Borealis, a provider of chemical and innovative plastics solutions, recorded a net profit of €140 million for the first quarter of 2012 compared to €174 million in the same quarter in 2011.

The decrease in net profit was a result of the difficult market conditions, especially for the European Polyolefin business segment. Both Borouge and the Fertilizer business continued their strong performance.

Net debt increased by €186 million in the first quarter of 2012, largely driven by the acquisition of the French fertilizer producer PEC-Rhin and a dividend payment to Borealis' shareholders. Borealis' financial position remained strong reflected by a gearing of 40%, improving 3 percentage points, compared to the first quarter of 2011.

Acquisition of PEC-Rhin completed

In November, Borealis made a firm offer to acquire the French fertilizer producer PEC-Rhin, and closed the transaction on January 31, 2012. This investment complements Borealis' existing fertilizer business and will enable the company to further strengthen its Base Chemical business segment.

After closing of the transaction, the PEC-Rhin fertilizer production was immediately integrated into Borealis' Linzer Agro Trade sales channel which provided for a seamless transition and an immediate benefit to the company.

Borouge Expansion

The Borouge 3 expansion project in Abu Dhabi, UAE, is progressing as planned, with currently nearly 21,000 contractor personnel on site. The expansion will increase the annual capacity of the integrated olefins/polyolefins site from 2 million tons to 4.5 million tons by 2014.

Water for the World

As part of their Water for the World initiative, Borealis and Borouge are supporting the development of the x-runner portable toilet venture in order to address the world's growing sanitation challenges. The x-runner venture, an innovative sanitation initiative and a social business concept, offers a water-neutral, portable and private low cost solution for urban areas where sewage networks are unavailable. Borealis and Borouge are supporting this innovative project in the development and implementation phase by providing financial funding as well as material expertise.  

Expecting slow recovery in the second half of the year

"As expected, the beginning of the year has been tough with overall clean margins still far below a long term sustainable level," says Mark Garrett, Borealis Chief Executive. "The expected recovery during the coming quarters will be slow, and for Borealis dependent upon increasing political and economic stability, especially in Europe."