Borealis earnings rise on stronger polyolefin markets in Europe, Asia

MOSCOW (MRC) -- Borealis (Vienna, Austria) has reported fourth-quarter net earnings of EUR210 million (USD252 million), a 52% rise compared with the prior-year period and up sequentially on earnings of EUR163 million in the third quarter, driven by a “stronger polyolefin market in both Europe and Asia,” it says.

The improvement in net income comes despite a 9% decline year on year (YOY) in net sales to EUR1.69 billion, although the sales figure is slightly higher sequentially than the third quarter. The earnings increase “is a very strong finish to the year,” Borealis says, adding that net debt in the fourth quarter was reduced by EUR77 million. “However, the rise in the natural gas price and operational issues impacted the contribution from the Borealis fertilizers business,” it says. Borealis separately today has announced the start of a sales process for the divestment of its nitrogen fertilizer business.

In Europe, Borealis benefited in the fourth quarter from higher polyolefin sales volumes, especially in the packaging and automotive segments, stronger polyolefin margins, and positive inventory effects, according to majority owner OMV in its financial results, also released today. The positive developments were “partially offset by a reduced light feedstock advantage versus naphtha and an unplanned outage of the [Porvoo] steam cracker in Finland,” OMV says. The result of Borealis’s fertilizer business was lower YOY with decreased margins as the cost of higher natural gas prices “could not be fully passed through to the market,” OMV says. The Borealis Borouge joint venture with the Abu Dhabi National Oil Co. (Adnoc) in the UAE also recorded a significant improvement in the quarter, driven mainly driven by stronger polyolefin volumes and prices in Asia, it says.

In a 2021 outlook by OMV, polyethylene (PE) sales volumes for Borealis this year are projected to be slightly above the 2020 level of 1.76 million metric tons (MMt). Polypropylene (PP) sales volume for Borealis are expected to be in line with 2020’s volume of 2.12 MMt. The European PE indicator margin in 2021 is forecast to be above the prior year’s level of EUR350/metric ton, while the European PP indicator margin is expected to be above 2020’s level of EUR413/metric ton.

For the full year 2020, Borealis reported net profit of EUR589 million, down from EUR872 million in 2019, “despite a market environment heavily impacted by the COVID-19 pandemic,” Borealis says. Net sales declined to EUR6.8 billion from EUR8.1 billion in the prior year. The 2020 result was negatively impacted by a lower oil price environment, resulting in a reduced light feedstock advantage, negative inventory effects in Europe, and a lower polyolefins price environment in Asia, it says. A deteriorating fertilizer market environment also negatively impacted the result, it adds.

Despite this, demand for polyolefins “remained healthy,” leading to a slight rise in sales volumes compared with 2019 due mainly to higher sales in the packaging sector, partially offset by lower sales in the automotive sector. The annual result “is a strong financial result in the context of a very challenging market environment impacted by the pandemic and a declining oil price, which has led to a negative price and inventory value development,” says Borealis CEO Alfred Stern.

As per MRC, Borealis has fully resumed production at its steam cracker in Stenungsund, Sweden. Thus, the cracker with the capacity of 625,000 mtyear of ethylene was restarted on 15-17 January, 2021. Meanwhile, the status of the force majeure on the products from this cracker remains unclear at the moment.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC

MOSCOW (MRC) -- Poland’s PKN Orlen Group said that higher margins drove its petrochemical operating result to zloty (Zl) 250m (USD66.8m) in the fourth quarter of 2020 from Zl 2m in the same quarter of the previous year, said the company.

PKN Orlen, the state-controlled oil refining giant announced its financial report for 2020, indicating that the net profit of the company, after including the profits from taking over energy company Energa was at PLN 3.4 bn (EUR 0.76 bn).

"In 2020 we recorded very solid results, despite the unfavourable conditions caused by the [COVID-19] pandemic. The key to the success in the fuel-energy trade is diversifying the areas of activities. This is why we observe the trends and respond to them, which directly results in financial results,” Daniel Obajtek, the CEO of PKN Orlen said.

The EBITDA LIFO result was PLN 12.1 bn (EUR 2.69 bn) and the income from sales was at PLN 86.2 bn (EUR 19.19 bn), the consolidated report after Q4 2020, published by Orlen reads.

The company stated that the key investments in development had continued and PLN 9 bn (EUR 2 bn) was spent on that purpose. The retail segment achieved a record result of PLN 3.3 (EUR 0.73 bn), while the energy sector recorded EBITDA LIFO profit at PLN 3.4 bn (EUR 0.76 bn).

As MRC reported earlier, in December 2020, PKN Orlen (Plock, Poland) announce that the company will invest an average of 4.4 billion zloty (USD1.2 billion) per year between 2021 and 2030 on a major expansion of its integrated petrochemicals business and the creation of a plastics recycling division as part of an enhanced strategic focus on petchems and renewables over the next 10 years.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- French oil major Total, which is making a major push to develop its renewable energy portfolio, said on Friday it had bought 2.2 gigawatts (GW) of solar projects in Texas, adding to a rush of acquisitions elsewhere this year. It said it would cover all power consumption at its US production sites, including its refining and petrochemical platforms, from its solar power and energy storage assets, reported Reuters.

