By Satish Kanady
DOHA: Industries Qatar (IQ), one of the region’s industrial giants with interests in the production of a wide range of petrochemical, fertiliser and steel products, recorded a net profit of QR2.0bn for the first half of 2016.
The revenue reported for the period was QR2.4bn, a moderate decrease of 16 percent, over the same period of 2015. This year-on-year decrease was due to a marginal decrease in the prices of the group’s steel products together with lower sales volumes in line with lower demand and the absence of the sales of certain intermediate steel products in the current year.
“Net profit for the period under review was QR2.0bn with earnings per share of QR3.25, down QR0.5bn or 19 percent against the same period of 2015. This reduction in net profit was exclusively driven by the lower revenues resulting from the notable price deflation across all operating segments most notably in the fertilizer segment”, IQ stated yesterday.
However, profits grew quarter-on-quarter as the group achieved QR1.3bn in the second quarter of the year, a commendable improvement of QR0.6bn on Q1, 2016 or 82 percent driven by the improved sales volumes, better polyethylene prices and reduced operating costs.
The group recorded commendable financial and operational performance across all of its operating segments on the backdrop of a challenging macro-economic environment. All segments within the group operated under tightened market conditions similar to those experienced over the last few quarters where prices of some of the segments experienced severe setbacks — most notably, the prices of fertilisers and fuel additives. Nevertheless the group was able to achieve commendable financial and operating results with notable improvements in both production and sales volumes, significantly exceeding the group’s budget expectations.
Petrochemical prices have continued to recover from their 2015 lows, in line with their close correlation with the crude oil prices whilst the demand for the petrochemical products remained promising with some of the key markets having shown signs of recovery. Together with improved market dynamics and higher polyethylene production, the group was able to improve its sales volumes. The polyethylene production has improved on last year as some of the key facilities were on maintenance during the same period of last year. Fuel additive production, on the other hand was somewhat impacted due to an unplanned shutdown in one of the fuel additive facilities. Fertiliser prices on the other hand remained weak due to a combination of factors including lower production costs, weak demand, weaker currency in some fertiliser exporting countries and planned new capacity additions in some of the key supplier markets. Nevertheless, sales volumes were up on last year in line with higher production driven by lower facility maintenance in the current year.
Prices in the steel segment were also marginally down on the previous year due to muted demand in the regional markets following the decision to reduce capital expenditure, together with the availability of cheap steel from non-GCC producers like China and Turkey. Prices during the current year, however continued to remain stable with minimal quarterly movements. Sales volumes were also down on last year in line with the lower demand and the absence of the sales of certain intermediate products in the current year.
The group’s financial position continued to remain solid with the group holding cash1 in excess of QR 9.3 bn. The total debt amounts to QR3.4bn, down QR 0.4bn versus December 31, 2015.
The Peninsula
By Satish Kanady
DOHA: Industries Qatar (IQ), one of the region’s industrial giants with interests in the production of a wide range of petrochemical, fertiliser and steel products, recorded a net profit of QR2.0bn for the first half of 2016.
The revenue reported for the period was QR2.4bn, a moderate decrease of 16 percent, over the same period of 2015. This year-on-year decrease was due to a marginal decrease in the prices of the group’s steel products together with lower sales volumes in line with lower demand and the absence of the sales of certain intermediate steel products in the current year.
“Net profit for the period under review was QR2.0bn with earnings per share of QR3.25, down QR0.5bn or 19 percent against the same period of 2015. This reduction in net profit was exclusively driven by the lower revenues resulting from the notable price deflation across all operating segments most notably in the fertilizer segment”, IQ stated yesterday.
However, profits grew quarter-on-quarter as the group achieved QR1.3bn in the second quarter of the year, a commendable improvement of QR0.6bn on Q1, 2016 or 82 percent driven by the improved sales volumes, better polyethylene prices and reduced operating costs.
The group recorded commendable financial and operational performance across all of its operating segments on the backdrop of a challenging macro-economic environment. All segments within the group operated under tightened market conditions similar to those experienced over the last few quarters where prices of some of the segments experienced severe setbacks — most notably, the prices of fertilisers and fuel additives. Nevertheless the group was able to achieve commendable financial and operating results with notable improvements in both production and sales volumes, significantly exceeding the group’s budget expectations.
Petrochemical prices have continued to recover from their 2015 lows, in line with their close correlation with the crude oil prices whilst the demand for the petrochemical products remained promising with some of the key markets having shown signs of recovery. Together with improved market dynamics and higher polyethylene production, the group was able to improve its sales volumes. The polyethylene production has improved on last year as some of the key facilities were on maintenance during the same period of last year. Fuel additive production, on the other hand was somewhat impacted due to an unplanned shutdown in one of the fuel additive facilities. Fertiliser prices on the other hand remained weak due to a combination of factors including lower production costs, weak demand, weaker currency in some fertiliser exporting countries and planned new capacity additions in some of the key supplier markets. Nevertheless, sales volumes were up on last year in line with higher production driven by lower facility maintenance in the current year.
Prices in the steel segment were also marginally down on the previous year due to muted demand in the regional markets following the decision to reduce capital expenditure, together with the availability of cheap steel from non-GCC producers like China and Turkey. Prices during the current year, however continued to remain stable with minimal quarterly movements. Sales volumes were also down on last year in line with the lower demand and the absence of the sales of certain intermediate products in the current year.
The group’s financial position continued to remain solid with the group holding cash1 in excess of QR 9.3 bn. The total debt amounts to QR3.4bn, down QR 0.4bn versus December 31, 2015.
The Peninsula
