Full asset availability returned by June while higher logistics costs weighed on marginsLast updated: July 31, 2026 | 08:553 MIN READSuppliedAbu Dhabi: Borouge’s net profit rose 23% quarter on quarter to $191 million in the second quarter of 2026, while the company maintained its annual dividend intention of 16.2 fils per share.Get updated faster and for FREE: Download the Gulf News app now - simply click here.Revenue increased to $1.4 billion from $1.2 billion in the previous quarter, while adjusted earnings before interest, taxes, depreciation and amortisation climbed to $401 million from $343 million.The Abu Dhabi-listed petrochemicals producer sold 0.9 million tonnes during the quarter, exceeding production volumes of 0.7 million tonnes after it shipped additional material from inventory through alternative logistics routes.Average realised prices increased 53% quarter on quarter, supported by a global shortage of polyolefins and record premia for Borouge’s differentiated products.Higher freight and logistics expenses, together with increased propylene feedstock costs, weighed on margins despite the stronger pricing environment.Full asset availability restoredBorouge completed repairs to assets affected by the April 5 incident at its Ruwais complex by the end of June, restoring full production availability across the affected units ahead of schedule.The swift and coordinated response enabled us to implement effective alternative logistics routes, ensuring we shipped all volumes produced, supplemented by additional volumes from inventory, during the quarter, without dependency on the Strait of HormuzHazeem Sultan Al Suwaidi, CEO of BorougeProduction had been temporarily suspended in parts of the complex following the incident. Repair work began after an assessment period and was accelerated throughout the second quarter.The company expects the repairs to result in only a limited increase in maintenance capital expenditure during 2026. Production has remained constrained by feedstock availability since the assets returned to service.Borouge recorded an average utilisation rate of 60% during the quarter. The company said the restoration of asset availability places it in a position to return to higher utilisation rates during the second half, depending on feedstock and logistics availability.Alternative routes maintain customer supplyBorouge developed road, rail and sea routes to maintain deliveries during the regional disruption, allowing it to ship all available production and additional volumes from inventory.The company maintained supply across its core markets despite restrictions affecting regional logistics and maritime traffic.Movement through the Strait of Hormuz, along with the availability of feedstock, will influence the pace of the company’s production and sales recovery during the second half of 2026.Higher prices support earningsThe increase in average realised prices helped Borouge absorb part of the rise in freight, logistics and raw material expenses during the quarter.The stronger pricing environment was driven by reduced global polyolefin supply and continued demand for Borouge’s differentiated products, according to the company.Borouge expects average realised prices to remain elevated in the near term, while logistics expenses are also expected to remain high.Borouge 4 expansion progressesWork on the Borouge 4 expansion continued during the quarter, with the new Cross-Linked Polyethylene plant reaching commercialisation following successful performance testing.The first batch of material has been delivered to customers, while the plant is expected to add 100,000 tonnes of annual capacity and double Borouge’s Cross-Linked Polyethylene output.The wider Borouge 4 development is designed to increase the company’s production capacity by 1.4 million tonnes. Additional plants are expected to begin operations during 2026 and 2027.Dividend intention remains unchangedBorouge maintained its annual dividend intention of 16.2 fils per share following the formation of Borouge International in March.Borouge International combines operations across 30 manufacturing sites with annual production capacity of 13.6 million tonnes, making it the world’s fourth-largest polyolefins producer by nameplate capacity.The combined business recorded adjusted EBITDA of $1.8 billion during the second quarter, supported by stronger pricing across its North American and European operations.A proposed tender offer allowing Borouge shareholders to convert their holdings into Borouge Group International AG shares is expected to take place in 2027, subject to market conditions and approval from the UAE Capital Market Authority.Nivetha Dayanand is Assistant Business Editor at Gulf News, where she spends her days unpacking money, markets, aviation, and the big shifts shaping life in the Gulf. Before returning to Gulf News, she launched Finance Middle East, complete with a podcast and video series.