Q2 2026 Borouge Plc Earnings Call Transcript
Key Points
- Borouge PLC (ADX:BOROUGE) successfully restored full production availability by the end of June, ahead of schedule, following the April 5 asset damage.
- The company achieved record price premia for both polyethylene and polypropylene, driving a 53% quarter-on-quarter increase in average selling prices.
- Adjusted EBITDA increased 17% quarter-on-quarter to $401 million, with net profit up 23% to $191 million, despite a challenging operating environment.
- Borouge PLC (ADX:BOROUGE) demonstrated operational resilience by implementing alternative logistics routes independent of the Strait of Hormuz, ensuring supply continuity and customer commitments.
- The company maintained a strong cash conversion of 71% in Q2, with adjusted operating free cash flow of $287 million, and reaffirmed its minimum dividend of 16.2 fils per share, offering a 6.7% yield.
- Commercial production from the XLPE 2 unit at Borouge 4 has started, with initial volumes delivered to customers, and the remaining units are on schedule for H2 2026.
- Polyethylene utilization dropped to 48% and polypropylene to 71% in Q2 due to the asset damage and regional disruption, significantly impacting production volumes.
- Higher feedstock costs, particularly for propylene, and increased freight and logistics expenses weighed on profitability, with EBITDA margin down 5 percentage points year-on-year.
- The company faces ongoing uncertainty regarding the Strait of Hormuz, with utilization rates in July fluctuating between 60% and 70%, and future production dependent on geopolitical developments.
- Net debt increased to $3.3 billion from $2.7 billion at the end of 2025, partly due to elevated CapEx for repair works and a net working capital outflow of $256 million.
- Elevated price premia are not considered structural and are expected to normalize, with market prices already moderating in July, potentially impacting future revenue.
- The shift in sales mix from infrastructure to consumer solutions in Q2 reflects project delays, and the company expects this to revert only as market conditions stabilize.
Good afternoon, and thank you for joining us today for Borougeâs second-quarter and six months 2026 results call. My name is Chris Bucknall, Vice President of Investor Relations. I am pleased to be joined today by our senior management team, Chief Executive Officer, Hazeem Sultan Al Suwaidi; Chief Operating Officer, Salem Al Busaeedi; Chief Marketing Officer, Roland Janssen; and Chief Financial Officer, Siegfried Wengler.
Todayâs call will begin with a presentation from the management team covering our second quarter performance, the operating environment, and our outlook. Weâll open the lines for questions. A copy of todayâs presentation is available on the investor relations section of our website.
With that, Iâll hand over to our CEO, Hazeem.
Thank you all for joining us today. Q2 was delivered in a highly challenging operating environment, and our performance reflects the resilience of the business, the strength of
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