Good morning, welcome to the Borou ge Quarter Two 2023 Earning Call. My name is Carla, and I will be the operator of today's call. If you would like to register a question for the Q&A portion of the call, please press Star followed by 1 on your telephone keypad. When asking your question, please ensure your telephone is unmuted locally. To revoke a question, you can press Star followed by 2. I would now like to pass the conference over to our host, Samar Khan, VP of Investor Relations, to begin. Please go ahead when you're ready. A warm welcome to everyone, thank you for joining us today. My name is Samar Khan, I'm the Vice President of Investor Relations at Borouge. With me today, I have Hazeem Al Suwaidi, our CEO, Rainer Hoefling, Chief Marketing Officer, Jan-Martin Nufer, Chief Financial Officer, and Dr. Hasan Karam, Chief Operating Officer. We will now begin with a short presentation by the management team in respective performance for the period, as well as our outlook for the second half of 2023. We will open the call to your questions. I'll hand over to Hazeem, our CEO, to discuss highlights from Q2 and the first half of the year. Thank you, Samar. Thank you all for joining us today. Q2 has been challenging quarter, yet Borouge has managed to deliver a resilient performance, supported by healthy sales volumes, premium above management guidance, and a strong impact from the Value Enhancement Program. Borouge reports a net profit of $251 million Q2, representing an increase of 16% quarter-on-quarter. On a year-on-year basis, net profit was down 53%, primarily because of a 25% decline in average selling prices over the period. On a half-yearly basis, revenue is down 19% to $2.8 billion in the first half of 2023, versus $3.5 billion in the first half of 2022, primarily due to a 22% decline in prices during this period. The Value Enhancement Program continues to perform strongly, having contributed $253 million in the first half of 2023, and is well positioned to achieve its $400 million target by the year end. Strong cash conversion and robust balance sheet support our commitment to pay $1.3 billion in dividends for 2023. The board has recommended an interim dividend of $650 million, expected to be paid in the second half of 2023. I'll now hand over to Rainer to discuss the market and provide an update on the pricing and premium. Thank you, Hazeem. Good afternoon, everyone. Average selling prices across polyethylene and polypropylene were down 25% from the exceptionally high price levels in quarter two, 2022. On a quarter-on-quarter basis, average selling prices were down only 3%. Despite this challenging environment, Borouge was able to command healthy premia over benchmark prices, reflecting the company's strong market positioning in key segments. In quarter two, premia were maintained above the over the cycle guidance for both polyethylene and polypropylene. The premia for polyethylene was $249 per ton, down 6% on a quarter-on-quarter basis. Premia for polypropylene was $150 per ton, up 9% on a quarter-on-quarter basis. The outlook for polyolefins for the remainder of 2023 remains cautious, and market analysts anticipate a narrow band of price volatility during this period. Global economic uncertainty remains, a slow recovery in Chinese and Asian market expected. We reaffirm the existing through the cycle guidance for premia of $200 per ton for polyethylene and $140 per ton for polypropylene, which is made possible by our differentiated product mix and our ability to capture tactical and regional pricing opportunities. I will now briefly discuss sales for the period before I ask Hassan to take us through some operational highlights from the Q2. Q2 2023 sales volumes are up by 4% versus the prior quarter, following the completion of the Borouge 2 plant turnaround. Our sales volumes from energy and infrastructure solutions represent 40% of polyolefin sales volumes in Q2. This is part of Borouge's strategy to focus on durable products for industrial applications. Specifically, sales volumes of PE100 and XLPE, key premium products used in pipe and wire and cable applications, have contributed positively to the overall sales mix outcome. The Asia Pacific market continues to be the largest destination for sales, with 66% of total sales volume, followed by the Middle East and Africa, with 27%. I hand over to you, Hasan, now. Thank you, Rainer, and good afternoon to everyone. In quarter 2023, production operated at very high utilization rate of 110% and 99% for both PE and PP. Following the successful completion of our Borouge 2 turnaround, which was being conducted in quarter 1. However, the Olefin Conversion Unit, which allow Borouge to internally produce a large amount of the propylene from the ethylene, it also operated at high utilization rate in quarter 2. Ethylene is typically prioritized for use in maximizing the PE production. The additional quantity are sent to the OCU. I will now hand over to Jan-Martin to discuss our financials. Thank you, Hasan, and good afternoon, everyone. I'll be brief on this slide because we have already covered the main reasons for the impacts across our income statement metrics. As Hasan mentioned, Q2 revenue increased by 2.5% quarter-on-quarter to $1.4 billion, and declined on a year-on-year basis by 24%. Net income stood at $231 million in the