Industries Qatar (IQ), one of the region’s industrial giants with interests in the production of a wide range of petrochemical, fertilizer and steel products, announced yesterday its financials for the last financial year ended December 31, 2016 reporting a net profit of QR3bn.
Full year revenue reported under IFRS 11 was QR4.7bn, a decrease of about 11 percent compared to the previous year (2015). The year-on-year decrease was driven by a combination of factors, including weaker product prices together with marginally lower sales volumes due to a reduction in the sales of some of the intermediate products.
On the other hand, on a like-for-like basis, management reporting revenue - assuming proportionate consolidation - was QR13.8bn, a year-on-year decrease of about 14 percent .
IQ in a statement said that this variance was largely due to a general decrease in the product prices across all segments, most notably in the prices of fertilisers and fuel additives. The reduction in the selling prices has affected the group revenue to the extent of about QR1.9bn. Sales volumes however remained broadly flat on last year. The improved sales volumes in the polyethylene segment was broadly offset by the lower sales volumes in the fuel additives segment.
Net profit for the period under review was QR3bn, translating to an earnings per share (EPS) of QR4.9, down about 34 percent compared to the EPS of QR7.4 in 2015. This reduction was driven primarily by the lower revenues on account of a notable price deflation across all operating segments, and most notably in the fertilizer and fuel additives segments, and a number of other non-recurring one-off expenses primarily relating to the impairment of about QR400m at the fertiliser joint venture.
The impact of the price reduction on the group’s profit was partially offset by the improvement in the operating costs due to the benefits realised on account of ongoing cost optimisation initiatives.
The group’s financial position continued its solidity with cash and bank balances reaching a record high of QR11.3bn across the group; an increase of QR700m on December 31, 2015. The group’s total debt amounts to QR2.9bn, down QR800m versus December 31, 2015. The improved financial position has resulted in a notable improvement in the group’s liquidity position and debt metrics.
Realizing the State’s vision of sharing part of the wealth generated in the oil and gas segment with its citizens, the Board of Directors has supported, and continues to support, a rational and prudent dividend payout practice that balances the needs and aspirations of shareholders while maintaining adequate liquidity within the group for actual and potential investment requirements, debt obligations and unexpected adverse trading conditions.
Taking the above factors into consideration, the Board of Directors has proposed a total annual dividend distribution for the year ended December 31, 2016 of QR2.4bn, equivalent to a payout of QR4 per share and representing a payout ratio of 82 percent .
Reported results for the year are being considered highly commendable given the challenging macro-economic and competitive environment in which the group was operating under during 2016.
