Borealis recorded a net profit of € 112 million for the second quarter of 2012 compared to € 168 million in the same quarter in 2011. Net profit for the first half of 2012 reached € 252 million compared to € 341 million during the same period of the record year 2011. The Base Chemicals business and Borouge, Borealis' joint venture in Abu Dhabi, continued to perform well in the second quarter of 2012, contributing significantly to the net profit. The European Polyolefins business delivered lower results in the second quarter. This is attributed largely to a weak economic sentiment in a decreasing price environment with the oil price decreasing rapidly from above $ 125 per barrel to below $ 100 per barrel. Borealis' financial position remained strong with a gearing of 44% at the end of June 2012.

Borouge 3 expansion project

The Borouge 3 expansion project in Abu Dhabi, UAE, is progressing according to plan with some 23,000 contractor personnel currently on site. The expansion is on track to increase the annual production capacity of the integrated olefins/polyolefins site from 2 million tonnes to 4.5 million tonnes by mid-2014.

Semi-commercial catalyst plant in Linz, Austria

The construction of the semi-commercial catalyst plant in Linz, Austria is progressing towards its planned finalisation in the second half of this year. The first chemical raw materials are expected to be delivered on site in August 2012.

Successful strategic financing activities

In June Borealis successfully launched its second retail bond transaction in Austria with a maturity of seven years. Due to strong investor demand the transaction amount was increased to € 125 million from initially € 100 million. The company has also successfully completed a US private placement with maturities of up to 15 years and a total amount of more than $ 130 million. These transactions reflect Borealis' strategy to maintain a strong liquidity position by the terming out its debt through diverse channels.

Value Creation through Innovation

Borealis remains committed to its Value Creation through Innovation strategy in difficult market conditions

Car maker Renault has specified a Borealis and Borouge polypropylene (PP) grade for use in the lightweight bumper applications for two new additional Renault automotive platforms: the Dacia Lodgy and the Renault Twizy, Renault's first electrical car. The material is already being used for a new generation of bumper applications in other Renault platforms in South America and Russia, helping Renault to make a significant contribution to overall vehicle weight reduction for fuel economy and lower emissions, with absolutely no compromise on the part's performance

Borstar Aquility, a new family of tailor-made products for drip irrigation applications underlines the important role of modern irrigation systems in conserving water and increasing crop yields - two crucial factors in addressing today's global challenge of water shortage and rising food demand.

Borealis has launched a new BorPure family member PP grade, offering packaging converters up to a 10% saving in cycle time and up to 5% energy reduction in the creation of lightweight hinge closures with superior optics

Difficult market conditions may continue for a longer period

"The political and economic situation in Europe is difficult and the markets have reacted accordingly," says Borealis Chief Executive Mark Garrett. "We have seen a significant drop in polyolefin prices and margins in the second quarter of 2012. Despite this, Borealis has produced a resilient set of results with particularly pleasing performance from our Base Chemicals Business and the Borouge joint venture. I believe Borealis will continue to outperform the market by maintaining our focus on cost competitiveness and our four pillars of safety, innovation operational and commercial excellence."