Borealis reported Monday a 72% jump in fourth-quarter net profit to Eur100 million ($133 million) from Eur58 million a year earlier, but gave a downbeat view on the 2013 outlook for its European polyolefins business.
Sales grew to Eur1.87 billion in Q4 from Eur1.59 billion a year ago, thanks to its strong fertilizer business and increased contribution from the UAE-based Borouge, a joint venture between Borealis and the Abu Dhabi National Oil Co.
In full-year 2012, net profit fell to Eur480 million from Eur507 million in the previous year, owing to weaker margins in the polyolefins business in crisis-hit Europe, which offset the increase in sales to Eur7.54 billion from Eur7.1 billion.
In a statement Borealis described 2012 as "a year marked by high volatility", adding that the poor polyolefins market in Europe dragged margins, particularly in the second half.
Looking ahead, CEO Mark Garrett said: "2012 showed that the polyolefins industry in Europe is still suffering from low growth and margins, and it is likely that this will not improve materially for some time."
"We will further optimise our European operations in order to be sustainably profitable to grow in these volatile markets."
A breakdown of the performance of the company's base chemicals, which covered the fertilizer segment, and polyolefins businesses were not provided.
ON ACQUISITION MODE DESPITE TOUGH MARKET
Despite the tough market conditions, Borealis said it is proceeding with acquisitions as a way to grow its business, particularly in the fertilizer division.
It completed the purchase of French fertilizer group PEC-Rhin at the start of 2013. PEC-Rhin is now known as Borealis Ottmarsheim.
The company also made a firm offer on February 6 to acquire GPN and a 57% stake in Rosier from French oil group Total. Both firms are suppliers of fertilizers in France and the Benelux region. The transactions are awaiting the approval of anti-trust authorities.
Borealis in November also reached an agreement to acquire DEXPlastomers, jointly owned by DSM and ExxonMobil. The purchase is subject to customary approvals and notifications.
The Borouge 3 expansion project, meanwhile, remained on schedule, the company said. The project will increase annual production at the Borouge integrated olefins/polyolefins site from 2 million mt currently to 4.5 million mt by mid-2014.
