Doha: Mesaieed Petrochemical Holding Company (MPHC), yesterday announced a net profit of QR1.0bn for the six-month period ended June 30, 2022, showing an increase of 14 percent compared to QR909m in 1H-21.
Group revenue improved by 10 percent to reach QR2.1bn, as compared to QR1.9bn for 1H-21. Earnings per share (EPS) amounted to QR0.083 for the six-month period ended June 30, 2022, compared to QR0.072 for 1H-21.
EBITDA for the current period amounted to QR1.2bn with an increase of 12 percent versus 1H-21, mainly due to improvement in revenue along with contained operating cost. EBITDA margins for 1H-22 reached 59 percent versus 58 percent achieved during 1H-21.
Liquidity remained robust with cash and bank balances standing at QR3.5bn as at June 30, 2022. Total assets as at June 30, 2022 amounted to QR17.1bn and total equity amounted to QR16.7bn as at June 30, 2022.
Compared to 1Q-22, MPHC revenue increased by 17 percent, while net profit increased by 34 percent. Key contributor towards the improvement in revenue and net earnings was mainly linked to better sales volumes which increased by 13 percent, amid higher plant operating rates, as the first quarter’s volumes were affected by the large-scale turnaround carried out at Q-Chem’s facilities.
Selling prices also inched higher during 2Q-22 with a growth of 4 percent noted compared to 1Q-22, on back of persistently higher energy prices and supply side constraints, despite recent demand related concerns.
Macroeconomic environment remained uneven during the first half of 2022, where demand for certain downstream products slightly inched downward mainly due to China’s COVID linked lockdowns and cautious approach from buyers. On the other hand, supply side was affected by Russia-Ukraine conflict enforcing sharp rise in energy prices challenging plant economics specially for the European producers.
On an overall basis, commodity prices were essentially balanced during 1Q-22, except for NAOs and caustic soda, where strength was noted on the back of elevated end-product prices.
During Q2-22, despite uncertainties over recessionary fears, prices slightly improved on back of persistent higher energy prices and supply side constraints. Price trajectories on a year-on-year basis, remained elevated underpinned by better economic activity, resilient consumer spending, higher industrial output, robust GDP growth and limited supply. MPHC’s operations continue to remain robust and resilient with total production for the six-month period reaching 548 thousand MTs. Current six-month period’s production volumes declined by 7 percent versus 1H-21, mainly due to a large-scale turnaround carried out at Q-Chem’s facilities during 1Q-22.
On a quarter-on-quarter basis production volumes for 2Q-22 increased by 24 percent in comparison to 1Q-22, as the first quarter’s volumes were affected by the large-scale turnaround carried out at Q-Chem’s facilities.
During the period, average blended product prices increased by 18 percent compared to 1H-21, translating into an increase of QR324m in MPHC’s net earnings, as compared to 1H-21. Firm product demand supplemented by supply constraints resulted in improved commodity prices. Sales volumes decreased by 7 percent versus 1H-21, mainly driven by lowered plant operating rates, amid large scale turnaround carried at Q-Chem facilities during 1Q-22. Decline in sales volumes translated into a decrease of QR134m in MPHC’s net earnings.
Petrochemicals segment reported a net profit of QR665m for 1H-22, up by 2 percent versus 1H-21. This marginal increase in profitability was primarily driven by marginal growth in segmental revenue which increased by 1 percent, as higher selling prices were offset by lowered sales volumes.
Segmental sales volumes declined by 12 percent on a year-on-year basis, as the segment carried out a large-scale turnaround at Q-Chem facilities during 1Q-22, and also affected segment’s production volumes which declined by 13 percent. On the contrary, product prices improved by 14 percent and offset the negative impacts relating to lowered sales volumes to an extent. Selling prices improved mainly on account of continued momentum from positive macro-drivers carried from latter part of last year.
On a quarter-on-quarter basis, segmental profits significantly improved by 70 percent, mainly linked to higher sales volumes noted during 2Q-22 which grew by 27 percent versus 1Q-22.
Also, average selling prices improved by 5 percent, mainly on account of higher HDPE prices which increased by 9 percent, as well as NAO prices which increased by 8 percent versus 1Q-22.
Chlor-alkali segment reported a net profit of QR356m for 1H-22, increased significantly by 41 percent compared to the same period of last year. This notable growth was primarily driven by a significant improvement in blended average selling prices, which increased by 32 percent versus 1H-21, complemented by strength from end-product industries (alumina/ aluminium, PVC, and others). Sales volumes remained flat compared to 1H-21. On overall basis revenue grew by 32 percent within the segment. Production volumes marginally rose by 2 percent versus 1H-21.
On a quarter-on-quarter basis, profitability declined by 11 percent mainly on account of lower segmental revenue which declined by 8 percent versus 1Q-22. Decline in revenue was mainly linked to lower selling prices realised during 2Q-22 and a shortfall of 6 percent was noted in selling prices versus 1Q-22. Negative movement in selling prices was mainly due to lower EDC and VCM prices, amid lowered end-product prices. However, caustic soda prices continue to remain elevated.
Also, sales volumes marginally declined by 2 percent versus 1Q-22, on account of subdued product demand. On the other hand, production volumes increased by 9 percent during 2Q-22 in comparison to 1Q-22, amid better plant operating rates achieved during 2Q-22.
MPHC will host an IR earnings call with investors to discuss its results, business outlook and other matters on August 15, 2022 at 1:30pm Doha Time. The IR presentation that accompanies the conference call will be posted on the ‘financial information’ page within the Investor Relations section at MPHC’s website.
