BOREALIS ANNOUNCES 2ND QUARTER OPERATING PROFIT OF EUR 49 MILLION

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BOREALIS ANNOUNCES 2ND QUARTER OPERATING PROFIT OF EUR 49 MILLION
11 August 2004 - Borealis A/S

Borealis today announced its second quarter results, reporting an operating profit of EUR 49 million. This is a significant improvement compared to the same period last year but EUR 7 million lower than the first quarter of 2004, as a result of higher feedstock prices. The second quarter operating results benefited from strong demand for polyolefins with higher sales volume compared to both the preceding quarter and the same period last year.

Commenting on the second quarter results, Chief Executive John Taylor said, “Demand for our products is growing strongly across all business areas. This is encouraging and a continuing indication that our strategy to create and deliver value for customers through innovation, continues to bear fruit.”

Net interest-bearing debt was reduced by EUR 41 million in the second quarter and the gearing ratio now stands at 68%, a four-point decrease since the beginning of the year and 17 points lower than the corresponding period last year. Higher polyolefins and feedstock prices contributed to increased receivable and inventory values, but the effect was offset by strict working capital management.

Borouge – Borealis’ joint venture with the Abu Dhabi National Oil Company - continued to improve its financial performance in the second quarter, benefiting from high oil prices, a strong Asian market, a beneficial mix of differentiated grades and good operability with production volumes exceeding design capacity.

During the second quarter, Borealis further strengthened its position as an innovation leader, launching a number of new products, including: polypropylene blown-film materials designed for production on machinery traditionally used for polyethylene; two new high-density polyethylene grades, based on Borstar® technology, for beverage caps and closures that offer greater security, better quality and more favourable economics, and, new Daplen™ polypropylene (paintable, recyclable and with zero-gap) for bumpers and rocker panels on the new Series 1 BMW.

“We continue on our journey of realising our strategy, supported by a solid financial performance in the first half of the year which is significantly better than the first half of last year, but still at barely acceptable levels. With the current outlook for feedstock prices remaining high, it is encouraging to see signs of price recovery early in the third quarter leading to improved margins,” John Taylor concludes.

http://www.borealisgroup.com

About: Borealis A/S
Borealis is a leading provider of plastics solutions with more than 40 years of experience in polyethylene (PE) and polypropylene (PP). Borealis solutions are converted by its customers into everyday products such as food packaging, medical devices, diapers, pipes, automotive parts and power cables.

Borealis is owned 50% by the Norwegian oil company, Statoil, and 50% by IOB Holdings, owned equally by OMV, the Austrian oil and natural gas group, and by the International Petroleum Investment Company (IPIC) of Abu Dhabi.

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