BOROUGE - Key Themes Ahead of 2Q26 Results

研报英文原文证据摘录

BOROUGE - Key Themes Ahead of 2Q26 Results

NSTEIN FLASHMAIL

1 July 2026

James Hooper

+44 20 7676 6995

European Chemicals james.hooper@bernsteinsg.com

Borouge Plc Sebastien Afoy

+44 207 762 1032

Rating sebastien.afoy@bernsteinsg.com

Market-Perform Specialist Sales

Price Target James Brady

+44 20 7762 5272

BOROUGE.UH 2.48 AED james.brady@bernsteinsg.com

Borouge - Key Themes Ahead of 2Q26 Results

We regularly hold calls with companies, making sure we are up-to-date with their latest communications. We recently caught up with

Borouge in the lead up to their 2Q26 reporting, and provide an update of the key themes below.

Lower production and higher costs offset the benefit of higher prices, and we consider 2Q consensus optimistic. Production

volumes declined after the debris damage to the Ruwais facility in early April. Although this has mostly been repaired, production was

low in April and normalised through the rest of the quarter. Sales volumes are likely to be higher than production, through the shipment

of most of the c. 130kt inventory built up during Q1 to cover for production outages. For the shipped product, Borouge benefited from

higher polyolefin prices, maintaining the premia. However, costs were also elevated. On the logistics side, management confirmed that

alternative transportation routes (i.e. trucking) enabled the company to maintain shipments of Q2 production volumes, but these routes

came at a higher cost. On the raw material side, Borouge’s propylene supply contract is exposed to market pricing, whereas ethane

supply is price-capped. We believe our 2Q EBITDA estimate of $435m model captures the supply constraints, but perhaps less so

some of the cost developments. So we see moderate downside to our estimate.