Photo: www.mphc.com.qa
Mesaieed Petrochemical Holding Company (MPHC), one of the region’s premier diversified petrochemical conglomerates, reported a net profit of QR135m for the half year ended June 2020 (H1, 20). The first half net profit for 2020 is down by 56 percent, compared to the same period last year. Total revenues reached QR975m, down by 37 percent, when compared to the previous year. The company recorded an earnings per share (EPS) of QR0.011 (11 dirhams) for the first six months of the year, compared to QR0.024 for the same period last year. MPHC’s financial performance was impacted by the deteriorating global macroeconomic uncertainty, slowing GDP growth and trade conflicts, including COVID-19 and volatile oil prices, which continue to weigh on the demand for MPHC products and resulted in declining selling prices, which declined by 24 percent as compared to the same period last year. When compared to the first quarter of 2020, the company’s revenue declined by 11 percent, while net profit increased by 37 percent. Sales volumes improved by 1 percent mainly due to improved production volumes which increased by 33 percent. The company’s liquidity position continue to remain robust with closing cash and bank balances of QR1.5bn for the first half of the year, with total assets recorded at QR15.7bn. Ahmad Saif Al Sulaiti, Chairman of the Board of Directors at MHPC, said: “In spite of distressed market situation, we remained resilient and continued to implement our business strategy to strengthen our market position, while driving cost optimisation programmes and preserving shareholder value.
During the first half of 2020, as planned, we successfully implemented planned preventive maintenance shutdowns within the defined timelines and budget”. Al Sulaiti added that the company also implemented several measures to contain the spread of the COVID-19 pandemic to ensure the health and safety of its manpower and ensure business continuity. “These measures will remain in place until the global economy recovers, and impacts of the pandemic are fully eradicated, in order for us to ensure our businesses continue to remain resilient and maintain its competitiveness,” he said. The petrochemicals segment’s revenue for the first half of the year stood at QR743m, a decrease of 38 percent from previous year. The profit was QR82m, down by 78 percent compared to the same period last year. The revenue was impacted by the drop in sales volumes by 19 percent and selling prices by 23 percent. Production dropped by 22 percent due to the periodic planned turnaround. The chlor-alkali segment reported a revenue of QR232m, a decrease of 34 percent from previous year. The profit was QR5m, a decline of 93 percent from the previous year.
Production dropped by 16 percent due to the periodic planned turnarounds, which is necessary to maintain the plant lives and ensure HSE standards. Given the current sluggish market and macroeconomic outlook due to the spread of COVID-19 pandemic, MPHC has initiated several cost optimisation initiatives. These measures included optimising human capital structures, reducing direct costs in relation to utilities and maintenance, reducing nonproduction related expenditures including corporate and administrative expenses. Similarly, the company reviewed its capital expenditure programmes across all segments and identified expenditures that can either be avoided or deferred, while ensuring HSE standards remained buoyant. MPHC will host an IR earnings call with investors to discuss its H1, 2020 results, business outlook and other matters on August 18, 2020 at 1:30pm Doha Time. The IR presentation that accompanies the conference call will be posted on the publications page of MPHC’s website.
