by stronger pricing across its operations in North America and Europe.
A proposed tender offer that would allow Borouge shareholders to exchange their holdings for shares in Borouge Group International AG is expected in 2027, subject to market conditions and approval from the UAE Capital Market Authority.
