IQ to expand chemical & petrochemicals businesses

Industries Qatar (IQ), one of the region’s industrial giants with interests in the production of a wide range of products, is working to further expand its operations, especially in the chemical and petrochemical sectors.
“We are currently studying plans for the expansion in future for the chemicals and petrochemicals businesses, which we will announce formally in the days to come,” said Saad Sherida Al Kaabi, Chairman and Managing Director of IQ, addressing questions from the shareholders at IQ’s Annual General Assembly, yesterday.
However, he did not provide any specifics about the Company is planning to invest in the upcoming projects. Commenting on IQ’s capital expenditure and business development, the chairman said that the group will continue to focus essential investments which will enhance reliability, efficiency, competitiveness and quality of the operating asset base. “We will also selectively invest in other capital investment projects, which we believe will increase our competitive position”, he noted.
On project financing, he added the Company is not willing to borrow much, for the reason, it has a strong balance sheet with a lot of cash. “Currently the Company does not have big enough projects that require borrowing.
However, in future if it does, we won’t hesitate.” “Part of the reason why we are able to distribute dividends despite volatile market situation is because we have maintained a good balance sheet. In good times we have given a lot, and in bad times we have still maintained consistency.” Al Kaabi also highlighted that since the group’s incorporation in 2003 to-date, IQ has distributed a total dividend of QR41.9bn, or QR75.5 per share, with an average payout ratio of approximately 61 percent. Moreover, 10 percent bonus shares were issued on two previous occasions. The historical payout ratio of above 60 percent is a clear evidence of the Board’s intention of paying an adequate dividend to the shareholders. “We want to ensure that the Company is in a position to give returns every year to safeguard the interests of stakeholders, specially the small and marginal Qatari shareholders. We want to maintain consistency in dividend distribution instead of big ups and downs,” Al Kaabi reiterated.
The IQ shareholders yesterday approved the Board of Directors’ recommendation to a total annual dividend distribution of QR2.4bn, equivalent to a payout of QR4 per share, representing 40 percent of the nominal share value, for the year ended December 31, 2016.
IQ had reported a net profit of QR3bn, and a net revenue of QR4.7bn (under IFRS 11) for the last financial year ended December 31, 2016 . On a like-for-like basis, management reporting revenue - assuming proportionate consolidation - was QR13.8bn, a year-on-year decrease of about 14 percent.