second quarter, increasing by 16% versus Q1, but decreased by 53% compared to Q2 2022. On a half-yearly basis, revenue is down 19% to $2.8 billion in the first half year of 2023, versus $3.5 billion in the first half year 2022, primarily due to a 22% decline in prices during this period. While top and bottom line performance in Q2 experienced pressure on a year-on-year basis due to significantly lower comparative market pricing, we delivered a healthy EBITDA margin in Q2 of 37%, up 10% from Q1, reflecting improved operational efficiencies. Pressures created by market weakness were partially offset by the positive impact of the Value Enhancement Program. We will delve deeper into that in the upcoming slides, as well as by healthy sales volumes and the resilience of our pricing premia versus product benchmarks. On to the next slide, then. We will now look at our costs, an area where we have made important and material progress. Our overall cost base declined by 9% as compared to Q2, 2022. Cost of sales declined on both a quarterly and yearly basis. Despite higher volumes, we have been successful in reducing our selling and distribution expenses in Q2, recording a decline of 44% year-on-year, primarily because of lower freight costs. General and administrative expenses increased quarter-on-quarter, mainly attributable to one-off non-recurring items. Borouge's first quartile position on the cost curve is an important component that, when combined with improved premia against benchmarks, supports a strong margin profile. I'm happy now to discuss the progress on our Value Enhancement Program. As we have communicated in the beginning of the year, we have introduced a very significant $400 billion Value Enhancement Program to support future growth opportunities, enhance our competitive positioning, and to offset the impact of macroeconomic challenges and pricing pressures. In light of the current challenging market conditions, our focus is on managing proactively conversion, logistics, and fixed costs, as well as revenue optimization. I'm pleased to report that we have achieved a total EBITDA contribution of $253 million in the first half year of 2023. In terms of the areas where this has been realized, over one half has been realized through the reduction of logistics variable costs, almost one-third from revenue optimization, and the remaining from reductions to fixed costs and conversion variable costs. This has been an excellent start of our highly ambitious program, and we look forward to providing you with further updates on the progress during the coming quarters. On to CapEx and cash flow. Cash conversion in Q2 increased to 96% versus 82% in Q1, due to lower maintenance CapEx following the successful completion of the Borouge 2 turnaround in quarter one. Net debt as of the 30th of June, 2023, stood at $3.167 million, versus $3.277 million as of the 31st of March, 2023. I'm also pleased to share that Borouge 4, which is being built by the company's major shareholders, ADNOC and Borealis, has reached an important milestone in completing the project funding through a combination of equity, shareholder loans, and the recently finalized long-term ECA financing. I will now hand over to Hazeem to summarize and conclude. Thank you, Jan-Martin. As mentioned earlier, we are carefully navigating a challenging market environment. We expect polyester pricing to experience some continued volatility looking ahead at the remainder of 2023. Despite this, we are well positioned to maintain premia in our markets. As such, we reiterate our over the cycle premia guidance of $200 per ton for PE and $140 per ton for PP. We expect strong results from our Value Enhancement Program to continue for the remainder of the year. We remain focused on our differentiating product mix, which is one of our key competitive advantages and an important value driver. We expect production volume to remain at high utilization level, and the OCU will be maintained at a high capacity to continue to support our margin enhancements. As our results have shown, our business continues to be resilient within a challenging operating environment. Our ambitious Value Enhancement Program is tracking ahead of schedule, delivering strong cost savings and supporting efficiencies and margins. Our commitment to product innovations and differentiations continues to enable sustained premium over benchmark, despite a weaker pricing environment. We are pleased to reaffirm our dividend commitment of $1.3 billion for 2023, with an interim dividend of $650 million, recommended by the board for payment in the second half of 2023. I would like to refer to the recent report that our majority shareholders have entered into formal negotiations regarding a potential merger of Borouge and Borealis. Borouge will make the necessary disclosures to the market, if and when required. In full compliance with regulatory obligations, any final decisions will be subject to the governance processes of Borouge and other relevant parties involved. With that, we'll open the floor for any questions. Thank you. If you would like to ask a question, you may do so by pressing star followed by one on your telephone keypad. To revoke your question, please press star followed by two. When preparing for your question, please ensure your phone is unmuted locally. Our first