DOHA: The Mesaieed Petrochemical Holding Company (MPHC), one of the region’s premier diversified petrochemical conglomerates, has reported QR493m net profit for first nine months of 2019. The net profit for the period is down by 52 percent, against a backdrop of reduced selling prices, volatile crude and petrochemical prices and decline in sales volumes. The Group’s total assets stood at QR14.8bn as at 30 September 2019.
MPHC’s business performance in the first nine months of 2019 reflects challenging conditions in the region and wider international markets.
The Group leveraged competitive advantage of uninterrupted access to competitively priced and supply of feedstock under long terms arrangements. Additionally, its partnership with Muntajat, a global leader in marketing and distribution of chemical products, acts a catalyst for global market access, to partially offset extreme challenges. This was supplemented by continued improvement in efficiency, through cost optimization programs, whilst investing in selective capital projects.
In an advance for its ethylene position, the shareholders of Q-Chem have given a nod for the expansion of its ethylene production facilities in Mesaieed. Upon completion in 2022, the expansion program will provide a sustained increase in ethylene production by approximately 7 percent, thereby providing increased utilization of Q-Chem’s existing derivatives production capacity. With an estimated investment of QR364m, the expansion program is predicated on positive capital returns and the increased operational flexibility.
Commenting on the financial results, Ahmad Saif Al-Sulaiti, Chairman of the Board of Directors, MHPC, said: “Since the beginning of this year, we continued to focus on the strategic drivers of operational reliability, while also navigating extremely challenging macro-economic forces both within the region and in global markets. That being said, we remained firmly focused on our five-year business strategy, which enables us to contain expenses while making strategic investments for unlocking further growth potential.
Looking ahead, we are well positioned to strengthen the market position and at the same time generate improved shareholder value.” The Group reported profit before the impact of tax refunds of QR189m in the third quarter, down on the second quarter of 2019. The third quarter profit was impacted against a backdrop of declining selling prices, due to challenging macro-economic conditions.
The Group’s balance sheet continued to strengthen with liquidity position remaining robust during the year. Cash held by MHPC at the end of third quarter reached QR1.6bn and total assets stood at QR14.8bn, compared to QR15.3bn in the same period last year, after accounting for dividend pay-outs for the financial year 2018.
In the first nine months of 2019, the petrochemicals segment reported a revenue of QR1.8bn, a decrease of 15 percent compared to the same period of 2018. Net profit for the same period reached QR540m compared to QR799m in same period last year. The earnings were impacted primarily by the drop in selling prices. During the first nine months, production slowed 4 percent, whereas sales volume remained largely unchanged.
Revenue in the chlor-alkali segment declined by 24 percent compared to same period of 2018. MPHC will host an IR Earnings call of its third quarter earnings with investors to discuss its results, business outlook and other matters on Monday, November 4, 2019 at 130pm.
