Good afternoon, and thank you for joining us today for Borouge's second quarter and six-month 2026 results call. My name is Chris Bucknall, Vice President of Investor Relations.

I'm pleased to be joined today by our senior management team: Chief Executive Officer Hazeem Sultan Al Suwaidi, Chief Operating Officer Salem Al Busaeedi, Chief Marketing Officer Roland Janssen, and Chief Financial Officer Siegfried Wengler. Today's call will begin with a presentation from the management team covering our second quarter performance, the operating environment, and our outlook.

We'll then open the lines for questions. A copy of today's presentation is available on the Investor Relations section of our website.

With that, I'll hand over to our CEO, Hazeem.

Thank you all for joining us today. Q2 was delivered in a highly challenging operating environment, and our performance reflects the resilience of the business, the strength of our operations, and our execution capabilities.

We produced 721 kt during Q2 as utilization was reduced by the asset damage that occurred on 5th of April. I'm pleased to report that all repairs have now been safely completed, and full production availability was restored as from the end of June.

Sales volumes of 873 kt exceeded production, supported by the sales of surplus inventory. We were able to do this thanks to the rapid implementation of alternative logistics routes that are independent of the Strait of Hormuz.

We generated revenue of $1.4 billion, supported by record price premia for both polyethylene and polypropylene. Borouge delivered a robust adjusted EBITDA margin of 29% and a net profit of $191 million, a 23% increase on the previous quarter, as higher pricing offset cost increases and lower sales volumes.

Logistics was a key focus for us during the quarter. We acted quickly to maintain access to our key markets following the regional disruption.

Contingency plans were activated in March, which enabled logistics continuity throughout the quarter, with no reliance on the Strait of Hormuz. In addition, we were able to ship additional inventory placed in storage during Q1.

We were impacted by higher logistics and freight costs, but the measures we have taken ensured continuity of supply and enabled us to maintain our customer commitments. Turning to the financial results for Q2.

Despite a challenging operating environment, Borouge delivered a resilient financial performance. Adjusted EBITDA increased 17% quarter-on-quarter to $401 million, and net profit increased 23% quarter-on-quarter to $191 million.

Profitability was supported by stronger benchmark prices and record price premia. We also continued to generate robust cash flow, with adjusted operating free cash flow of $287 million, representing 71% cash conversion.

With that, I'll hand over to Salem to take you through the operations performance in more detail.

Thank you, Hazeem, and good afternoon, everyone. Following the security incident on the 5th of April, several assets at Ruwais complex sustained damage.

Production in the affected units was temporarily suspended while assessments and repairs were undertaken. I am pleased to report that our teams responded with an exceptional commitment.

We executed an accelerated repair program, and full production availability was safely restored by the end of June, ahead of schedule. Repairs costs are expected to result in only a limited increase in 2026 maintenance capex, which we continue to expect will be below $300 million USD for the full year.

Turning to utilization rates, the impact of the asset damage and the regional disruption is clearly visible in the second quarter. As a result, polyethylene utilization was 48%, and polypropylene utilization was 71% in Q2.

Looking ahead, with all affected assets now back online, Borouge is well-positioned to return to high utilization rates during the second half of 2026, but this will be subject to feedstock availability and logistics conditions. Turning to an update on Borouge 4.

I'm pleased to confirm that commercial production has started from the XLPE2 unit, following the successful completion of performance testing. This facility produces high-value cross-linked polyethylene products, and initial volumes have now been delivered to customers across the region.

The unit is expected to continue ramping up through the remaining of the year. We continue to progress the commissioning of the remaining Borouge 4 units, which are on schedule to be available in the second half of 2026.

With that, I'll hand over to Roland to take you through the commercial performance in more detail.

Thank you, Salem, and good afternoon, everyone. Polyolefin market conditions evolved rapidly during the quarter.

Following the market tightness seen in April and May, market balances began to normalize during June as production rates in Asia showed some signs of recovery. During the quarter, the impact of Middle East-related feedstock shortages was felt most acutely across Asia, leading to significant polyethylene and polypropylene capacity outages.

