Borealis achieves major increase in operating profit to EUR 278 million for 2004

Borealis today announced its fourth quarter results, reporting an operating profit of EUR 104 million for the quarter. The result compared positively to the EUR 24 million achieved in the same quarter of 2003, benefiting from improved operations and higher industry margins.

Key figures and ratios (Quarter ending December 31, 2004)		4Q 2004	4Q 2003	1-4Q 2004	1-4Q 2003
Sales revenue	EUR M	1,309	873	4,628	3,673
Operating profit / (loss)	EUR M	104	24	278	39
Net profit / (loss) after tax	EUR M	80	35	203	16
Reduction / (increase) in net interest- bearing debt	EUR M	322	137	344	89
Gearing	%			39%	72%
ROCE after tax	%			11%	3%

Financial overview for 2004

Commenting on Borealis’ overall performance, Chief Executive John Taylor said, “2004 was the ‘Year of Delivery’ in which Borealis completed the performance turnaround embarked on in 2001. Against a market background of rising oil and feedstock prices, deteriorating USD/EUR exchange rate, and slow European economies, we successfully achieved the financial goals set three years ago.”

Borealis achieved an operating profit of EUR 278 million in 2004, a substantial improvement compared to the EUR 39 million recorded in 2003. This performance was achieved as a result of internal efforts stemming from its nine-quarter transformation programme. In addition, the result benefited from improving industry margins brought about by a generally tight supply/demand situation in the marketplace. Sales volumes grew 7%, significantly outpacing growth in main markets and especially in key market segments, underpinned by strong operational performance.

Net profit rose to EUR 203 million in 2004, from EUR 16 million in 2003. Borouge, the joint venture with Abu Dhabi National Oil Company (ADNOC) serving the Middle East and Asian markets, continued to perform impressively, benefiting from high oil prices in addition to healthy demand for its Borstar® PE enhanced products.

The net result for 2004 corresponds to a return on capital employed (ROCE) after tax of 11%, compared with 3% in 2003.

In 2004, Borealis reduced net interest bearing debt by EUR 344 million, and the gearing ratio dropped from 72% to 39% by the end of the year. This was achieved through a combination of strong capital management and tight cash control, aided by the restructuring of its European asset base including selling its plants in Portugal. Another step was the creation of a new operational hub in Scandinavia in 2004 by merging the activities in Norway and Sweden. These restructuring steps simplify Borealis’ European production base, allowing it to concentrate on four operational hubs: Belgium, Central Europe (Austria and Germany), Finland, and Scandinavia.

For a more detailed financial overview, please refer to Borealis’ 2004 Annual Report available on our website http://www.borealisgroup.com/financial.

Safety and operations

Progress in safety performance in 2004 deserves prominent recognition. Borealis reduced total recordable injuries (TRIs) per million working hours from 3.8 in 2003 to 2.4 in 2004. This result is comparable to the best in the industry and is in line with Borealis’ ambition to be a leader in health, safety and environmental practice and performance.

Improved safety has created a foundation for operational excellence, exemplified by the performance of the production plants in 2004, particularly t

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