question comes from Waleed Jima from Goldman Sachs. Your line is now open. Please go ahead. Hello, good afternoon, and thank you for your presentation. I just have a couple of questions that I would like to ask on behalf of Faisal. First, we noticed that second quarter sales volumes were lower versus expectations. Our understanding that during the Q1 of 2023, there was a 200,000 ton negative impact on volumes due to the B2 turnaround, but it seems that this was not fully reversed during Q2. How do you think we should look at volumes looking into Q3 and Q4? That's for my first question. As for the second, the company's Value Enhancement Program contributed $253 million in EBITDA during the first half of 2023 versus $400 million expected for the full year. Do you expect any upside potential to this full year target, given that it's already running ahead of the schedule, as mentioned during the presentation? Thank you very much. Thank you for the question. I would like, Rainer to answer the first question, please, and then Rainer, sorry. The first one is Rainer, the second one is Jan-Martin, please. Yeah. On the, on the volume side, I think first of all, when you talk about volume, when we talk about polyolefin volumes, right? The polyolefin volumes ramped up accordingly to the presentation from quarter one to quarter two, right, after the turnaround. Here we are, we are fully on, on plan where we want to be, right? Going forward, we expect nevertheless, market is, is difficult and it's, it's a, it's a tough sales process for the time being. That we can keep the volumes stable in quarter three and quarter four. That we are going to sell also, targeting to produce. Right, on the ethylene side, this went down because we use the ethylene, of course, for our production, because it is not in our intention to sell ethylene, right? Only when something is left. The focus is on the polyolefin side. Here, stable sales. Yeah, thank you. Thank you, Rainer. Maybe just from my side, a couple of words to the question related to the Value Enhancement Program. Indeed, I think we're very, very pleased that we have, first of all, started the program very early with some immediate measures. $253 contribution just for this year is already a very good start. The categories that we have been looking into for the controllable OpEx are progressing well. Indeed, I think there is a good chance that we reach and overachieve the target of $400 million that we have been setting. It's, it's a work, obviously, and a large number of projects in the subcategories that we're having in terms of the logistics cost, conversion cost, and the fixed cost. As I said, you know, the program is running very well, and we're gonna continue to give updates on a regular, on a regular basis. Well on track to achieve or overachieve towards the end of the year. Very clear. Thank you very much. Thanks, Waleed. Our next question comes from Ricardo Rezende, from Morgan Stanley. Your line is now open. Please go ahead. Hi, good morning, all. Thanks for, for taking my question. My first question, I don't want to be sound too repetitive, as I made the same question in the Q1 call. It's related to the premium. We've still seen quite a healthy product premium, even though the overall market remains quite challenging. If you could please elaborate a little bit more on why do we keep seeing such a good premium, even though the benchmark prices are still struggling? How should we think about the relationship between the premium and the benchmark prices? The second question is a follow-up just on the ethylene volumes. When we, we see that you, you mentioned that we should continue to see the plants running at a very high capacity utilization rates for the rest of the year. Does that mean that probably you won't have a lot of ethylene volumes to be sold to the third parties? Thank you. Thank you, sir. I suggest the first question go to Rainer and the second one to Dr. Hasan, our chief operating officer. Go ahead, Rainer. ... Yeah. Okay. Thank you very much for the, for the question. First of all, the, the, the benchmark prices, right? I refer to the, the most common grades produced and transacted in the market in Asia, Asia North, right? What you see that we can maintain over the cycle guidance, the $200 and then $140 on polypropylene, $200 on polyethylene. It was good in quarter, in quarter 2, with a $249, $150, and even polypropylene went a little bit up. There are several, several reasons for this why we can give also the, this guidance. There's, there is, of course, no, no guarantee that this is on month-on-month basis, always over the, the, the guidance. It's a guidance over the, over the cycle. There is a different reason, right? That would be elaborated already several times. It's a technology. We have a, we have a good technology, a post unique technology, that we can produce differentiated products. We have a good innovation capability. The, in the differentiated products, we going into markets, we, we said the durable markets, it's more-- It's around 40% of the sales. This is pipe, and it's also the, the wire and cable business. In the packaging, we go in agriculture, healthcare, and, and these elements, we try to differentiate, so that these products don't go so fast down with the market as the commodity prices go down. On the other hand, when