Doha, Qatar: Industries Qatar (“IQ” or “the Group”; QE Ticker: IQCD), yesterday, reported a net profit of QR4.7bn for the year ended 30 December2023, representing a decline of 46% compared to last year.
Earnings per share (EPS) for YE-23 was QR0.78 versus QR1.46 for YE-22. Group revenue for YE-23 declined by 34%to reach QR16.9bn as compared to QR25.8bn reported for YE-22.
Commenting on the Group’s financial and operational performance for the year, H E Saad Sherida Al Kaabi, Chairman of the Board of Directors, said: “Despite the challenges faced this year in a challenging global economic climate, Industries Qatar demonstrated remarkable resilience. Our focus on operational excellence and HSE, coupled with our strength in the global supply chain, contributed to a seamless operational performance for IQ.
As we present our commendable operational and financial performance for 2023, I extend my sincere thanks to the Board of Directors, Chief Executive Officers, senior management and all the employees of QAPCO, QAFAC, QAFCO and Qatar Steel, without whom we would not have achieved these results.
Going forward, we will continue to thrive for operational excellence, by focusing on our human capital and environment, along with responsible growth and creating long term value for our shareholders.”
In 2023, economic uncertainty continues to persist, bringing challenges to global supply and demand dynamics for most commodities.
These factors, consequently, contributed to a general downward trajectory in the trends of commodity prices compared to the previous year. Muted consumer spending significantly affected the demand for most commodities across our product portfolio.
On a quarter-on-quarter basis, production volumes declined by 7% versus 3Q-23, with fuel additive, fertilizer and steel segments undergoing shutdowns during Q4-2023.
Group’s financial performance for the year ended 31 December 2023was largely attributed to product prices, sales volumes and operating cost.
In 4Q-23, the Group’s net earnings inclined by 19% compared to 3Q-23, reaching QR1.4bn. This notable increase was mainly due to one-off reversal of impairment of non-current asset within steel segment, which contributed QR550m positively to the net profit. On the other hand, the increase in selling prices was fully offset by higher operational costs, and lower sales volumes on account of lower production amid planned shutdown during the quarter.
Group’s financial position continue to remain robust, with cash and bank balances stood at QR15.8bn as of 31 December 2023,after accounting for a dividend payout relating to the financial year 2022 amounting to QR6.7bn. Currently, the Group has no long-term financial debt obligations.
Group’s reported total assets and total equity reached QR43.1bn and QR40bn, respectively, as of 31 December 2023.The Group generated positive operating cash flows of QR5.4bn,with free cash flows of QR2.7bn during YE-23. The petrochemicals segment reported a net profit of QR1.4bn for YE-23, down by 45% versus YE-22. The decrease was mainly linked to a decline of 26% reported in segmental revenues, which was mainly affected by lower blended average selling prices and sales volume realized during YE-23.
Fertilizer segment reported a net profit of QR1.9bn for YE-23, with a significant decline of 65% versus YE-22. This decline was primarily driven by lowered segmental revenue. Segment’s revenue decreased by 49%in line with lowered selling prices which declined by 47%, amid macro-challenges affecting nitrogen-based fertilizer markets globally driven by easing of supply challenge and softening of demand.On the other hand, sales volumes marginally decline by 3% versus YE-22 amid lower production on account of lower operating rates.
The steel segment achieved a net profit of QR1bn, marking a significant 16% increase compared to the previous year. This significant increase can be primarily attributed to the increase in non-operating income related to reversal of impairment on non-current assets, specifically related to DR-2 facility that was previously mothballed and restarted in 2022. Furthermore, the additional reversal of impairment in Foulath investments also contributed to the positive financial performance of the steel segment.
After reviewing Group’s current year financial performance, with present and potential liquidity position, and considering the current and future macroeconomic conditions, business outlook, CAPEX, investing and financing requirements of the Group, the Board of Directors proposed a total annual dividend distribution of QR4.7bn for the year ended 31 December 2023, subject to the approval of General Assembly, representing a payout ratio of 100% of current year’s net earnings. A dividend of QR0.78 per share represent a dividend yield of 6% on the closing share price as of 31 December 2023.
Industries Qatar will host an Earnings call with investors to discuss the latest results, business outlook and other matters on Monday, February12, 2024 at 1:30 pm Doha time. The IR presentation that accompanies the conference call will be posted on the ‘financial information’ page within the Investor Relations section at IQ’s website.