Based on our estimates, approximately 29 million tons of regional polyethylene and polypropylene, or 19% of total capacity, was affected across Borouge's core Asia-Pacific markets. While some producers secured alternative feedstock supplies and some intermittent flows through the Strait of Hormuz continued, operating rates across many assets remained below normal levels, keeping a significant share of regional capacity offline for much of the quarter.

Looking ahead to the third quarter, we expect market prices to moderate versus second quarter levels as operating rates continue to recover and regional supply constraints ease. However, pricing is expected to remain above historical averages.

Importantly, demand in our core markets remains stable. Over the long term, we remain confident in the structural demand outlook for polyolefins, with growth in Borouge's core market expected to continue outpacing GDP.

Looking at pricing, average selling prices increased 53% quarter-on-quarter, supported by exceptionally strong market prices. The strong pricing environment was complemented by record premia of $438 per ton for polyethylene and $282 per ton for polypropylene, far above our through-the-cycle guidance.

As a result, both polyethylene and polypropylene benefited from a substantial uplift in average selling prices versus the first quarter. It is important to note that the elevated premia do not reflect a structural change in the market.

Instead, they are the result of short-term supply tightness and product mix adjustments. With limited production available, we were able to focus on the most-needed grades to prioritize our core customers and regions with the strongest and most urgent demand.

We delivered products where shortages were most acute and where pricing was highest. Looking ahead, benchmark prices have moderated in July.

Nevertheless, the current order book and market indicators suggest pricing in the third quarter should remain above historical averages. Turning now to sales volumes.

In the second quarter, sales volumes of 873 kt exceeded Ruwais production of 721 kt, with the surplus comprising 54 kt from other sources, including Borealis and our China compounding plant, and 98 kt of sales from inventory produced in the first quarter. This demonstrates our success in developing alternative logistic routes that are not dependent on the Strait of Hormuz.

Asia-Pacific remained our largest market, accounting for 49% of sales volumes, while the Middle East and Africa increased to 41%, up 2 percentage points quarter-on-quarter, as we expanded shipments in the region via land freight. We maintained our focus on higher-value segments, including infrastructure solutions, which represented 34% of total sales volumes.

Going forward, we will continue to adapt our production and sales planning to target high-netback regions and grades based on what we see developing in our markets. We need to be very agile here because markets are volatile and customer requirements can change quickly.

With that, I'll hand over to Siegfried to take you through the financial performance.

Good afternoon, everyone. Turning to revenue, Borouge delivered strong topline growth in the second quarter, despite lower sales volumes, supported by the significantly stronger pricing environment.

For the year-on-year comparison, it's important to note that financial performance in the second quarter of 2025 was lower due to the Borouge 3 turnaround, which reduced production and sales volume in that quarter. Revenue increased 22% quarter-on-quarter and 8% year-on-year to $1.4 billion, as a 50% increase in average selling prices more than compensated for the reduced sales volume.

We benefited from significantly higher benchmark prices and record price premia for both polyethylene and polypropylene. Revenue increased 22% quarter-on-quarter and 8% year-on-year to $1.4 billion, as a 53% increase in average selling prices more than compensated for the reduced sales volume.

Turning now to EBITDA and net profit. In the second quarter, we delivered adjusted EBITDA of $401 million, up 17% quarter-on-quarter and down 9% year-on-year.

This translates to an EBITDA margin of 29%, in line with quarter one, but 5 percentage points below the prior-year period, mainly reflecting higher feedstock, freight, and logistics costs. Net profit for the quarter was $191 million, up 23% quarter-on-quarter and broadly stable year-on-year.

Both EBITDA and net profit were supported by the recognition of approximately $25 million pretax insurance claim proceeds. Turning now to costs, where we had two major impacts: higher propylene feedstock prices and increased logistics and freight costs.

