Mesaieed Petrochemical Holding Company (MPHC) - a holding company of Q-Chem, Q-Chem II and Qatar Vinyl Company (QVC) - has made a net profit of QR585mn for the first half (H1) of 2023.
The net profit however declined 44% year-on-year as macroeconomic context remained wavered by several challenges affecting the commodity markets, including geopolitical uncertainty, recessionary fears linked to inflation related pressures and higher interest rate environment.
MPHC’s operations continue to remain robust and resilient with total production for the current period reaching 533,000 metric tonnes. Production for H1-2023 slightly declined versus H1-2022, mainly on a maintenance turnaround carried out at QVC facilities during the first quarter (Q1) of 2023, which affected production volumes for H1-2023.
The group revenues declined 27% to QR1.54bn in H1-2023, mainly linked to a 25% fall in average blended product prices. Suppressed commodity demand linked to macro-headwinds, coupled with additional supply resulted in lowered commodity prices.
Liquidity remained robust with cash and bank balances standing at QR3.5bn at the end of June 30, 2023. Decline in cash and bank balances was mainly due to dividend payment for the financial year 2023, being partially offset by positive cash flow generation during H1-2023.
Total assets amounted to QR17bn and total equity amounted to QR16.6bn during January-June 2023.
The petrochemicals segment reported a net profit of QR502mn for the current period, down 24% on an annualised basis, primarily on lower selling prices coupled with comparatively higher operating cost linked to higher production and higher sales volumes leading to unfavourable inventory movements.
The segment’s revenue declined by 10% year-on-year to QR1.2bn during H1-2023, as lowered selling prices was partially offset by higher sales volumes.
Growth in sales volumes was mainly linked to higher production rose by 14%, as the segment carried out a large-scale turnaround at Q-Chem facilities during Q1-2022 which affected production volumes for last year’s same period.
On the other hand, product prices declined 21%, mainly due to macro-volatilities echoed from last year, which affected current period’s price trajectories for most of the commodities in comparison to the same period of last year.
The chlor-alkali segment reported a net profit of QR31mn for H1-2023, which fell significantly by 91% on an annualised basis, due to lower 47% and 23% contraction in selling prices and sales volumes, respectively.
Selling prices declined as end-product industries (alumina/aluminium, and PVC) have dampened demand and remained challenged, especially for products linked to construction. Sales volumes declined mainly due to lowered production impacted by planned turnaround at chlor-alkali facilities carried out during Q1-2023.
The decline in selling prices and sales volumes, led to an overall 60% year-on-year shrinkage in segmental revenues to QR293mn for H1-2023.
