Industries Qatar (IQ) has reported a net profit of QR928m for the first quarter of the current financial year ended March 31, 2017 (Q1,2017), up significantly compared to the corresponding period last year. The surge in profit was attributed to recovery in product prices together with reduced operating costs.
IQ is one of the region’s industrial giants with interests in the production of a wide range of petrochemicals, fertilizer and steel products.
The group’s overall financial and operational performance notably improved year-on-year and quarter-on-quarter. The year-on-year improvement was primarily due to a recovery in the product prices, as the first quarter of 2016 witnessed significantly lower prices due to the depressed economic environment prevailing at that time.
The quarter-on-quarter improvement was mainly due to the absence of one-off expenses in the current quarter, as the group recognised a few one-off expenses in Q4, 2016.
All segments have reported improved performance, although the performance in some segments, in particular the polyethylene segment was affected due to some unplanned outages. The first quarter’s financial performance far exceeded the group’s budget expectations for the first quarter of 2017.
The group’s financial position, as measured by the asset levels, liquidity and debt position continue to remain strong as cash across the group stands at a solid QR9.9bn after paying 2016 dividend of QR2.4bn. Total debt stands at QR2.8bn, down QR100m versus December 31, 2016 exhibiting the group’s strong leverage position.
This stable financial position reaffirms the group’s ability to withstand tough trading conditions.
The group’s reported revenue under IFRS 11 for the period ended March 31, 2017 was QR1.1bn, marginally down on the same period of last year. This marginal reduction was due to a slight decrease in the sales volumes.
On the other hand, on a like-for-like basis, management reporting revenue (assuming proportionate consolidation) was QR3.4bn, which remained broadly unchanged versus the same period of 2016. The benefit gained from better price realisation was almost offset by a moderate decrease in the sales volumes.
Overall product prices have remarkably recovered versus the first quarter of 2016 while a slight improvement was noted against the last quarter of 2016. Petrochemical prices have demonstrated marked improvement on the same period of last year as the prices remained depressed during Q1, 16.
