Borouge (BOROUGE) Q1 2026 earnings summary

Executive summary

• Achieved Q1 2026 net profit of $156 million and revenue of $1.2 billion, maintaining high asset utilisation and operational resilience despite significant regional disruptions and logistics challenges.

• Activated contingency logistics plans, rerouting 61% of March production and storing the remainder for Q2 sales.

• Completed Borouge International transactions, forming a leading global polyolefins producer and enhancing scale and technology leadership.

• First production from Borouge 4 achieved, with further units to be commissioned through 2026.

• Signed a 50:50 joint venture agreement for a 1.6 million ton PE project in China, expanding presence in a key growth market.

Financial highlights

• Q1 2026 revenue was $1.2 billion, down 17% year-on-year and 30% quarter-on-quarter, with net profit at $156 million and adjusted EBITDA at $343 million (29% margin).

• Sales volumes totaled 1.09 million tonnes in Q1 2026.

• Operating free cash flow reached $295 million, with cash conversion at 86%.

• Available liquidity stood at $1.2 billion, with net debt at $2.6 billion and net debt/EBITDA at 1.3x.

• Cost of sales reduced 9% year-over-year, but distribution costs rose 39% due to logistics disruptions.

Outlook and guidance

• Full-year 2026 production guidance unchanged, targeting ~105% asset utilisation, assuming no further operational or logistics impacts.

• Q2 sales expected to benefit from Q1 inventory, leveraging high price environment; higher polyolefin prices anticipated to persist through Q2 and potentially beyond.

• Management committed to a minimum annual dividend of 16.2 fils per share through at least 2030.

• Inventory built up in March expected to unwind over the next one to two months as alternative logistics routes are further developed.

• Polyethylene and polypropylene premia guided at ~$200/t and ~$140/t, respectively.