the price goes up, also these products go a little bit slowly up than perhaps the commodity prices. They are not so volatile. This is the reason why, over the cycle, we can also keep these, keep these premiums available. The second is, we have also on our innovation portfolio, we have in 2022, and now looking forward, 2023, around 20%-25% of our products are new products. When a product is end of life, we come with a new innovation, right? Sometimes it's incremental improvement, sometimes it's step change improvement, just to keep this differentiation high. You have the regional setup. We can also decide a little bit tactically in which regions we are shipping our material where we get the higher, the higher price levels. With this development based on the technology, based on how we go into the market with the direct sales and the logistic capabilities, then at the input we have, we can achieve these, these premiums. You look a little bit in quarter, quarter three, I have to say now, the price is coming up a little bit on the commodity side. You will see a little bit of compression on the premium in this time, because we need to then catch up also on the prices, on the differentiated and the specialty prices. That takes a little bit, bit longer than to catch up again. Over the cycle, we can, we can keep this, this, this premium. I hope that answered the question. Thank you. I think for the second question with regards to the ethylene exportation versus the sending it to the downstream, I think we are believing that we are a margin and value driven. Whatever the ethylene molecules are available, our target to maximize towards the PE and PPs. Looking to our reliability enhancement program, where we can be improving that in quarter two, that both PE and PP are at 110% and 99% respectively, our aim is to maximize it, all the ethylene molecules toward the PEs and PPs. That can generate more value and can generate more margin, rather than exporting. Looking to the coming quarters, with the very successful completion of our recent Borouge 2, I think, and I believe that our PEs and PPs downstream can sustain the high reliability, which can convert all the ethylene molecules to the PEs and PPs. Thank you. Thank you very much. Thanks, Ricardo. Our next question comes from Prateek Bhatnagar from HSBC. Your line is now open. Please go ahead. Yeah, thanks for taking my question. I have three. The first one is basically on demand. Are you seeing any improvement in demand from China on polyolefins? The second is basically on, for modeling purpose. Going forward, should we assume that your Olefin Conversion Unit would continue to operate at 100% of the capacity? That's the second question. Third one is the elephant in the room on the ADNOC, Borealis merger. Has there been any consultation with you on this? We've seen your past announcement, has there been any development in terms of consultation with you on the merger? Thanks. Thank you, sir. The first question, to Rainer on. Yeah. On demand, and the second one, olefins, to, to Hasan, please. Converting of olefins, then I will take the last, the last question. Let's take the first question. Give a little bit, perhaps not only on demand, a bit, a market update. First of all, obviously, of course, what you also see that the global economy remains soft. Third, inflation, high interest rates up. When you look also at the PMI indices globally, right? The two manufacturing PMI they showed in the US, in Eurozone, also in China and APAC, they are still in contraction. Still, when you look at the activity on Borouge core regions, the markets, they are better than the others, but still soft, third, and slower than expected. China is recovering slower. The economy data falls short also on expectation with the PMI index on the 49, weak growth. This is accompanied also with the uncomfortable inflation in the world, what I said, and this limits then the export activities in China, with impact also on Southeast Asia. The consumer spending is still relatively cautious in China. China pledged some, some consumer stimulus to boost the consumer spending. Nevertheless, there is still some reservation of the stimulus impact in the, in the second half year. We don't see yet a really big bang stimulus package out in the market for the time being. The expectation is that on the demand side, it's a, it's a very slow, it's a slow growth, right? Slower than, than, what we, what we would have expected. But it's still, it's still growing a little bit. On the, this has, of course, then a bit an impact, had an impact on the, on the price side, a combination with feedstock. What we have seen in the last couple of months is then the prices came down. We see a bit, a dip on prices now in July. Going, going forward, oil coming up a little bit, naphtha coming up a little bit, propylene coming up a bit, propane coming up a bit. You will see, I think that the dip is should be released in July, coming up from a price side a little bit, but not too much, right? This will, as I said, right, they're volatile in a relatively narrow band. The marginal producer coming under pressure now because the feedstock prices are getting too high, you will see some stepping out of production, right? This helps pricing, ramping up a little bit, but as soon as they, they are, are up, then they start