DOHA: Industries Qatar (IQ), one of the region’s industrial giants with interests in the production of a wide range of petrochemical, fertiliser and steel products, recorded a net profit of QR3.8bn for the financial period ended September 2018, a significant 62 percent jump from QR2.4bn posted a year ago.
IQ’s earnings per share stood at QR 6.32 compared to QR3.90 reported for the corresponding period of the previous year. The results are also well ahead of the group’s budget expectations for 2018.
IQ’s healthy growth in net profit was driven by a combination of factors including increased product prices, a moderate growth in sales volumes, efficiently managed operating assets base and the group’s continuous efforts towards optimising operations and costs.
The year-on-year moderate improvement of sales volumes was partially due to higher polyethylene production, as the polyethylene facilities were on an extended unplanned shutdown during the first nine months of 2017, specifically during Q1, 2017.
Additionally, stable global demand has aided the group’s fertiliser segment to maintain its sales volumes, while the sales of steel products improved due to the change of geographical mix and the steel marketing strategy.
Product prices across most segments have moderately increased versus the same period of 2017. Polyethylene prices have started to stabilise and grow while fuel additive prices have improved notably compared to last year. The stability of crude oil prices has supported both polyethylene and fuel additive prices to remain strong throughout the current year.
Fertilizer prices have shown a modest rise driven by a tightening in global supplies, and a general recovery in demand. Steel prices continue to remain robust with prices in the current year has steadily risen.
Increase in raw materials and other related costs, resurgence of demand in some geographies were the key factors that contributed to the increase in the steel prices.
The group’s financial position continue to remain solid as cash across the group stands at QR12.1bn after paying 2017’s dividend of QR3.0bn, and periodic debt payments amounting to QR0.3bn. Total debt across the group now stands at only
QR0.2bn, down from QR0.5bn as at 31 December 2017. Revenue reported under IFRS 11 for the period ended September 30, 2018 was QR 4.6bn, significantly up by ~43.6 percent on last year.
This revenue growth is largely attributable to a moderate improvement in sales volumes due to the change of sales mix, marketing strategy and increased selling prices.
On the other hand, on a like-for-like basis, management reporting revenue — assuming proportionate consolidation - was QR12.3bn, a significant increase of 24 percent over 2017. This increase was due to the combined effect of improved prices and volumes versus the previous year.
