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August 22, 2005
Plastics Solutions Provider
Delivers Solid Results
Seattle, WA, USA--(Jobwerx News)--Borealis, a leading innovative provider
of plastics solutions, announces second quarter earnings for 2005.
Borealis, a leading, innovative provider of plastics solutions based on
polyethylene (PE) and polypropylene (PP), today announced solid financial
results for the second quarter, posting a net profit of EUR 51 million.
This result constitutes a 50% increase on the EUR 34 million achieved
in the same quarter last year. Lower industry margins reduced net profit
by EUR 33 million compared to the first quarter of 2005.
Borealis is a technology leader shaping our daily lives through products
that form the basis of next generation innovation and creative development
in plastics.
The second quarter was characterised by rising oil and feedstock prices
combined with low demand and sharply dropping polyolefin prices in Europe.
Commenting on the result, Chief Executive John Taylor said:
“Despite the tough business climate in Europe we continue to deliver solid
results, a testimony to our successful transformation over the past four
years, and confirmation that our value creation strategy targeting key
market segments remains the right one. The continued implementation of
our strategy based on innovation, in conjunction with our recent expansion
in the Middle East, will be further underpinned by the foreseen change
in our ownership structure.”
Borealis recently announced a change in its shareholding structure when
the International Petroleum Investment Company (IPIC) of Abu Dhabi and
OMV AG of Austria announced their agreement to purchase Statoil’s 50%
shareholding in Borealis A/S. As a result, the new Borealis ownership
will be 65% IPIC and 35% OMV, with a closing of the transaction expected
during the fourth quarter, subject to regulatory approvals being received.
Borouge, Borealis’ joint venture with the Abu Dhabi National Oil Company,
continued to improve its performance following the first quarter expansion
of its Borstar® polyethylene (PE) capacity from 450,000 to 600,000 tonnes
per year. With its successful track record and in response to growing
market needs in the Middle East and Asia, Borouge progressed a proposed
major expansion in Abu Dhabi by awarding the Project Management and Financial
Advisor contracts to Foster Wheeler and HSBC respectively. This expansion
will more than triple current polyolefin production capacity in Ruwais,
Abu Dhabi to 2 million tonnes per year.
s’ net interest-bearing debt grew by EUR 13 million in the
second quarter, while gearing dropped slightly to 43%. The increase in
net debt was a result of an increase in working capital as Borealis built
additional inventory ahead of planned maintenance stops in the second
half of the year. Cash flow was also influenced by further progress along
Borealis’ European capacity expansion programme, which includes construction
of a new 350,000 tonnes Borstar PE plant in Austria to be started up in
the fourth quarter.
Innovation continues to be central to Borealis’s strategy, several new
products were launched in the second quarter including; • Daploy™ High
Melt Strength polypropylene (PP) which allows for the first time use of
PP in very low density soft foams for applications such as automotive
seating, sport shoe construction, and protective packaging. • Borecene
Compact™ black and natural powder grades that offer exceptional flow characteristics
to give sharp control of wall thickness in very intricate shapes such
as automotive diesel tanks. • Borflow™ very high meltflow PP homopolymers
set a new standard for meltblown, nonwoven applications such as diapers
and medical gowns with improved barrier performance. The meltflow performance
allows the production of a very uniform non-woven material.
Commenting on the outlook for the third quarter, Chief Executive John
Taylor stated:
“During the early part of the third quarter, we experienced further pressure
on industry margins in Europe, which will have an impact on our results
for the quarter. However, I am confident that it is a temporary situation
and that margins will be restored driven by healthier market conditions
in the Middle East and Asia.”
Borouge is a Borealis joint venture with the Abu Dhabi National Oil Company
and is the exclusive sales channel for Borealis products in the Middle
East and Asia Pacific in addition to marketing its own Borstar® enhanced
polyethylene produced in Ruwais, Abu Dhabi, in the UAE.
Borstar is the proprietary process technology supporting differentiated
PE and PP products and is a registered trademark of Borealis A/S, Denmark.
y, Borecene Compact and Borflow are trademarks of Borealis A/S, Denmark.
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