Borealis swing to Q4 net loss on inventory impairment; full year profit down 55%

12-Mar-09

Borealis witnessed a net loss of EUR 122 mln in the fourth quarter of 2008 as against a net profit of EUR 58 mln in the same period last year, mainly due to inventory impairment at year-end led by the drastic drop in polymer prices. Sales revenue for the three month period declined to EUR 1346 mln against EUR 1610 mln in the comparable period last year. For full year 2008, the company's net profit declined 55% YOY to stand at EUR 239 mln particularly highlighting a difficult last quarter led by decline in feedstock prices and demand for polymers across the world. Net interest debt for the year increased by EUR 453 mln due to its ongoing growth investments in Europe, Middle East and Asia. Borealis Chief Executive Mark Garrett said, "We know the next two years will be very difficult and volatility in the financial markets and the real economy will continue. We have taken steps to protect our liquidity while ensuring our counter-cyclical investments in Stenungsund and Abu Dhabi are completed." In Europe, the company inaugurated the expanded Borstar® second generation PP plant in Burghausen, Germany, and kicked off construction at the new 350,000 tpa PE plant in Stenungsund, Sweden which is planned for start-up at the end of 2009. Further, the company also celebrated the groundbreaking for the expansion of its Innovation Headquarters in Linz, Austria with an investment of EUR 50 mln. In the Middle East, Borouge, Borealis' joint venture with the Abu Dhabi National Oil Company (ADNOC), announced the Borouge 2 project, which will expand production capacity from 600,000 tpa of polyethylene to 2 mln tpa of both polyethylene and polypropylene by 2010 and start a feasibility study for Borouge 3 to add an additional 2.5 mln tpa of capacity. Borealis is also further developing its Base Chemicals business by actively participating in the development of first complex in the new Chemicals Industrial City (Chemaweyaat) to be located in Abu Dhabi, UAE which it says will be the largest and most integrated of its kind in the world. The company also celebrated the groundbreaking for the expansion of its Innovation Headquarters in Linz, Austria, supporting its commitment to Value Creation through Innovation.