Mesaieed Petrochemical Holding Company (“MPHC” or “the Group”; QE ticker: MPHC), yesterday announced a net profit of QR1.8bn for the year ended December 31, 2022, representing a decline of 5 percent compared to YE-21.
Commenting on the financial and operational performance for the year ended 31 December 2022, Ahmad Saif Al-Sulaiti, Chairman of the Board of Directors, MHPC, said: “We successfully navigated macroeconomic obstacles that challenged our business dynamics, and we were able to achieve a resilient set of financial results. In a volatile market, our teams worked relentlessly to mitigate any operational disruptions, and continued to focus on our business strengths, while building our reputation of delivering solid results in achieving operational excellence. On the sustainability front, we continue to reduce our environmental footprints, while building our operations with a focus on energy efficiency and conservation pillars.
Striving for sustainable growth, MPHC gave a go-ahead to the Qatar Vinyl Company (QVC) to construct Qatar’s first Polyvinyl Chloride (PVC) facility, being value accretive to MPHC, as well as the national industrial sector.
Going forward, we will continue to focus on our productivity along with achieving efficiency gains, while selectively invest in capital projects that would increase our competitiveness and create shareholder value.” Macroeconomic climate remained wavered throughout the year, marked by geopolitical conflicts and recessionary fears linked to inflationary pressures and higher interest rate environment. Unprecedently high energy prices in Europe persistently weighed on European producers. Also, China’s strict zero-Covid policy is bringing additional layer of pressures to the commodities.
On overall, commodity prices slightly declined on a year-on-year basis, especially within the petrochemicals segment, following last year’s significantly high price environment mainly due to cautious approach from buyers amid macro-headwinds coupled with comparatively lower crude prices.
MPHC’s operations continue to remain robust and resilient with total production for the current year reaching 1,139 thousand MTs. Production for the current year remained flat versus the last year, mainly due to a large-scale turnaround carried out at Q-Chem’s facilities during 1Q-22, entirely offset the lowered volumes due to a planned preventive maintenance shutdown carried out at the chlor-alkali facilities during 4Q-21.
On a quarter-on-quarter basis production volumes for 4Q-22 declined by 4 percent in comparison to 3Q-22, mainly due to a decline noted in production volumes from chlor-alkali segment, while production within the petrochemicals segment slightly inched higher on a quarter-on-quarter basis.
MPHC demonstrated superior operational agility by achieving its production targets, while ensuring HSE standards remained buoyant. Q-Chem and Q-Chem II improved safety processes while logging a 15th consecutive year without a single recordable incident of heat stress. At MPHC’s petrochemicals segment, Q-Chem completed the largest turnaround in the entity’s history with excellent safety results.
MPHC reported a net profit of QR1.8bn for the year ended 31 December 2022, down by 5 percent compared to the last year. Group revenue remained flat as compared to the last year, to reach QR3.9bn. Earnings per share (EPS) amounted to QR 0.141 for the year ended 31 December 2022, compared to QR0.148 for YE-21.
During the year, average blended product prices decreased by 2 percent compared to YE-21, translating into a decline of QR40m in MPHC’s current year net earnings as compared to last year. Subdued product demand along with excess supply resulted in lowered commodity prices. On the other hand, sales volumes improved by 2 percent versus YE-21, mainly driven by better plant operating rates. Positive growth in sales volumes translated into an increase of QR 53 million in MPHC’s 2022 net earnings versus the last year.
EBITDA for the current period amounted to QR2.2bn with a decline of 3 percent versus YE-21, mainly due to flattish revenue and higher operating cost. EBITDA margins for YE-22 reached 55% versus 57% achieved during 2021.
Compared to 3Q-22, MPHC revenue decreased by 13% and net profit declined by 32%. Key contributor towards the downward trend in revenue and net earnings was mainly lower selling prices realized during the current period versus 3Q-22. Decline in selling prices was mainly linked to downward trajectories noted in commodity prices amid macro-headwinds affecting global markets and comparatively lower crude prices. Sales volumes also declined by 7% compared to 3Q-22, due to lowered production predominantly linked to lower volumes reported by the chlor-alkali segment.
In comparison to 4Q-21, a 10% decline was noted in MPHC revenue for 4Q-22. This decline was primarily attributed to softening of selling prices against a backdrop of relatively negative macroeconomic fundamentals. Product prices on average declined by 25 percent versus same quarter of the last year. Sales volumes, on the other hand, improved by 21 percent due higher production volumes, as the Group’s Chlor-alkali segment was on a planned periodic largescale shutdown during the fourth quarter of 2021 which affected 4Q-21 production volumes at the MPHC level. Due to an overall decline in revenue, consequently net earnings for 4Q-22 also declined by 30 percent versus 4Q-21.
Petrochemicals segment reported a net profit of QR 1.2 billion for the current year, down by 13 percent versus last year. This decline in profitability was primarily driven by lowered segmental revenue which declined by 6 percent on a year-on-year basis.
Segment’s sales volumes declined by 6 percent on a year-on-year basis, as the segment carried out a large-scale turnaround at Q-Chem facilities during 1Q-22 which affected segment’s production volumes, which in turn declined by 7%. Product prices remained flattish and partially offset the negative impacts of lowered sales volumes to an extent. Current year realized selling prices remained affected throughout the year by overall macro-volatilities which affected current year’s price trajectories for most of the commodities.
On a quarter-on-quarter basis, segmental profits declined by 24%, mainly linked to lower selling prices realized during 4Q-22, down by 10% versus 3Q-22. Decline in average selling prices was primarily driven by a general decline in the global petrochemical prices, amid macroeconomic challenges. On the other hand, sales volumes inched higher and a growth of 7 percent was noted on a quarter-on-quarter basis, with better plant operating rates.
