DOHA: Industries Qatar (IQ), the region’s industrial giant, recorded a staggering QR4.6bn as the net profit for the first six months ended June 2013, up 13.2 percent compared to IQ’s net profit for the same period in 2012.
“IQ has followed up on the record-breaking full year results in 2012 with its second highest half-yearly earnings on record. Net profit for the six months ended June 30, 2013 has shown a significant improvement of QR0.5bn over the same period of 2012, as the group benefited from an additional 2 million MT of urea and 240,000 MT of LDPE production capacity following the launch during 2012 of QR12.8bn of new facilities”, H E Dr Mohammed bin Saleh Al Sada, Minister of Energy and Industry and Chairman and Managing Director of Industries Qatar, noted in a Qatar Exchange filing after the Group’s third Board of Directors’ meeting for 2013.
Commenting on the financial results, Abdulrahman Ahmad Al Shaibi, Chief Coordinator, IQ, said: “The robust year-on-year financial results can be primarily attributed to strong sales volumes following the launch of the group’s new facilities in the petrochemical and fertiliser businesses, and resilient petrochemical and steel EBITDA margins.”
IQ’s revenue for H1 2013 was QR3.1bn, a decrease of QR0.2bn, or 7.1 percent, on the restated results for the same period of 2012. However, on a like-for-like (LFL) basis under the previous accounting standard, reported revenue would have been QR9.9bn, an increase of QR0.8bn, or 8.8 percent.
The revenue from the petrochemical segment in the first half was QR2.4bn, up QR0.3bn or 12 percent as against the same period of 2012. The segmental performance has been primarily attributed to significantly-improved sales volumes following the commercial launch of the group’s third LDPE plant in the third quarter of 2012, and fuel additive comparatives adversely impacted by two planned/unplanned shut-downs in 2012.
Petrochemical revenue for the second quarter of 2013 was QR1.1bn, down QR0.1bn, or 9 percent, on the previous quarter. The negative variance has been attributed to a combination of a softening in LDPE and MTBE prices, and moderately weaker volumes following the unplanned LDPE and MTBE shut-downs.
The fertiliser segment closed the first half with revenue of QR3.5bn, up QR0.8bn, or 29.9 percent, on the first half of 2012. The segment’s positive quarterly performance was due exclusively to incremental urea sales volumes following the commercial launch of Qafco 5 and 6 during the second half of the previous year.
The group’s first half steel revenue was QR3.1bn, a decrease of QR0.2bn, or 7.1percent, on the same period of last year, while second quarter sales totaled QR1.4bn, down QR0.2bn or 14.4 percent, over the first quarter of 2013.
Al-Shaibi remarked: “The group recorded highly creditable half yearly earnings of QR4.6bn, an improvement of more than 13 percent on the same period of 2012, and only QR25.1m off the highest ever profit for the first six months of the year. However, in contrast to the record results of the first half of 2008 when net profit was driven by rampant commodity price inflation, the earnings of this reporting period were entirely volume driven, and came against the back-drop of tighter petrochemical and fertiliser operating margins, and several key product prices at near-term lows.”
IQ’s EBITDA for the first half of 2013 was QR4.7bn, an increase of QR0.5bn or 12.5 percent on the same period last year. “Higher sales volumes following the commercial launches of Qafco 5, 6 and LDPE-3, and weak prior year comparatives due to extended fuel additives shut-downs in 2012, were the primary contributors to the QR1.1bn year-on-year profit improvement. The group also benefited from lower iron ore costs, and improved operating results at several of the group’s local and regional investments.
On the reclassification of MSCI Qatar Index from frontier market to the emerging, Al Shaibi said the reclassification is expected to improve the investment environment, and is predictably to be a harbinger of incremental international investment flows to blue chip companies like Industries Qatar.
The Peninsula
