Borouge shareholders approve $1.3 billion dividend for 2023

Borouge Plc, a leading petrochemicals company that provides innovative and differentiated polyolefins solutions, on Friday confirmed shareholder approval of a $650 million (7.94 fils/share) final 2023 cash dividend at its Annual General Meeting (AGM).

The company said in a statement that its shareholders had also confirmed the intention to pay a total dividend of $1.3 billion for 2024, reinforcing its commitment to shareholder value and demonstrating its confidence and ability in generating earnings and profits even in the face of challenging market conditions.

Outperforming industry peers

“In 2023, Borouge significantly outperformed its industry peers, demonstrating remarkable operational and financial resilience and reinforcing its position as one of the world’s most profitable and innovative polyolefin producers,” H.E. Dr. Sultan Al Jaber, Chairman of Borouge, said in a statement.

“Borouge is pursuing accelerated growth domestically and internationally. Locally, Borouge 4, a major strategic growth project, is expected to add approximately $1.5 - $1.9 billion to revenue annually after recontribution and full production ramp-up of the plant. Borouge 4 will boost the company’s production capacity by 28%, making Borouge’s Al Ruwais production site the world’s largest integrated single-site polyolefin complex,” he added.

H.E. Dr. Al Jaber also announced a new expansion project.

“Our second ethylene unit (EU2) is advancing plans to increase our total production of olefins and polyolefins by 230,000 tonne after project completion in 2028, and is expected to contribute approximately $ 220 to 250 million to Borouge’s revenue per year,” he said.

“Internationally, the company is pursuing accelerated global growth opportunities, including an opportunity in the Asia Pacific region that has reached feasibility stage. I am confident that Borouge will continue to deliver unparalleled performance and growth in 2024 and beyond, supported by its robust business model and focus on innovation and AI technology,” H.E. Dr. Al Jaber said.

Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, commented: “The significant $1.3 billion dividend from our 2023 earnings reflects the success of our business strategy and our operational resilience in a challenging market environment. Our outstanding operational and commercial excellence yielded exceptional performance compared with our global peers. This was supported by a highly effective Value Enhancement Programme, which enabled us to successfully optimise revenues and streamline costs amid softening prices globally. We will  explore in parallel further levers to enhance our competitive cost position. Once operational, Borouge 4 will significantly increase our capacity by 28% while enhancing our product portfolio and margin. Our focus remains on sustainable growth and delivering value, with our shareholders set to profit from exceptional recurring dividends in the years to come.”

Strong 2023 financial performance

Borouge successfully navigated the bottom of the cycle and delivered a significant $1.0 billion in net profit in 2023. Borouge’s $607 million Value Enhance Programme contributed a significant 28% to 2023 EBITDA, the highest total impact in any single year of any announced programmes by peers. The company achieved record sales volumes of 5.1 million tonnes, driven by exceptional production and industry-leading asset utilisation rates, adding approximately 200,000 tonnes in polyolefins sales which contributed $106 million EBITDA in 2023.

As a result of these initiatives, Borouge outperformed its regional and international peers with one of the highest EBITDA margins in the industry at 38%. By continuing to actively manage costs and adapt to evolving market dynamics, Borouge expects to sustain these substantial efficiencies and value.

Maintaining momentum: $1.3 billion dividend in 2024

Borouge will distribute a total of $1.3 billion in dividends for 2023, following AGM approval of final dividend of $650 million, equivalent to 7.94 fils (AED0.0794) per share, representing a 6.4% dividend yield based on the latest share price[1]. Looking ahead, Borouge intends to pay a $1.3 billion cash dividend for the full year 2024, equivalent to 15.88 fils (AED0.1588) per share. With exceptional cash generation and extremely strong cash conversion and a very healthy balance sheet of more than $3.97 billion in retained earnings at the end 2023, Borouge shareholders can expect a secure and very substantial dividend.