Europe's top energy companies have outlined plans to curb emissions and boost renewable energy output as they come under pressure from investors. Total is looking to wean itself off a reliance on oil and plans to market more electricity to clients.

It aims to add some 10 GW in renewable energy production capacity a year and to reach 35 GW by 2025.

Its latest deal in the US also involves 600 megawatts (MW) of battery storage assets. Total said it was buying the portfolio from SunChase Power and private energy investment firm MAP RE/ES, but did not give financial details.

The group is now developing close to 4 GW of renewable energy capacity in the United States, it said, adding that construction of the first two Texan solar projects was expected to start later this year.

Total, which reports 2020 earnings next week, said in January it would pay USD2.5 billion for a share in India's Adani Green Energy Limited (AGEL) and its solar power assets, its biggest investment yet in renewables.

As MRC wrote earlier, within the framework of its net zero strategy, Total will convert its Grandpuits refinery (Seine-et-Marne) into a zero-crude platform and will invest more then EUR500 mln into this project. By 2024 the platform will focus on four new industrial activities: production of renewable diesel primarily intended for the aviation industry, production of bioplastics, plastics recycling and operation of two photovoltaic solar power plants.

We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

MOSCOW (MRC) -- Eastman Chemical Co. (Kingsport, Tenn) announced the startup of its new dimethylaminoethanol (DMAE) unit at its Nanjing, China site, said the company.

The addition will significantly increase the company’s DMAE capacity, support additional sales in Asia, and further strengthen Eastman’s global leadership in alkyl alkanolamines like DMAE, which is used primarily as an intermediate in water treatment.

Led by Site Manager Lisa Xiao Yan Chen, the project began several years ago and overcame several unexpected obstacles, including COVID-19.

“Even with a global pandemic, the construction had a perfect safety record,” said Sabine Ketsman, vice president and general manager of Eastman’s care chemicals and animal nutrition. “I’m very proud of our entire team."

Ketsman stressed that water treatment is vital in addressing increased water scarcity across the world. “The need for clean water truly affects people’s daily lives and personal well-being,” she said. “This is a great example of how our products and chemistries contribute to enhancing the quality of life in a sustainable way."

Eastman, the world’s largest producer of DMAE and other alkyl alkanolamines, has similar units in Belgium and the United States. Its Nanjing site makes methylamines and dimethylacetamide and has an existing alkanolamines unit that produces DMAE, MDEA, MMEA and MDIPA. Additional growth projects are planned.

We remind that in 2016, Eastman Chemical's chief executive Mark Costa announced that the company wanted to reduce its surplus ethylene and commodity intermediates, but did not intend to sell its cracker in Longview, Texas.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Eastman is a global specialty chemical company that produces a broad range of products found in items people use every day. With a portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. Its market-driven approaches take advantage of world-class technology platforms and leading positions in attractive end-markets such as transportation, building and construction and consumables. Eastman focuses on creating consistent, superior value for all stakeholders. As a globally diverse company, Eastman serves customers in more than 100 countries. The company is headquartered in Kingsport, Tennessee, USA and employs approximately 14,500 people around the world.
mcplast.com

MOSCOW (MRC) -- U.S.-German industrial gas producer Linde beat expectations with fourth quarter earnings and said it was targeting a 11-13% rise in adjusted earnings per share in 2021 irrespective of economic conditions, said the company.

The supplier of gases such as oxygen, nitrogen and hydrogen to factories and hospitals said its fourth-quarter adjusted earnings per share were USD2.30, above the USD2.14 expected on average by analysts according to a Refinitiv poll.

Linde also reported a 12% rise in adjusted EPS for 2020, citing price increases and productivity gains, and forecast first-quarter EPS growth of 16% to 19%. “I have confidence in our ability to grow EPS double-digit percent irrespective of the macro environment while also leveraging any economic recovery,” Chief Executive Steve Angel said in statement.

Linde’s sectors with strongest growth were healthcare and electronics, with sales up 9% and 8%, respectively, due to both higher pricing and volume growth, with the coronavirus pandemic boosting demand for oxygen.

Linde’s biggest competitor Air Liquide is due to report on Feb. 10, while smaller U.S. rival Air Products on Thursday reported first-quarter earnings below expectations, citing, among others, lower demand caused by the COVID-19 pandemic.

Linde has large, long-term contracts in industries such as healthcare, food, beverages, electronics and energy, which help the company sustain steady performance during economic downturns, with customers ranging from Gazprom to Exxon Mobil.

As per MRC, Linde has signed an agreement with BorsodChem (Kazincbarcika, Hungary) for the long-term supply of nitrogen, oxygen, and compressed air to BorsodChem’s chemical complex in Kazincbarcika, including the construction of a new air separation unit (ASU).

As per MRC's DataScope report, December SPVC imports to Russia dropped to 0,600 tonnes from 1,600 tonnes in November. High PVC prices in foreign markets and a seasonal decline in demand in the last two months have put serious pressure on import purchases of PVC from Russian companies. Thus, overall imports were 40,800 tonnes in January-December 2020, compared to 50,900 tonnes a year earlier, with PVC from China and the United States accounting for the main reduction in imports.

Linde’s Frankfurt-listed shares were up 1.6% at 1130 GMT, and are up 53% since mid-March when the spread of the coronavirus triggered a sell-off in global stocks, topping the European chemicals sector index.

MRC