Borealis, leading provider of innovative, value creating plastics solutions, has announced a net profit of EUR 71 mln for the second quarter of 2008, a 48% decrease compared to the EUR 137 mln of the second quarter of the previous year. The net profit for the first half-year 2008 totalled EUR 201 mln, a 20% drop from EUR 250 mln recorded in the first half of 2007. Net interest-bearing debt increased by EUR 152 mln during the second quarter and by EUR 346 mln in the first half-year. As a consequence the gearing ratio rose from 36% in the first quarter to 41% in the second. The primary reason for this increase was the effect of higher input costs on the company's working capital.
The company's results were impacted by increased global crude oil and naphtha prices. On the other hand, Borealis benefited from continued contributions from the newly formed Base Chemicals business, in particular from plant nutrients. Borouge, Borealis' joint venture with the Abu Dhabi National Oil Company (ADNOC), also contributed favourably.
The second quarter saw the groundbreaking of the EUR 50 mln expansion of Borealis' Innovation Headquarters in Linz, Austria. A further investment in a new research & development tool, a parallel pressure reactor, at the Borealis Innovation Centre in Porvoo, Finland, enables researchers to develop innovations faster and reduce the related time to market. These two investments underline Borealis' strong commitment to providing customers with infrastructure, automotive and advanced packaging solutions.
The major investment programme at Borouge 2 in Ruwais, Abu Dhabi, is proceeding according to plan with more than 7,000 persons currently working on the construction site. The new 350,000 tpa low density polyethylene plant in Stenungsund, Sweden, is also on schedule for completion in the second half of 2009.
"We have said before that we anticipate ongoing volatility and a softening of the markets and have been proactively preparing ourselves, especially by improving our cost competitiveness", comments Borealis Chief Executive Mark Garret. "As a result we are in a sound financial position to pursue our strategy based on value creation through innovation and to continue our ambitious
investment projects in the Middle East."
Company Press Release