Borouge announced today that it is seeking shareholder approval for a share buyback and the final 2024 dividend at its annual general meeting on April 7, providing the option for the company to purchase up to 2.5 percent of its issued share capital.
The proposal comes after the petrochemicals company delivered outstanding 2024 financial results, achieving a 24 percent year-on-year increase in net profit to $1.24 billion and superior free cash flow generation of $1.6 billion, driven by record production and sales volumes.
“Borouge’s share buyback to repurchase shares at an attractive valuation underscores our commitment to enhancing shareholder value. With one of the highest dividend yields on the ADX, this buyback highlights our strong financial position and ability to seize value-accretive opportunities,” stated Hazeem Sultan Al Suwaidi, CEO of Borouge.
Share buyback through open market transactions
The proposed share buyback underscores Borouge’s confidence in its long-term growth prospects and commitment to delivering superior returns to its shareholders through multiple avenues and underpinned by its exceptional operational and financial performance.
“Backed by a robust balance sheet and strong cash flow, we remain well-positioned to maximize returns while advancing the Borouge 4 expansion and other strategic initiatives,” added Al Suwaidi.
Upon shareholder and regulatory approvals, the share buyback would be conducted through open market transactions in accordance with ADX regulations, with the number of shares repurchased dependent on market conditions and other factors.
The share buyback, if approved, will be overseen and managed by the Board of Directors, and may be modified or discontinued at any time, with the 2.5 percent shares constituting the approved ceiling for the repurchase.
Dividend to be distributed on April 28
In addition to the share buyback proposal, Borouge’s shareholders will vote to approve the final 2024 dividends of 7.94 fils per share, which will be distributed on April 28, 2025, bringing its total 2024 dividend payout to $1.3 billion equivalent to 15.88 fils per share with an attractive annual dividend yield.
Last week, the company announced that its shareholders are anticipated to approve a cash dividend of $653.5 million for the second half of 2024 during the upcoming annual general meeting. Investors looking to qualify for the final dividend must hold Borouge shares by April 15, 2025.
“This is an exciting time for Borouge shareholders, as the company continues to deliver strong dividends, underscoring our commitment to driving value for our shareholders. With a solid business model and continuous innovation, Borouge remains a strong contender for investors looking for value opportunities,” added Al Suwaidi.
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Merger to propel Borouge’s growth trajectory
In addition to its robust dividend profile, Borouge’s growth trajectory is set to accelerate following the recent merger of Borouge and OMV’s Borealis, forming Borouge Group International, along with the acquisition of NOVA Chemicals. This consolidation will establish the world’s fourth-largest polyolefins company, valued at over $59.9 billion, significantly enhancing Borouge’s global standing.
The newly established Borouge Group International is expected to enjoy a higher dividend payout, expanded market access, advanced technological capabilities, and complementary product lines.
With commercial and manufacturing operations across North America, Europe, Asia, the Middle East, and Africa, Borouge Group International’s presence in the global petrochemicals industry is poised to strengthen, paving the way for further growth and value creation.
