Share buyback planned
Global petchem demand slowing
Emirati petrochemicals company Borouge will launch a share buyback programme and increase its dividend payout as it pushes ahead with global expansion, despite mounting trade tensions and sluggish demand.
Shareholders at the company’s annual general meeting on Monday approved a final dividend of $650 million for 2024, bringing the full-year total to $1.3 billion, or 15.88 fils per share (100 fils = 1 AED), Borouge said in a statement on Tuesday.
The board of directors also backed a plan to repurchase up to 2.5 percent of the company’s issued share capital via open-market transactions.
The company has committed to a minimum annual dividend of 16.2 fils per share through 2030.
Borouge, backed by Abu Dhabi National Oil Company (Adnoc) and Austria’s OMV, is proceeding with the creation of Borouge Group International — a $60 billion polyolefins player formed through the merger of Borouge and OMV’s Borealis unit. Polyolefins are common precursors for plastics, films and lubricants.
The group has agreed to acquire Canada’s Nova Chemicals for $13.4 billion, a deal expected to nearly triple annual production capacity to 13.6 million tonnes of polyolefins and generate $500 million in annual cost savings.
OMV said on Tuesday that the merger is already contributing to earnings. The Austrian energy group expects a mid-double-digit million euro increase in the first quarter, compared with the previous three months. A temporary halt in depreciation is also likely to add about €140 million ($153 million) per quarter, it said.
Petrochemical producers face increasing pressure from softening global demand and new trade frictions. Donald Trump’s recent tariffs on Chinese exports have fed fears of a broader trade war, with potential knock-on effects for industrial output and petrochemical consumption.
While oil and gas exports remain exempt, analysts say downstream producers could be hit by rising feedstock costs and margin compression.
Borouge shares have fallen nearly 5 percent over the past month but edged up on Tuesday to AED2.48 on the Abu Dhabi Securities Exchange.
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