Borealis had record profit of €988 million euros (US$1.08 bln) in 2015, up from €571 mln the prior year, as per a company statement. Business boomed as prices for plastics held up amid a supply shortage, just as raw-material costs dipped thanks to cheaper crude.
Borealis, 64% owned by International Petroleum Investment Co., the sovereign wealth fund of Abu Dhabi, also benefited from the ramp-up in production at its Borouge 3 petrochemical facility in the emirate.
The record result is also a boon for Austrian oil company OMV AG, which owns 36% of Borealis. OMV cut its dividend by 20% last month and Chief Executive Officer Rainer Seele has pledged to sell assets and may cut jobs after revenue in the fourth quarter dropped by one-third. Seele said in an interview in January that OMV has no plans to exit its Borealis stake. Instead, it wants to expand its partnership with IPIC.
Borealis is now planning the next stage of the company’s development, Garrett said. With the US$4 bln Borouge 3 petrochemical facility in Abu Dhabi up and running and increasing production, the task now is to decide on what comes next, whether that’s new plants in Russia and North America where feedstock is cheap, or an acquisition, he said. The company could add another complex, Borouge 4, even though sites take four years to build and two years to get going, he said. Borealis is underleveraged, with a strong balance sheet capable of withstanding the outlay for acquisitions, Tonkens said.