Good result for Borealis

Solid quarter, growth and commitment to plastics recycling

Marketing - Wednesday, 7 November 2018

The leading provider of innovative solutions in the fields of polyolefins and base chemicals, Borealis, announced a net profit of 279 million euros for the third quarter of 2018, compared to 273 million euros in the same quarter of 2017. The good result in the third quarter was supported by the strong profit contribution from Borouge. European integrated polyolefin margins continue at a decent level. The fertilizer business performance remains under pressure.

In the third quarter, net debt increased by 282 million euros. An interim dividend for 2018 of 300 million euros and investments related to growth projects were only partially offset by the strong cash inflow from the business. Borealis financial position remains strong, with a gearing of 23% at the end of the third quarter of 2018.

Bayport Polymers - the 50/50 joint venture owned by Total and Novealis Holdings - the joint venture of Borealis and Nova Chemicals - announced the final investment decision to build a 625,000 tonne/year polyethylene unit at its production site in Bayport, Texas.

The new unit will use Borstar technology and more than double the site’s polyethylene capacity to 1,100,000 tonne/year with a start-up scheduled in 2021. The unit engineering, procurement and construction has been awarded to McDermott and is expected to employ 1,750 staff during peak activity.

Formed in May 2018, Bayport Polymers is currently building a one-million-tonnes per year steam cracker in Port Arthur, Texas. This cracker will process ethane, which is abundantly available and competitively priced in the U.S. and will supply Bayport polyethylene units.

The company announced the appointment of Rainer Höfling as CEO of its dedicated Fertilizer & Melamine business, as of October 1, 2018. This business will include both operational, commercial and supporting functions and comprises approximately 2,000 employees. The dedicated management team under the lead of Rainer Höfling will provide higher agility and increased customer focus for the business.

Borealis also announced that Markku Korvenranta, Borealis EVP Base Chemicals, would step down from his role, as of September 30.

Borealis also announced the full acquisition of the Austrian plastics recycler Ecoplast Kunststoffrecycling. Based in Wildon, Austria, Ecoplast processes around 35,000 tonnes of post-consumer plastic waste from households and industrial consumers every year, turning them into high-quality LDPE and HDPE recyclates, primarily but not exclusively for the plastic film market. Borealis has made PO recycling a key element of its overall PO strategy because of its potential to support both growth and sustainability, as well as its ability to support the growing customer demand for recycled PO.

"With the solid result in the third quarter, Borealis is showing a strong year-to-date financial performance. The outstanding profit contribution of Borouge and the decent integrated polyolefin margins have been the main elements for this result", said Alfred Stern, Borealis chief executive. "For the fourth quarter of 2018 Borealis expects further softening of the integrated polyolefin margins and ongoing challenges in the fertilizer market environment”.

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