Borealis Announces Record Result for 2014
Borealis AG, Vienna, Austria, announces a net profit of EUR 141 million for the fourth quarter of 2014, compared to EUR 148 million in the same quarter of 2013. For the full year 2014 the company recorded a net profit of EUR 571 million, compared to EUR 423 million in 2013. The improved result over 2013 was driven by overall stronger margins in the olefins and polyolefins business and an improved contribution from Borouge following the startup of the Borouge 3 project. Within Base Chemicals the fertilizer business did not deliver as well as expected due to operational challenges at the newly acquired plants in France.
In the fourth quarter net debt reduced by EUR 255 million largely due to lower working capital needs driven by a lower price environment for polyolefins and by an inventory reduction following the completion of the site turnaround in Burghausen, Germany. In 2014, net debt increased by EUR 28 million. Borealis’ financial position remains strong with a gearing of 40%.
A clear highlight in 2014 for Borouge, Borealis’ joint venture with the Abu Dhabi National Oil Company in Abu Dhabi, UAE, is the successful start-up of the mega project Borouge 3. After the successful start-up of the cracker in June, three out of five polyolefin plants started up in the period until year end. Borouge 3 will deliver an additional 2.5 million t of capacity when fully ramped up, bringing the total Borouge capacity to 4.5 million t, thus making Borouge the biggest integrated polyolefins complex in the world. Borealis and Borouge will then have approximately 8 million tonnes of polyolefin capacity.
“In 2014 we have been working to capture strategic opportunities to remain robust in our traditional European base, giving the company multiple sources of profit while at the same time building Borouge,” comments Mark Garrett, Borealis Chief Executive. “Looking ahead, we will be impacted by negative inventory effects in the first half of 2015 on the back of the rapidly falling monomer prices, and Borouge’s profitability will be lower due to the lower oil price environment. However, a lower cost base will help improve the competitiveness of European producers. Borealis expects to see a solid but lower profitability in 2015 compared to 2014."
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