Borealis has published its annual report 2023, combining its financial and non-financial reports.
Overall, Borealis Group had a negative operating profit of €-9M ‘due to adverse market conditions, high inventory effects, and a generally weaker environment in all business areas, driven by higher inflation and cost- of-living crises’, the report reads. The business recorded €8,042M in sales and other income, including its Fertilizers, Melamine and Technical Nitrogen Products business unit (NITRO), which was sold in July 2023.
Borealis Polyolefins’ operating profit fell to €-79 million in 2023 from €526 million in 2022. Borealis and TotalEnergies polyethylene joint venture Baystar, which started production in October 2023, recorded €158 million in losses compared to €-58 million in 2022.
The new unit is the first in North America to use proprietary Borstar technology from Borealis. The technology produces polymers with enhanced sustainability by enabling light-weighting and the incorporation of greater amounts of post-consumer recycled materials in a variety of end products.
Weak polyolefin margins in 2023 resulted in a significant decrease in net sales for Borealis Polyolefins, despite similar sales volumes. The segment’s net sales dropped to €5,687M in 2023 from €7,041M in 2022.
“The year 2023 was one of petrochemical overcapacity and flagging demand, both of which exerted downward pressure on prices and operating rates,” Borealis Supervisory Board wrote in the report. “Overall, industry profitability and operating rates fell to levels last seen during the height of the global financial crisis of 2007–2008.”
Borouge, Borealis’ joint venture with ADNOC, helped to balance the scales with a €317M contribution, nonetheless a sharp decrease from the €1,062M reported in 2022.
Borealis Base Chemicals delivered a 2023 operating profit of €162 million, in comparison with the €243 million reported in the previous year.
“A confluence of factors made the year 2023 a challenging one for petrochemicals companies, and Borealis was no exception,” the report says. “Market volatility, logistics and supply chain disruptions, lagging demand and geopolitical strife will continue into 2024 and beyond.”
Nonetheless, Borealis emphasised again that ‘transformation is essential to adapt to these changing circumstances and that it continues to invest in ‘more sustainable solutions that benefit society’.
The report also highlights that Borealis reached an intermediate decarbonisation goal two years earlier than set forth in its 2030 strategy, which aims to increase the share of renewables used to power European production operations in Base Chemicals and Polyolefins to 100% by 2030. The group’s share of renewables is now over 40%.