Abu Dhabi-based Borouge Plc, a prominent provider of innovative polyolefins solutions in the petrochemicals industry, has received shareholder approval for a final cash dividend of $650 million (7.94 fils/share) for the year 2023 at its Annual General Meeting (AGM).
Furthermore, the company has affirmed its commitment to delivering shareholder value by announcing its intention to distribute a total dividend of $1.3 billion for the year 2024.
Read more: Borouge’s revenues top over $5 billion in 9 months
Dr. Sultan bin Ahmed Al Jaber, UAE minister of Industry and Advanced Technology and chairman of Borouge, expressed his satisfaction with Borouge’s exceptional performance in 2023. The company surpassed its peers in the industry, displaying remarkable operational and financial resilience, and solidifying its position as one of the world’s most profitable and innovative producers of polyolefins. Borouge aims to achieve accelerated growth both domestically and internationally.
Resilient business model and Innovation
According to Al Jaber, Borouge 4, a significant strategic growth project, is projected to contribute an estimated annual revenue of around $1.5 – $1.9 billion once the plant is fully operational and production is ramped up. This development will result in a 28 percent increase in the company’s production capacity, establishing Borouge’s Al Ruwais production site as the largest integrated single-site polyolefin complex globally, he said.
Al Jaber further shared that a new expansion project is underway, with plans for the second ethylene unit (EU2) to enhance the overall production of olefins and polyolefins by 230,000 tons. Upon completion in 2028, it is anticipated that this project will contribute approximately $220 to $250 million annually to Borouge’s revenue, he noted.
Al Jaber expressed the company’s international focus on pursuing accelerated growth opportunities worldwide. Specifically, there is an opportunity in the Asia Pacific region that has progressed to the feasibility stage. He expressed confidence that Borouge will sustain its exceptional performance and growth in 2024 and the future. This confidence is based on the company’s resilient business model, dedication to innovation, and the utilization of AI technology, he added.
Optimizing revenues, streamlining costs
For his part, Hazeem Sultan Al Suwaidi, CEO of Borouge highlighted that the substantial $1.3 billion dividend derived from the company’s 2023 earnings is a reflection of the successful execution of their business strategy and their ability to withstand challenges in the market. Borouge’s exceptional performance, when compared to global counterparts, can be attributed to their remarkable operational and commercial excellence, he said.
Furthermore, Al Suwaidi acknowledged the effectiveness of the Value Enhancement Program, which played a crucial role in optimizing revenues and streamlining costs amidst a decline in global prices. In addition, the company intends to explore additional measures to further enhance their competitive cost position. The forthcoming Borouge 4 project will significantly augment their capacity by 28 percent, while simultaneously improving their product portfolio and margin, he added.
Al Suwaidi further emphasized that Borouge’s primary focus remains on sustainable growth and delivering value to stakeholders. Shareholders can anticipate exceptional recurring dividends in the years ahead as a result of these efforts, he noted.
Strong 2023 financial performance
Borouge accomplished a remarkable feat by successfully maneuvering through the low point of the economic cycle and achieving a noteworthy net profit of $1.0 billion in 2023. Also, a significant contribution of $607 million was made by Borouge’s Value Enhance Program, which accounted for 28 percent of the company’s EBITDA in 2023. This stands as the highest impact achieved in a single year among all similar programs announced by industry peers.
The company reached unprecedented sales volumes of 5.1 million tonnes, driven by exceptional production capabilities and leading asset utilization rates within the industry. This resulted in an additional 200,000 tonnes in polyolefins sales, contributing $106 million to the company’s EBITDA in 2023.
Moreover, these initiatives propelled Borouge ahead of its regional and international competitors, boasting one of the industry’s highest EBITDA margins at 38 percent. Through ongoing proactive cost management and adaptability to changing market dynamics, Borouge anticipates sustaining these substantial efficiencies and value in the future.
Sustaining momentum: $1.3 billion dividend for 2024
Borouge has received approval for distributing a total of $1.3 billion in dividends for the year 2023. This includes a final dividend of $650 million, equivalent to 7.94 fils (AED0.0794) per share. Based on the latest share price, this represents a dividend yield of 6.4 percent. Looking ahead to 2024, Borouge plans to pay a cash dividend of $1.3 billion, equivalent to 15.88 fils (AED0.1588) per share.
The integration of digitalization and artificial intelligence (AI) plays a pivotal role in driving operational excellence, fostering innovation, and generating value across Borouge’s operations. These technologies enable the company to achieve efficiency and develop cutting-edge solutions.
Borouge has undertaken various initiatives involving AI and advanced technologies, resulting in a value of $58 million in 2023. The company aims to reach significant milestones that would generate approximately $280 million in value in the coming years.
Through its Innovation Centre, Borouge has successfully introduced eight groundbreaking products in 2023. Notably, one of these innovations is a state-of-the-art solution for gas pipes, recognized worldwide for its exceptional safety and reliability standards.
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