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DOHA: Petrochemicals and metals company, Industries Qatar (IQ), posted a net profit of QR6.7bn for the nine months period ended September 30, 2012 in comparison to a net profit of QR6.2bn for the corresponding period last year.
IQ, one of the region’s industrial giants with interests in the production, distribution and sale of a wide range of petrochemical, fertiliser and steel products, recorded revenue of QR14.2bn for the period.
“The group has continued its record-breaking year by registering its highest-ever revenue for the first nine months of the year, eclipsing the previous high registered for the same period of 2008, and an impressive 13.5 percent improvement on the same period of 2011,” H E Dr Mohammed bin Saleh Al Sada (pictured), the Minister of Energy and Industry and Chairman and Managing Director of Industries Qatar, said.
“And, further positive results are expected following the recent launch of LDPE-3 and further ramp-up of Qafco 5 and 6,” he said.
Elaborating on the group’s revenues. Abdulrahman Ahmad Al Shaibi, Chief Coordinator at IQ, said: “Despite the tough global economic conditions and faltering demand witnessed in key trading partners, the group still maintained its overall production utilisation1 level at over 100 percent, and in booking revenue of QR14.2bn recorded its highest ever revenue for the period ending September 30. This serves to emphasise the group’s competitive cost position, robust demand for its products and geographically dispersed market footprint.
“Revenue improved on the same period of 2011 by QR1.7bn, or 13.5 percent, and in the second quarter by QR440.7m, or 9.4 percent. This robust performance was primarily driven by significantly improved fertiliser volumes following the launch and initial ramp-up of Qafco 5 and 6.”
Petrochemical revenue in the first nine months of the year was QR4.8bn, marginally down by QR0.1bn, or 1.7 percent, against the same period in 2011. The segmental performance was primarily impacted by weak year-to-date LDPE prices and lower sales volumes registered by the group’s fuel additives joint venture. The fuel additive volumes were impacted by a loss of 83 days to major shut-downs in the first half of the year .
The fertiliser segment closed the first nine months of 2012 with revenue of QR4.6bn, up QR1.4bn, or 44.5 percent, on the same period last year. The segment’s year-on-year performance was due to the combined effect of incremental ammonia and urea volumes, and strongly positive urea price inflation. Following the commercial launch of Qafco 5 and 6, ammonia and urea volumes increased on the same period of 2011 by 24.1 percent and 42.1 percent respectively, and the segment recorded an annual volume variance of QR1.3bn.
Against the second quarter of 2012, segmental revenue was up by QR0.5bn, or 31.7 percent, with a sharp increase in ammonia prices and incremental urea volumes from the initial ramp-up of Qafco 5 and 6 being the main contributors. Year-to-date steel revenue was QR4.8bn, an increase of QR 0.3bn, or 7.7 percent, on the same period last year, and down QR0.1bn, or 5.6 percent, over the second quarter of 2012.
On earnings performance, Al Shaibi said: “The group recorded its second highest profit ever, with year-to-date net profit of QR6.7bn. This was broadly in line with budgeted expectations, and was primarily boosted by improved fertiliser volumes following the launch of Qafco 5 and 6. The fertiliser segment is now the group’s main profit contributor, accounting for circa 40 percent of net profit and EBITDA.”
Net profit for the first nine months of 2012 showed an increase of QR0.4bn, or 6.6 percent, against the same period of last year. EBITDA for the period ending September 30, 2012, was QR7.6bn, an increase of QR0.8bn, or 11 percent, on the same period last year, and third quarter EBITDA was QR3bn, an increase of QR0.5bn, or 20.4 percent, on the second quarter.
The year-on-year EBITDA improvement can be attributed to improved group volumes, most notably ammonia and urea, lower iron ore costs and higher urea, methanol and MTBE prices.
However, results were negatively impacted by a number of factors, including generally weak product prices, losses from two of the group’s steel associates , a provision for a minor natural gas contract revision, losses in one of the fertiliser company’s subsidiaries and annual wage and salary inflation exacerbated by the enactment towards the end of 2011 of state-mandated increases in salaries for Qatari nationals
“The group is poised to successfully complete all of its major financial, operational and strategic goals for 2012.” Al Shaibi said.