Borouge Q3 profit falls to $109m as volumes rebound 22%

Borouge, the ADNOC-backed petrochemicals company listed in Abu Dhabi, reported third-quarter net profit of AED399m ($109m) on Thursday, 29 October, as lower polyolefin prices outweighed a 22% rebound in sales volumes.

The Borouge Q3 profit compares with $191m achieved in the second quarter, according to Oil & Gas Middle East. Revenue for the three months to 30 September amounted to AED5.3bn ($1.4bn), which was 3% higher than the previous quarter and broadly flat year on year.

Adjusted EBITDA came in at AED1.02bn ($279m), equal to a margin of 19%. Management said on the earnings call that this was down 30% on the quarter and 51% on a year earlier, as the margin contracted from 39% in the third quarter of 2025.

Borouge Q3 profit hit by prices as output recovers

Average realised selling prices were 22% higher than a year ago but 19% lower than in the second quarter. The decline reflected lower global polyolefin benchmarks following a spike in the second quarter. Polyethylene traded at a premium of $301 (AED1,105) per tonne to benchmarks, while polypropylene was $156 (AED573) per tonne above benchmarks, both well ahead of guidance.

Sales volumes rose to 1.07 million tonnes from 0.87 million tonnes in the second quarter. The rise was supported by increased exports into Asia. Production increased to 0.95 million tonnes from 0.72 million tonnes.

Average asset utilisation increased to 76% for the quarter from 60% in the second quarter, the company said, reaching 90% in October. Borouge shipped all of its available production and did not need to use the Strait of Hormuz, it added. Its assets also remained fully available during the period.

Infrastructure and energy solutions accounted for 39% of sales. The company generated adjusted operating free cash flow of $244m, equivalent to 88% cash conversion.

Dividend held and fourth-quarter outlook

Despite the weaker Borouge Q3 profit, the dividend plan is unchanged. Borouge paid an interim dividend of 8.1 fils a share in September and confirmed its intention to pay 16.2 fils for the full year, giving a yield of 7.2% on the closing share price on 28 October. The buyback programme remains in place.

Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge Plc, said the company expects “a substantial improvement in profitability in the fourth quarter”. Management expects the final three months of 2026 to be the strongest quarter of the year, driven by higher production and better pricing, even as logistics costs stay elevated.

Siegfried Wengler, Chief Financial Officer, told analysts: “Overall, we see a more constructive pricing environment heading into quarter 4.” Ethane feedstock availability was about 90% in September and remained at that level in October, management said.

Net debt was $3.4bn at the end of September, compared with $2.7bn at the end of 2025, the company said on its earnings call. Adjusted EBITDA for the first nine months of 2026 was approximately $1bn.

Borouge 4 and the Borouge Group International plan

Expansion at the company’s Ruwais complex continues. The 700,000-tonne-a-year PE7 polyethylene unit at Borouge 4 has achieved mechanical completion and is now in commissioning. It is the first of two units that will add a combined 1.4 million tonnes a year of polyethylene capacity.

On a group basis, Borouge International sales were up 11% and the EBITDA margin reached 18.4%. Integration synergies have reached an annual run rate of AED735m ($200m), against a target of more than $500m.

The planned tender offer to exchange Borouge Plc shares for shares in Borouge Group International AG, followed by a listing on the Abu Dhabi Securities Exchange and a capital raise, is now targeted for 2027, subject to market conditions and regulatory approvals.

The update follows other third-quarter reports from ADNOC’s listed companies, including ADNOC Drilling, which posted nine-month profit of $1.07bn and approved a $350m payout. Further details are available on the Borouge investor relations page.

For investors tracking the ADNOC petrochemicals business and the wider Gulf earnings season, the Borouge results show a company that kept supply flowing to customers through a disrupted quarter while absorbing weaker prices. The test for the fourth quarter is whether higher utilisation translates into the earnings recovery management has promised.