Borouge Q3 Net Profit Falls 63% as Prices Weigh and Freight Costs Rise
Lower polyolefin prices and higher shipping costs pulled quarterly profit to $109 million, even as sales volumes rose 22% from the prior quarter.
Borouge reported a third-quarter net profit of $109 million, down 63.1% from $294.5 million a year earlier, as weaker selling prices and costlier shipping offset a jump in volumes.
Revenue for the quarter came to $1.4 billion, a decline of 0.2% year on year. The UAE-based petrochemical producer published the figures on a Thursday.
Higher sales volumes partly cushioned the fall in average selling prices. Sales reached 1.07 million tonnes, up 22% from 870,000 tonnes in the second quarter. Production climbed to 950,000 tonnes from 720,000 tonnes over the same comparison.
Average capacity utilization rose to 76% from 60%, helped by better availability of feedstock. Adjusted EBITDA for the quarter was $279 million.
For the first nine months of 2026, net profit was $455.15 million, 40.7% below the $768.77 million recorded a year earlier. Revenue fell 3.6% to $4.02 billion.
Supply kept moving past Hormuz
Borouge shipped all of its available production through alternative logistics routes that bypass the Strait of Hormuz, keeping supply moving through regional disruption. Lower global polyolefin benchmarks, elevated freight costs and higher propylene feedstock prices all weighed on profitability.
Chief executive Hazem Sultan Al Suwaidi said the company raised both production and sales while maintaining supply continuity. He pointed to improved feedstock availability, higher output and stronger prices as support for the fourth-quarter outlook.
Fourth-quarter outlook
Borouge expects the fourth quarter to be its strongest of 2026. Capacity utilization reached 90% in October as feedstock availability improved, and global polyolefin benchmark prices have climbed above their third-quarter levels. Adjusted EBITDA should benefit from higher production and better pricing, though logistics costs are expected to stay elevated.
Dividend held, expansions advance
The company reaffirmed a full-year dividend target of $0.04 per share, or 16.2 fils, after paying an interim $0.02 per share — 8.1 fils — for the first half. That payout implies a 7.2% yield based on the October 28 closing price. Borouge is also continuing its share buyback.
Trial operations have begun at the new PE7 plant, which carries 700,000 tonnes of annual capacity, while the Borouge 4 expansion is expected to add 1.4 million tonnes of yearly polyethylene output. The XLPE plant sold 20,000 tonnes in the quarter against 100,000 tonnes of annual capacity.
Share swap toward a group listing
Borouge is targeting a proposed share swap in 2027 that would let shareholders exchange their holdings for shares in Borouge International, clearing a route to a group listing on the Abu Dhabi Securities Exchange and a capital increase. Both steps depend on market conditions and regulatory approvals.
Borouge International was formed in March 2026 by combining Borouge, Borealis and Nova Chemicals. It operates 30 industrial sites with 13.6 million tonnes of annual nameplate capacity and targets more than $500 million in yearly adjusted EBITDA synergies, about 75% of which should arrive within three years of completing integration. Annualized savings have reached roughly $200 million.
Borouge placed 25th on a 2026 ranking of the Middle East's 100 most valuable companies. Roland Janssen, senior vice president of global sales and marketing at Borouge International, was named among the region's most influential chief marketing officers.
The gap between volume and profit is the story of the quarter. Borouge sold 22% more material than in the previous three months and still earned 63% less than a year ago, because the level of polyolefin benchmarks rather than tonnes leaving its plants sets the earnings base. October's 90% utilization and firmer prices point to a better close, but the freight bill is not shrinking.
