DOHA: The industrial giant Industries Qatar (IQ) recorded a strong full year earnings of QR8bn for 2013, reflecting the group’s ability to generate strong profits during the difficult international market conditions. The Group’s revenue reached QR5.8bn during the period.
The board of directors meeting recommended a cash dividend of QR11 per share, equivalent to a total payout of QR6.7bn.
In his comments issued to the Qatar Exchange after the group’s first board of directors meeting for 2014,
H E Dr Mohamed bin Saleh Al Sada, Minister of Energy and Industry, Chairman and Managing Director of Industries Qatar, said the IQ closed the year with strong full year earnings of QR 8bn following the record-breaking 2012 results with the second highest net profit on record.”
This year was also noteworthy for two other reasons. Firstly, it marked the first full year of operation for QR12.8bn of petrochemical and fertiliser facilities launched during 2012 which added 2.0 million MT / PA of urea and 240,000 MT / PA of LDPE to the group’s existing capacity. Secondly, the group’s credit ratings with Standard & Poor’s and Moody’s were maintained at AA- and Aa3 respectively in the companies’ annual reviews — placing IQ one notch beneath the State of Qatar’s sovereign rating, and in a very select group of international industrial conglomerates, Dr Al Sada noted.
“These resolute financial results serve to vindicate the previous decisions of the board of directors to invest heavily in improving the efficiency of existing facilities and in expanding capacity, and lend support to the future investment plans as outlined in the recently announced group growth strategy — sustained growth throughout the commodity cycle can only be assured through judicious, yet bold, investment in improving capacity.”
Commenting on the financial results for the year, Abdulrahman Ahmad Al-Shaibi, Chief Coordinator, IQ, said: “The group recorded strong year-on-year sales volume growth following the launch last year of new petrochemical and fertiliser facilities, while also maintaining exceptional petrochemical and steel EBITDA margins. Results, however, were adversely impacted by continued significant fertiliser price deflation, in line with international trends, and heightened fertiliser operating costs following increases in natural gas rates under the supply and purchase agreement with Qatar Petroleum.”
The QR5.8bn revenue shows a decrease of QR 0.3bn, or 5.4 percent, on the restated results of 2012; however, on a like-for-like basis under the previous accounting standard, reported revenue would have been QR19.3 billion, an increase of QR 0.6bn or 3.1 percent.
Revenue in the petrochemical segment for the year was QR5.4bn, an increase of QR0.6bn, or 12.3 percent, versus 2012. The fertiliser segment closed the year with revenue of QR6.1bn, up QR0.1bn, or 2.4 percent, on 2012. The moderate segmental improvement occurred as incremental urea sales volumes following the commercial launch of Qafco 5 and 6 during the second half of the previous year and subsequent ramp-up were largely negated by urea prices continuing their negative trend, in line with international prices, closing 17.9 percent down on 2012. Full year steel revenue was QR5.8bn, a decrease of QR0.3bn, or 5.4 percent, in comparison to 2012.
On the group’s profits and profitability, Al Shaibi said: “The group recorded full year earnings of QR8.0bn, a decrease of QR0.4bn, or 5.1 percent, versus 2012. Although earnings were moderately down on 2012, they still represent the group’s second highest results on record.”
EBITDA was QR 8.2bn, a decrease of QR0.5bn, or 5.1 percent, on the same period last year. “Benefits gained from higher sales volumes following the commercial launches of Qafco 5, 6 and LDPE-3, weak prior year comparatives due to extended fuel additives shut-downs in 2012 and improved operating results at several of the group’s local and regional investments, were offset by general price weakness and increased fertiliser and, to a lesser extent, petrochemical, operating costs”.
The QR8bn net profit showed a decline of QR 0.4bn or 5.1 percent compared to the same period in 2012. Significant incremental depreciation and finance charges following the capitalisation of the new fertiliser and petrochemical assets in 2012 accounted for the additional movement in net profit vis-à-vis EBITDA.