We purchase the majority of our propylene feedstock via a contract which is linked to market prices at a discount. This resulted in a significant increase in expenses on propylene feedstock, which started in March and continued through the end of quarter two.

Propylene prices have reduced and are now lower in July, but still remain above pre-conflict levels. Selling and distribution expenses increased significantly during the quarter to $254 per ton.

This reflects higher freight and logistics costs associated with the use of alternative export routes implemented following the regional disruption. In addition to the above factors, we also saw reduced fixed cost absorption caused by lower sales volume.

Turning now to the balance sheet. Borouge retains significant financial resilience with which to navigate the short-term disruption we are facing.

During half one 2026, adjusted operating free cash flow reached $581 million at a 78% cash conversion. Capex was elevated due to repair works following the asset damage on 5th of April, and net working capital cash outflow of $256 million was to be expected and was caused by the temporary effects of higher costs of production combined with higher finished goods prices, which led to an increase in the value of inventory and receivables held on the balance sheet.

The 8.1 fils per share dividend paid in half one was an aggregate cash payment of $665 million. We also utilized $59 million to fund our ongoing share buyback program.

Net debt at 30th of June increased to $3.3 billion from $2.7 billion at 31st of December last year. As part of Borouge International since 31st of March 2026, Borouge PLC enjoys the ongoing backing of its major shareholders, ADNOC and OMV.

Borouge International has strong investment-grade credit ratings. In line with the treasury strategy for Borouge International, certain external facilities at Borouge PLC were replaced with shareholder loans from Borouge International during the period.

Turning to the financial outlook for half two. The situation remains volatile and uncertain.

We have set out two scenarios here: one that describes the likely outcome if the Strait of Hormuz reopens sustainably, and another that is based on a continuation of the current restrictions. If the Strait opens up, we can expect polyolefin prices to reduce and normalize, but we would benefit from being able to operate at higher utilization rates, with reduced feedstock costs for propylene and lower logistics costs than we are currently facing.

Conversely, if there is a continued restriction on traffic through the Strait, then polyolefin prices will remain elevated, and we may be restricted in our ability to increase production from current utilization levels. We have demonstrated that we are able to operate effectively in both of these environments, and we will continue to position the company to maximize value for shareholders in either case.

I will now hand back to Hazeem for some final words on Borouge International and the investment case for Borouge PLC.

Thank you, Siegfried. Borouge PLC is now part of Borouge International, formed from the combination of Borouge, Borealis, and NOVA in March 2026.

Today, Borouge International has released a summary of its own Q2 financial results. For the three months to 30th June 2026, the new group has delivered revenues of $5.5 billion, adjusted EBITDA of $1.8 billion at a margin of 33%, and a net profit of $763 million.

The strong financial performance was supported by high polyolefin pricing across global markets. Borouge International's plants based in North America and Europe have been able to operate freely, without any restrictions on feedstock or logistics such as we have been facing in Middle East.

This is an immediate demonstration of the strength of the new diversified global platform. To summarize, we faced many difficult challenges in Q2, but I am pleased to say that we responded with energy and commitment to safeguarding value for our shareholders.

I would like to thank the teams who successfully repaired the assets damage during the quarter for their hard work and dedication. Despite restricted production volumes, we maximized profitability by optimizing product mix as we continued to reliably supply our valued customers.

During the same quarter, the power of the Borouge International global platform has been clearly demonstrated. Meanwhile, our minimum dividend intention of 16.2 fils per share remains in place, offering a 6.7% yield.

We're now happy to take your questions.

Hello. Good afternoon.

Thanks for taking my question. I guess one point that Salem mentioned on his remarks and also part of the guidance, looking at your feedstock availability as of July, could you provide us some color on that front?

Then second, assuming you're getting all of the feedstock that you needed for your plant, how much of your production would you be able to move to the alternative routes, assuming utilization rate at 100%? Thank you.

Hi, Ricardo. It's Chris here, VP IR.

Just on the feedstock situation, or the current utilization situation at the moment, as we head into July, we've been able to operate between 60% and 70%. I think as we set out in the slide in the presentation, what happens in August and September and the rest of the year depends on the status of the Strait of Hormuz.

