Borouge reports $109 million Q3 profit as sales volumes rise 22%

Production recovery continues into October

Higher sales volumes offset lower average selling prices, leaving quarterly revenue 3% above the second-quarter level. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $279 million.

Plant utilization averaged 76% in the third quarter, compared with 60% in the second, and reached about 90% in October. Borouge attributed the recovery to better ethane availability, which allowed it to restart more capacity. Quarterly production rose from 720,000 to 950,000 metric tons.

Sales increased from 870,000 to 1.07 million metric tons, supported in part by additional exports to Asia. Borouge said external factors had constrained production; its assets remained technically available throughout the quarter.

The company used alternative shipping routes to deliver all available output without relying on the Strait of Hormuz. Regional conditions nevertheless continued to weigh on freight and logistics costs. CEO Hazeem Sultan Al Suwaidi described the quarter as an exceptional period marked by external disruption.

Better pricing supports fourth-quarter expectations

Borouge's average realized selling prices were 22% higher than a year earlier but fell from the second quarter as global polyolefin benchmarks retreated from their earlier peak. Its polyethylene premium was $301 per metric ton and its polypropylene premium was $156 per metric ton, both exceeding company guidance.

Demand for specialized polyolefins remained resilient, according to Borouge. Infrastructure and energy solutions represented 39% of sales.

By October, global polyolefin benchmark prices were above third-quarter levels, the company said in its results announcement. The cited benchmarks are HDPE Blow Molding NEA CFR and PP Raffia NEA CFR prices.

With feedstock availability, production volumes and pricing improving, Borouge expects the fourth quarter to be its strongest of fiscal 2026, with a substantial increase in EBITDA despite persistently high logistics costs. "We expect a substantial improvement in profitability in the fourth quarter," Al Suwaidi said. The forecast assumes no material deterioration in regional operating conditions.

Borouge 4 reaches a plant milestone

Borouge said it had finished mechanical construction and commissioning of PE7, the first of two Borstar 3G polyethylene units in its Borouge 4 expansion. PE7 adds 700,000 metric tons of capacity; together, the two units are expected to add 1.4 million metric tons of polyethylene capacity annually.

The new cross-linked polyethylene (XLPE) plant also continued to increase production, with third-quarter sales reaching 20,000 metric tons. It provides up to 100,000 metric tons of annual capacity, doubling Borouge's XLPE output. The company expects that capacity to serve growing demand for electricity transmission and data center infrastructure in Asia and the Middle East.

OMV's 2025 annual report put the cost of the Ruwais-based Borouge 4 facility at $6.2 billion. Alongside the two polyethylene units and XLPE plant, the project includes a 1.5 million-metric-ton ethane-based steam cracker and a 1-Hexene unit. At the time of that report, construction was on schedule and about 90% complete.

The report also detailed a change in the project's ownership ahead of the formation of Borouge Group International. Borealis transferred its 40% participation to OMV and ADNOC in a transaction completed in October 2025, leaving OMV with 30% and ADNOC with 70%.

For context, OMV's report lists Borouge's existing ethane-based steam cracker capacity at 3.6 million metric tons a year. An olefin conversion unit can convert about 0.8 million metric tons of ethylene into propylene annually. Existing polyolefin plants have combined annual capacity of 5 million metric tons: 2.7 million of polyethylene, 2.2 million of polypropylene and 0.1 million of other products.

Dividend plan remains unchanged

After paying an interim dividend of 8.1 fils per share in September 2026, Borouge reaffirmed its intention to pay 16.2 fils per share for the full year. That planned payout equates to a 7.2% yield using the October 28 closing share price. Its share buyback program also continued.

Founded in 1998 by ADNOC and Borealis, Borouge listed on the Abu Dhabi Securities Exchange in June 2022, floating 10% of its issued share capital. The company employs more than 2,900 people and serves customers in over 90 countries across Asia, the Middle East and Africa, according to its third-quarter release and OMV's 2025 annual report.

International integration and a planned 2027 listing

Borouge International, formed in March 2026, has held a 90% stake in Borouge Plc since that month, according to Borouge's third-quarter results announcement. The company says the international group is the world's largest pure-play polyolefins producer by nameplate capacity, with annual capacity of 13.6 million metric tons at 30 manufacturing sites.

The group reported third-quarter sales growth of 11% and an EBITDA margin of 18.4%. Integration work has identified operational synergies worth more than $500 million in annual run-rate EBITDA, with about 75% targeted for realization within three years of integration completion. Synergies already achieved amount to an annualized run-rate of $200 million.

OMV's 2025 annual report describes Borouge Group International as the entity combining OMV's and ADNOC's shareholdings in Borealis and Borouge, with equal ownership and joint control by OMV and ADNOC. Under the agreement described in that report, the entity will acquire North American polyolefin producer NOVA Chemicals upon completion of the combination, at an enterprise value of $13.4 billion.

Borouge is targeting 2027 for a proposed share exchange offer to Borouge Plc shareholders, followed by the listing of Borouge Group International AG on the Abu Dhabi Securities Exchange and a capital raise. The company says the transaction would give shareholders exposure to a larger polyolefins producer operating across more geographies. The timetable remains subject to regulatory approvals and market conditions.