OMV posts sixfold increase in third-quarter results after Borealis consolidation

Strong olefins and polyolefins indicator margins, as well as a positive inventory valuation effect, helped OMV achieve a sixfold increase in its third-quarter petrochemical operating results to Eur623 ($722) million, the company said Oct. 29.

The full consolidation of Borealis into OMV, with the acquisition of the additional 39% stake in Borealis JV in October 2020, also helped support the company's result. OMV now holds a 75% stake in Borealis.

Record-high European polyolefins margins, rising olefins margins and a positive inventory effect drove an increase in OMV's petrochemicals results, the Austrian company said in its third-quarter results.

OMV reported an increase of 22% in ethylene indicator margins and a 41% increase in propylene indicator margins, with strong demand that helped to drive higher ethylene and propylene prices, which outstripped a rise in energy costs. The effect was most felt in propylene which saw a tighter supply-demand balance, the company said.

Borealis' contribution to the overall OMV chemical results, excluding its JVs, grew by Eur341 million, to Eur400 million, up from 59 million from Q3 2020, supported a robust result from the polyolefin business and an increased contribution from the base chemicals business by increased production at its Stenungsund steam, Sweden, cracker.

Borealis' polyethylene indicator margins during Q3 grew by 43% to Eur524/mt from Eur367/mt in Q3 2020, with polypropylene up 91% to Eur748/mt from Eur392/mt in the same period the previous year.

Both strong polyethylene and polypropylene results were supported by strong demand in the European markets which together with constraints on imports were caused by container freight logistics issues. In addition, supply from the US was limited following the recent hurricane season which halted US Gulf Coast production and in turn put constraints on further imports into Europe.