Borouge

1. Company Overview & Earnings Context

Borouge PLC is one of the UAE's leading petrochemicals companies, producing polyethylene and polypropylene solutions for infrastructure, energy, mobility, healthcare and advanced packaging markets across the Middle East, Asia and other international markets. The company is jointly backed by ADNOC and OMV and is listed on the Abu Dhabi Securities Exchange.

For H1 2026, Borouge reported lower earnings compared to the previous year as operations were impacted by the April 2026 incident at its Ruwais complex and the temporary closure of the Strait of Hormuz. Despite lower production and sales volumes, the company benefited from significantly higher selling prices, record product premia, resilient customer demand and the successful restoration of full production capacity by the end of June.

2. Financial Performance Snapshot

• Revenue: US$2.58 Billion

• Gross Profit: US$949.6 Million

• Operating Profit: US$537.6 Million

• Net Finance Costs: US$74.9 Million

• Profit Before Tax: US$462.7 Million

• Income Tax Expense: US$116.1 Million

• Net Profit: US$346.6 Million

• Basic & Diluted EPS: US$0.01

Compared with H1 2025:

• Revenue decreased 5.3% from US$2.72 billion to US$2.58 billion.

• Gross profit declined 6.3% from US$1.01 billion to US$949.6 million.

• Operating profit decreased 26.5% from US$731.7 million to US$537.6 million.

• Profit before tax declined 29.9% from US$660.1 million to US$462.7 million.

• Net profit decreased 26.9% from US$474.2 million to US$346.6 million.

• Earnings per share declined from US$0.02 to US$0.01.

3. Operational Highlights & Key Metrics

• Total Assets: US$8.60 Billion

• Total Equity: US$3.75 Billion

• Cash & Cash Equivalents: US$194.5 Million

• Property, Plant & Equipment: US$6.05 Billion

• Sales Volume: 1,958 kt (-18% YoY)

• Production Volume: 1,929 kt (-12% YoY)

• Average Selling Price: US$1,240 per tonne (+17% YoY)

• Adjusted EBITDA: US$744 Million

• Adjusted EBITDA Margin: 29%

• Net Debt: US$3.28 Billion

• Polyethylene Premium: US$300 per tonne

• Polypropylene Premium: US$187 per tonne

4. Key Performance Drivers

Borouge's H1 2026 performance was primarily impacted by temporary operational disruptions following the April incident at the Ruwais complex and logistics challenges arising from the closure of the Strait of Hormuz, which reduced production and sales volumes. However, these headwinds were partially offset by significantly higher average selling prices, record polyethylene and polypropylene premia, resilient customer demand and insurance claim proceeds recognised during the period. The company also completed repairs at the Ruwais complex and restored full production availability by the end of June while progressing the Borouge 4 expansion project.

5. Outlook & Forward Guidance

Borouge expects production to normalise following the successful restoration of operations at the Ruwais complex. The company continues to ramp up the Borouge 4 facilities during 2026, subject to feedstock availability, while maintenance capital expenditure is expected to remain below US$300 million. Management also expects the differentiated product portfolio and premium pricing strategy to continue supporting long-term growth.

6. Investor Takeaway

Borouge delivered a resilient H1 2026 performance despite significant operational disruptions during the second quarter. While lower production reduced profitability, the company demonstrated strong pricing power, maintained healthy margins, restored full production by quarter-end and continued advancing its strategic Borouge 4 expansion, positioning it for improved performance in the second half of the year.