producing again, and it's coming down. It has, it has its limits. We, we are quite cautious. It is not a step change, demand growth to be, be expected. The supply remains healthy, so we, we bet on our capability, on the differentiation, how we were setting up, our, our, marketing and then sales organization and our logistics, combined with a good production, that we, that can keep the volume stable and, that we still over the cycle, generating the premium. That's a little bit the, an overall market perspective. Thanks, Rainer. I think for the second question with regard to the OCU maximization, the target for Borouge is to maximize the OCU in order to produce the propylene internally, which can push back any external propylene. Looking forward for the, our OCU reliability, which we are at more than 96%, that would, and with the available ADNOC Gas ethane, will ensure that the OCU for the next quarters will be at maximum capacity till the end of the year. Thank you. Thank you, Rainer and Dr. Hasan. In regards of Borouge and Borealis, these discussions are currently being carried out between our major shareholders, ADNOC and Borealis, major shareholders, OMV. Borouge will make the necessary disclosures to the market if and when required, in full compliance with the regulatory obligations. Any final decisions will be subject to the governance processes of Borouge and other relevant parties involved. This is what we would like to communicate for now. Thanks, Prateek. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. Our next question is from Shadab Ashfaq from Al Ramz. Please go ahead when you're ready. Hello. Thank you for the presentation. My first question is regarding the Chinese market. Currently, the recovery in China is lower than what it was expected. At the same time, as the recovery will improve, the Chinese capacities are coming online. How will it play out that your B4 is also coming? Will it give it oversupply, or the demand is sufficient to cater all this thing? On the second question, in the international expansion. Is the company exploring any international opportunities? Because over the next two years, we are looking that already the utilization is close to 100%, and the new capacity will be added in 2025. For the next two year, we are not expecting any significant increase in the capacity. Is the company looking at international expansion to give an inorganic jump in the volume? Thank you. Thank you, Shadab. Rainer, you can take the first one, I'll take the second one. ... so as, as said, right, so if you look at the, at the short term, right, there was significant capacity coming on stream, specifically also on, on China. Polyethylene was also in the, in the, in the U.S. This way will continue still this year, right, coming still a bit next year, and then it's slowing, it's slowing down. With this, I have to agree that the op- with the, combined with the demand operating rates were coming down, and it puts pressure on the market. This is what you'll see also out on the, on the price side versus last year, same period. It's a significant difference. Towards 2024, I think, we need to still accept that there will, will be a, will be a, a stretch year, right? End 2024, beginning 2025, the operating rates start to, to get, to get better. In, in the, in the, in the longer run, right, on the, on the next couple of years, this is, this will be a good industry to be, to be in and further to be in. The Borouge 4, I always said, in 2026 is, is coming, it's coming to the right time, right, where the demand is, is, is there, and supply is not sufficient to, to satisfy the demand. Overall, over the cycle, I think it's good. Short term, it will be a stretched market. Thank you. And just on, the question on international expansion, I think we made a statement, on, on this. Basically, we in Borouge, we continue, we continue to explore growth opportunities through international expansion, as mandated by our board of directors. Thank you. Sure. Thank you. Our next question comes from Aafiq Nafani from International Securities. Your line is now open. Please go ahead. Hi. Good afternoon. Thanks for taking my question. Just want to understand the overall motivation behind this potential Borealis and Borouge merger. I know this, this is something being dealt by ADNOC directly, but what is the idea behind it, and what benefits are the managements looking at? Will Borealis have access to cheaper ethane? Is it even possible to ship it that far? If it's in terms of synergies, then what kind of synergies can we potentially see, considering that, you know, the operations are continents apart? Just an overall idea on how this entire thing could pan out would be very helpful. Thank you. Thank you, sir. I wish I can give more details on this question, but, as, we made a statement, this is, still, under discussions, and, we will be definitely, to share with you, more details, in the, in the, in the due time, that we feel there is, clear more, details to be shared. Thank you. Thank you. We have no further questions registered at this time. With that, I will hand back to Hazeem Sultan Al Suwaidi, CEO, for final remarks. I just would like to thanks, everyone engaging with us in this, Q2 earnings results. Looking forward to, to see you and hear from you, inshallah, in the near future. Thank you.