Photo: www.mphc.com.qa
The Board of Directors of Mesaieed Petrochemical Holding Company (MPHC) yesterday recommended a cash dividend distribution of QR0.6 (60 dirhams) per share, equivalent to a total payout of QR754m, representing 76 percent of the group’s net profit of QR994.6m for the year 2016.
The QSE-listed MPHC, is a subsidiary of Qatar Petroleum and one of the region’s premier diversified petrochemical conglomerates with interests in the production of olefins, polyolefins, alpha olefins and chlor-alkali products. The Company announced its financials for the year ended December 31, 2016.
MPHC reported an earnings per share (EPS) of QR0.79 for the year ended December 31, 2016, posting a decline in profits of QR92.5m, or 8 percent, compared to a net profit of about QR1.08bn with an earnings per share of QR0.87 during the previous year.
The year-on-year decrease was due to the decline in selling prices by 7 percent despite improved sales volumes in the midst of a challenging market. This reduction was partially offset by the cost savings arising from the cost optimization initiatives undertaken by the group. These initiatives have resulted in improvement in many operating areas and the achievement of an overall cost savings of 6 percent from the 2016 budget.
The group’s profit was also aided by a tax refund of approximately QR89.8m booked during the year. The group continued to benefit from the supply of competitively priced ethane feedstock and fuel gas under long-term supply agreements. These contractual arrangements are an important value driver for the group’s profitability in the current challenging market conditions. The closing cash position as on December 31, 2016 after distribution of the previous years’ dividend of QR854m, was a robust QR1.08bn. The total assets as on December 31, 2016 was QR14.4bn, compared to QR14.3bn as on December 31, 2015.
2016 was a crucial year as the group continued to excel in a highly volatile and competitive environment. The group witnessed significant instability in selling prices as the product prices declined by 7 percent on an average compared to the previous year on account of the plunge in global crude oil prices.
However, the product prices recovered in November and December of 2016 following the recent uplift in crude oil prices. The financial and operational results were commendable despite the fluctuation in prices, and exceeded the group’s budget.
With the successful completion of the periodic turnaround in some of the plants in the previous year, the production and sales volumes witnessed a significant improvement during the year.
