Borealis announces a net profit of €151 million (approximately £133.8 million) for the first quarter of 2020, compared to €200 million (approximately £176.9 million) in the same quarter of 2019.
The contribution from Borouge in the first quarter of 2020 deteriorated versus the same period in 2019, as an already low polyolefin price environment in Asia was further impacted by the coronavirus pandemic and falling oil prices.
Borealis believes the drop in profit compared to the first quarter of 2019 was also due to lower European integrated polyolefin results. At the same time, the contribution from the Fertilizer business improved compared to the first quarter of 2019 due to increased sales volumes and lower gas prices. In the first quarter of 2020, net debt increased by €116 million (approximately £102.6 million), due largely to the payment of a €300 million (approximately £265 million) final dividend over 2019 to Borealis shareholders.
The cash inflow from the business result and dividends from Borouge enabled Borealis to maintain a strong financial position, with a gearing of 26 per cent at the end of the first quarter of 2020.
“Towards the end of the first quarter of 2020, the European polyolefins industry environment began to feel the effects of the COVID-19 pandemic and lower oil prices. For the second quarter in particular we expect a challenging market environment due to the continued negative impact of both COVID-19 and record low oil prices,” comments Alfred Stern, Borealis CEO.
Borealis CEO Alfred Stern
“At the same time, demand remains solid in many product segments. The current crisis demonstrates just how critical our products are – not only for numerous industry sectors, but for human health and safety, too. At this point in time, all our production locations and warehouses are maintaining operations to secure supply of these products.”
“To ensure that we maintain our strong financial position despite the uncertain outlook for the global economy in the mid-term, Borealis has launched a resilience programme with focus on reduction of cost and investments and builds on previously existing initiatives. Borealis is well positioned to remain a strong partner for our customers and all other stakeholders during these exceptionally challenging times.”