If we were to get to high levels of utilization in a scenario where the Strait is open, we would therefore expect the freight and logistics also to be somewhat easier, and therefore we would be able to ship all of that production.

Cool. Thanks, Chris.

Hi. Good morning.

Thanks for taking my questions. I've got two, please.

Can I just follow up on that utilization question? Is it fair then to assume as things stand currently that PE utilization goes somewhere near PP's utilization of about 70%, and that's subject to any geopolitical changes will be around 70%, that kind of area, for the time being?

Then secondly, is there a way that this could go up incrementally outside the Strait of Hormuz being opened, i.e., from 70% to 80%? Then secondly, on BGI, have there been any day-to-day changes at the PLC since the BGI merger completed, and can you give a little bit more about how synergy delivery works or doesn't work before the tender offer?

Thank you.

James, hi. Chris again.

Just on the utilization point. It does go up and down day-to-day.

We've had days that are much higher than 70% in July. I just think we're not in a position to really predict the Q3 outcome here as we stand at the end of July, and we'll just have to sort of see where that comes out and report that when we report Q3 to you.

It is possible, yes, to incrementally get improvements for short periods of time, and it goes up and down, right? It's an average over the quarter you're looking at.

That all we can tell you is where we are at in July, and that's what we have. For Borouge International and synergies?

Just also on the utilizations, we definitely been focusing very much, of course, to do a safe restoration of assets that have been damaged. I truly appreciate the great work and hard work been done by the team and for bringing all these assets ahead of time, end of June.

Now, look at July, we have been operating at much more better, I would say, rates. We see things much more, I would say, moving really in a better direction.

Again, it's very difficult to predict, I would say, the full picture, but we see things are really moving in the right and much better, I would say, direction when it comes to utilizations and production. Yep.

Siegfried, you want to take the BGI integration?

Let me add a few words on Borouge International. Since the formation of Borouge International, Borouge PLC is now 90% owned by Borouge International, and that's since the end of quarter one.

As such, we are participating in the value creation initiatives and synergy realization a bit across the wider group. Maybe I want to draw your attention on a separate press release that went out for Borouge International, where you can find some first financial information and the progress on the company itself.

Thanks.

If we can get the second question. The first one, Roland, do you want to take the first one?

You can start with the first one, Roland. Please go ahead.

Yeah.

This is Roland. Just let me try and answer, let's say, the first question.

What we see happening in the market right now is a cooling down or a calming down of the market. We do believe that moving forward that these prices are going to stabilize.

They will stabilize at a let's say higher level as what we've seen at let's say peak crisis. In terms of let's say volumes, it's a very stable demand.

We do expect let's say that market to continue to be stable. It's the fundamental drivers behind the markets that continue to be looking very positive and stable.

There we don't expect any changes.

Just on the second question, I can take this one. When it comes to raising shipping costs and logistics costs, of course, this is an important aspect for our business, giving also the big volume that we are exporting out of UAE.

We have been working, I would say, very hard to make sure we have a full readiness in managing the situation. I can confirm by now that we are able to ship all our volume without the need of Strait of Hormuz.

We have been doing it in June, and we are doing it now in July and moving forward. This gives us, I would say, full, I would say, dependency from Strait of Hormuz and improve our efficiency when it comes speed delivering to our customers, and giving the service to our customers, and continue our supply, I would say, reliably to our customers.

This has been done, and, of course, this is a great news for us because the situation has been quite tough and in overcoming all these challenges. That's a big milestone, and we are now, I would say, able to supply fully our customers out of, I would say, the eastern coast with our partners.

Yeah. Of course, from a cost perspective, we have started seeing also some of the costs and some of the terms of the costs when it comes to shipping costs that has started to decline, giving the negotiation discussions we're doing in improving and optimizing our logistical costs.

Definitely we're in much much better and more confident situation in supplying our customers now.

