DOHA: Industries Qatar announced yesterday net profit of QR1.3bn for the quarter ended March 31, 2018 and earnings per share (EPS) of QR2.10, compared to net profit of QR0.9bn and EPS of QR1.53 for the corresponding period of 2017.
Higher product prices versus last year, stable sales volumes, and continued focus on cost management were the driving factors of this commendable performance, said Industries Qatar which is one of the region’s industrial giants with interests in the production of a wide range of petrochemical, fertilizer and steel products.
“Net Profit for the year ended March 31, 2018 was QR1.3bn, a significant increase of QR0.3bn, or ~37 percent, on the prior year. Improved prices and sales volumes versus the last year were the driving forces behind the increased earnings,” Industries Qatar said.
The group’s sales volumes have moderately improved on last year amidst a number of planned and unplanned shutdowns in some facilities. Polyethylene sales improved through higher production, as the segment was on an extended unplanned shutdown during the first quarter of 2017. Recovery in the global demand has aided the group’s fertilizer segment, while the sales of steel products improved due to the change of geographical mix.
Product prices across most segments have moderately elevated on last year. Polyethylene prices have continued their recovery and have started to stabilize while fuel additive prices have improved notably on last year. The stability of crude oil prices has supported both polyethylene and fuel additive prices to remain strong.
Fertilizer prices as well have shown a modest rise driven by tightening of supplies, and a general recovery in demand. Steel prices have soared compared to the previous year and previous quarter. Increase in raw materials costs and short supply of some consumables were the key factors that contributed to the increase in the steel prices.
The group’s financial position remains solid as cash across the group stands at QR8.8bn after paying 2017’s dividend of QR3bn, and periodic debt payments amounting to QR0.1bn. Total debt across the group now stands at QR0.4bn, down from QR0.5bn as at December 31, 2017.
Revenue reported under IFRS 11 for the period ended March 31, 2018 was QR1.4bn, up significantly on last year. A significant price uptick in the group’s steel products was the contributing reason for this notable increase in the revenue.
On the other hand, on a like-for-like basis, management reporting revenue — assuming proportionate consolidation — was QR4bn, a moderate increase over 2017. Both prices and volumes were the driving factors contributing to this increase.
The group has signed an offtake agreement with Qatar Chemical and Petrochemical Marketing and Distribution Company, (trading as Muntajat) to market, sell and distribute the group’s steel products with effect from May 1, 2018.
The group expect to benefit significantly from this arrangement via realizing greater synergies, cost improvements, and access to a wider geographical network. With this agreement, Muntajat assumes the sole responsibility of marketing the group’s entire sales volumes.
