Industries Qatar (IQ) has reported a net profit of QR2.7bn for the three-month period ended 31 March 2022, representing an increase of 87 percent compared to first quarter (Q1) of 2021.
Revenue for first quarter (Q1) of 2022 significantly improved by 69 percent to reach QR7.1bn as compared to QR4.2bn reported for Q1-21. Earnings per share (EPS) for Q1-22 was QR0.45, versus QR0.24 for the same period last year. EBITDA for Q1 increased by 67 percent versus Q1-21 and reached QR3.2bn, while EBITDA margin for 1Q-22 arrived at 46 percent.
Group’s operations remained strong as production volumes for the quarter improved by 5 percent to reach 3.9 million MT’s in comparison to 1Q-21, while 9 percent growth was noted in comparison to 4Q-21. Growth in production volumes was mainly driven by multiple factors including the Group’s recent decision to restart one of the previously mothballed DR-2 facility with a larger capacity, while mothballing previously operational DR-1 facility with lower capacity. This decision was made to improve the overall efficiencies on account of raw material mix and offer opportunities to sell excess capacities of DR directly in the market.
Additionally, the Group had higher number of operating days during 1Q-22 compared to 1Q-21 and 4Q-21, as there were relatively lower number of planned and unplanned shutdowns reported during the current period. Plant utilization rates for the quarter reached 95 percent, while average reliability factor stood at 97 percent.
Group’s financial performance for the quarter in comparison to the same period of last year was largely attributed to multiple factors.
Blended product prices significantly surged by 55 percent versus Q1-21 and reached $747/MT. Growth in product prices translated into an increase of QR2.8bn in Group’s net earnings. Sales volumes for the quarter increased by 9 percent versus the same period of last year, primarily driven by higher plant operating rates, leading to improved production volumes.
Group operating cost increased by 59 percent versus same period last year.
Group’s financial position continue to remain robust, with cash and bank balances at QR12.6bn as of 31 March 2022, after accounting for a dividend payout relating to the financial year 2021, amounting to QR6.0bn. Currently, the Group has no long-term debt obligations.
Group’s reported total assets and total equity reached QR38.8bn and QR36.2bn, respectively, as of 31 March 2022. The Group generated positive operating cash flows1 of QR2.8bn, with free cash flows1 of QR2.6bn during first three months of 2022.
Petrochemicals segment reported a net profit of QR673m for the three-month ended 31 March 2022, up by 11 percent versus the same period of last year. This notable increase was primarily linked to improved product prices owing to better macroeconomic dynamics.
The performance of the segment was also aided by higher production volumes as the segment’s fuel additive operations were on a commercial shutdown during 1Q-21. This was partially offset by slightly lower production volumes from polyethylene facilities.
Blended product prices for the segment improved by 18 percent versus last year, against the backdrop of firm demand and higher energy prices, coupled with supply deficits. Sales volumes have improved by 13 percent compared to Q1-21, inline with the growth in production volumes. Growth in selling prices combined with higher sales volumes, led segmental revenue for Q1-22 to reach QR1.8bn, with an improvement of 33 percent versus same period of last year.
Fertilizer segment reported a net profit of QR1.7bn for the three-month period ended 31 March 2022, with an increase of 194 percent, versus the same period of last year. This increase was primarily driven by growth in revenue. Segment’s revenue grew by 147 percent for the quarter versus the same period of last year, primarily due to improved selling prices. Selling prices improved significantly by 113 percent versus the same period of last year and reflected positively on the segmental performance.
Steel segment reported a revenue of QR1.3bn, and net profit of QR261 million, moderately up by 6 percent and 1 percent versus 1Q-21, respectively. Segmental profit significantly increased by 199 percent versus 4Q-21, mainly on account of higher sales volumes. Sales volumes have improved significantly during current quarter, as the segment restarted DR-2 facility during 1Q-22, as against DR-1 which was operational until the end of 2021. DR-2 has a production capacity of 1,500k MT’s per annum compared to DR-1 that has an annual capacity of 800k MT’s per annum. Switch in mothballing of facilities would provide an opportunity of approximately 400k MT’s of DR per annum to be sold directly in the market.
Industries Qatar will host an IR Earnings call with investors to discuss the latest results, business outlook and other matters on 26th April 2022 at 12:00 pm Doha Time.