It's 1. It's 16.2 fils per period, and 8.1 semi-finals, and we continue with the same policy.

Yes, we're committed to this.

No, no. We are able to supply all volume, as I said.

We are able to supply all volumes. We have, I would say, full confidence in supplying all our customers.

We are doing it now in July. We are shipping all volumes outside of UAE without routing our volume through Strait of Hormuz, as you are fully aware of the situation.

We have a reasonable good volume already we are selling in July. We're ramping up our sales volume also from a utilization and from a sales volume August and onward.

Hi. If I may follow up just on the feedstock comment.

When we look at Borouge 4 and volumes are still ramping up, should we see the feedstock situation as something independent from the other plants, meaning could the ramp-up of Borouge 4 also be impacted by feedstock availability, or is that something that you don't expect to happen? Thank you.

Borouge 4, as we have communicated, we have already established and commercialized our second expansion of XLPE2 is a key component within our, I would say, application strategy when it comes to wire and cable. We'll be announcing more news and more details on the following, I would say, plants.

We are ramping up our activities toward introducing hydrocarbons and safely starting up the upcoming plants in 2026, and there will be also in 2027. It's very difficult now to predict the overall situation.

I would say we will give more details as we move on with Borouge 4. More importantly, there will be more big news that we'll be announcing in the near future with the starting up our plants in Borouge 4.

Thank you.

Hi, everyone. Done on the excellent results.

Just a few questions from me. On your product price premia, it was excellent in the quarter, are you able to give any more details of how sort of well you did it or sort of was there specific countries which gave your higher netback, if so, you allowed to share a little bit more details on that?

Also, as we come to the end of July, how much is that price premia dropped? Has that dropped towards your through-cycle guidance, or any sort of insight in the price premia would help.

Then more of a question to management, more sort of long-term thinking, how do you think the regional conflict has structurally changed the petrochemical industry in the Middle East? If you look at sort of 10 years from now, what would you envisage the Middle East petrochemical market looks like in terms of how it diversifies assets, etc.?

Thank you.

Roland, maybe we want to

start with

the easy questions, one, two.

Thank you for the question. I think the premia showed very strong results because we were able to really let's say help those customers and those regions mostly in need where there was an acute let's say supply shortage.

It was literally I would call it across the board of all the applications and all the regions that we supply. There was not really one specific let's say application or country that stood out.

It was literally let's say among our let's say partner customers and key customers who we were able to achieve that in partnership with our customers. Now, these premia, together with the market prices, are coming down, these premia are not structural.

They are really, I would say, a sign of the let's say the period that we were going through. If I look at let's say the July pricing performance, we still see elevated premia compared to our through-the-cycle guidance.

We do expect let's say the premia over time to normalize and again to more normal levels and more in line with what we have given as a guidance.

Just on the questions of the 10 years outlook, we're truly at the moment focusing on day-to-day and on weeks-by-weeks and days-by-days, and so on. It's a great question, to be honest.

The region will continue, of course, remain an important source of petrochemical, giving the advantage of the cost position, and of course the proximity of the market, as we have highlighted in the past. North Asia, South, and Africa, together with Middle East, will remain, I would say, a prime market of a growth in comparing with the global demand overall.

Definitely, of course, it will remain competitive, and it will remain, of course, I would say, as an advantage of petrochemical. Therefore, definitely we're looking at the future very brightly when it come to our Borouge 4 and the expansion that we're doing as well overall with Borouge International.

Thank you.

Let me try and answer this. There was indeed a let's say a shift.

We saw let's say some reduced activity in some of the infrastructure projects. We believe that it is related to some of these large projects being put on hold, waiting, of course, for how the situation will further evolve.

As a result, we saw a shift let's say from let's say infrastructure more to consumer products. Now, looking ahead, we do expect the shift to normalize again, as we also see let's say the project work to pick up again in the market.

Thank you very much for being with us. It's always great to interact and engage with you, and look forward to have one-to-one sessions with you.

Thank you very much. Have a good day.