Market heavyweight Industries Qatar (IQ), which is well positioned to mitigate the threats of depressed economic conditions, will make “essential” investments, especially to upgrade its existing assets, and “selectively” focus on other capital projects, while optimising costs.
“The group will continue to focus on essential investments, which will enhance reliability, efficiency, competitiveness and quality of the operating asset base,” IQ chairman Saad Sherida al-Kaabi yesterday told shareholders, for whom the group has consistently maintained a more than 60% dividend payout ratio in the previous years.
The group – a holding entity of Qatar Petrochemicals (Qapco), Qatar Fertiliser, Qatar Fuel Additives and Qatar Steel – would also  “selectively” invest in other capital investment projects, which “we believe will increase our competitive position, and add value to our esteemed shareholders”, he said at the annual general assembly meeting.
Highlighting that IQ’s competitive advantages strategically, operationally and financially; al-Kaabi said these are driven by a strong liquidity position, assured supply of feedstock, competitively priced contracts and well maintained asset base.
“These competitive advantages are not only helping us mitigate the threats enforced by the depressed economic conditions, but also keep us well ahead of the competition, and boost the confidence of external bodies such as credit rating agencies, lending institutions and investors,” said al-Kaabi, who is also the president and chief executive of Qatar Petroleum.
As part of efforts to improve revenues and enhance the profitability, Qatar Vinyl Company, a subsidiary of Mesaieed Petrochemical Holding, is being planned to integrate into Qapco, he said.
IQ, whose 2016 results “significantly” exceeded the budgeted expectations with stable production and sales and improved operating costs, was able to cut its operating expenses by more than 5% in 2016.
However, the low-oil-price environment (with crude falling below $30 a barrel in the beginning of 2016) had a “direct and significant” impact on the group’s petrochemical segment as prices remained very low in the early part of 2016.
Nevertheless, its financials continue to improve with cash and bank balances across group companies reaching a record QR11.3bn, reaffirming IQ’s ability to generate positive cash flows even during tougher economic times, al-Kaabi said, adding the company was also able to reduce its total debt to QR2.9bn across the group, demonstrating a strong liquidity position.
Having given renewed thrust to improving the operating costs, IQ said improvements were achieved through access to raw materials and other services at competitive prices, rationalisation of operations, and increasing efficiency and effectiveness in businesses.
“The group will continue to benefit from the ongoing cost optimisation programme to achieve further savings,” al-Kaabi said, adding since the implementation of the cost and operational optimisation programme in late 2014, it was able to realise an improvement of about QR600mn through actual cost savings.
In 2016, IQ reassessed the overall business operations including capital expenditure, operating expenditure and human capital requirements and steps were taken to realise further optimisation, its board of directors report highlighted.



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