Planned shutdowns, weak urea prices and heightened operating costs in the petrochemical and steel units have weighed on market heavyweight Industries Qatar (IQ), which reported 26% year-on-year decline in net profit to QR4.72bn in the first nine months of this year.

However, results noticeably improved in the third quarter (Q3) with the return to normal operations across most of the group: consolidated net profit improved by a significant 50% against second-quarter earnings, with the petrochemical and fertiliser segments registering quarter-on-quarter growth of 73% and 87% respectively, said IQ, which has interests in fertiliser, petrochemicals, steel and fuel additives.

The group earnings in 2014 were supported by the launch and subsequent ramp-up of Qatar Steel’s EF-5 facility in Q1, and Qafac’s (Qatar Fertiliser) CDR (carbon dioxide recovery) plant in Q3, as well as by strong key petrochemical product prices.

However, the group faced “significant challenges” from extended, planned shut-downs across all plants during the first half of the year, weak urea prices, and heightened operating costs.

Reported revenue for the nine-month period ended September 30, 2014 was QR4.7bn, an increase of 5%, over the same period of 2013.

Petrochemical revenue fell 4% year-on-year to QR5bn in the first nine months of 2014. Strong key petrochemical product prices - particularly of LDPE (low density polyethylene), LLDPE (linear LDPE) and methanol, largely compensated for the impact of the shut downs across all plants within the segment during the first half.

The fertiliser segment closed the nine months ended September 30, 2014 with revenue of QR3.9bn, a decline of 20%. The year-on-year decline in fertiliser revenue follows significant volume reductions mainly due to planned mandatory, warranty shut-downs and to a lesser extent, unplanned disruption across several fertiliser trains, and weak weighted average urea prices.

However, revenue in the steel segment grew by a moderate 5% to QR4.7bn in the first nine months of 2014, benefiting from the launch and initial ramp-up of the new EF-5 facility in Q1, 2014, and the consequent boost in billet production volume. But it was partially offset by moderate re-bar price deflation, reduced operating days due to planned and unplanned disruption, and strong prior year comparatives.

On major capital expenditure and investment updates, IQ said construction has been completed at the QR145.5mn CDR plant of the group’s fuel additive joint venture, Qafac. The plant, which is the largest of its kind for methanol production in the world and is designed to capture over 500 MT per day of carbon dioxide and utilise it in the production of methanol, is expected to not only reduce Qafac’s greenhouse gas emissions.

About the Algerian Qatari Solb Company, IQ said the first phase of the 2mn tonnes per annum plant is planned to be Q1, 2018. The project envisages a direct reduction plant, steel melt shop and rolling mill being built at an estimated equity contribution from Qatar Steel of around QR600mn.