Industries Qatar - the holding company of Qatar Petrochemicals (Qapco), Qatar Fertiliser, Qatar Steel and Qafac - has reported a net profit of QR4.4bn in 2015.
The company has proposed a total annual dividend distribution for the year ended December 31, 2015 of QR3bn, equivalent to a payout of QR5 per share and representing 50% of the nominal value.
The net profit is however down 29.9% year-on-year, driven entirely by reduced revenues resulting from price deflation across all segments despite the group vastly benefiting from improved sales volumes and operating costs.
Revenue for the period ended December 31, 2015 was QR5.2bn, a moderate decrease of 12.4%, over the same period of 2014, the company said.
“This year-on-year reduction was primarily driven by a significant reduction in product prices across all segments most notably in the prices of petrochemicals following the oil price decline that began in early fourth quarter of 2014 which continued to remain low throughout 2015 and reached one of the lowest in December 2015,” it said.
Selling prices across all segments were, however, impacted “significantly” due to the prevailing unfavourable economic conditions driven by lower crude oil prices and weaker demand in many economies coupled with excess supply.
Prices in the petrochemicals segments heavily declined due to their close correlation with crude oil prices, which have now declined more than 30% since the beginning of 2015 and more than 20% since end of third quarter of 2015.
In line with the lower crude oil prices, petrochemical prices closed the year with a drop of nearly 28% on 2014. Fertiliser prices saw a decrease of about 15% on last year due to excess supply in some of the key producing countries, muted demand in some of the major buying countries and low energy prices.
Steel prices have also declined considerably following the construction slowdown in most of the end markets due to current economic meltdown and excess supply driven by lower raw material costs.
IQ reported the highest sales volumes since its inception, and were significantly up on last year (by about 10%) as the group benefited by a comparatively lower number of maintenance days in the current year since most of the group’s production facilities completed their planned and warranty maintenance programmes in 2014, resulting in a significantly higher maintenance days during 2014.
Sales volumes were ably supported by the highest production in the group’s history of 17mn metric tonnes, following the return to normal operations of most of the group’s productions facilities, which were on extensive maintenance during the first half of 2014 though two facilities within the steel segment were stopped from the beginning of the year after the ramping up of EF-5 furnace.
Accordingly, the 2015 production reached the highest in group’s operating history and the production utilisation reached 104.6% (year-to-date 2014: 98.4%), resulting in additional production and sales.
Cash position across the group continued to remain strong with cash across the group has reached QR10.6bn after paying the 2014 dividend of QR4.2bn, increase of QR1.1bn or 11.9% reflecting its strong liquidity position even under stressed trading environment and places the group on a “very comfortable” financial position, a company spokesman said.
An aerial view of Qapco facilities in Mesaieed. Industries Qatar, the holding company of Qatar Petrochemicals (Qapco), Qatar Fertiliser, Qatar Steel and Qafac, has proposed a total annual dividend of QR3bn, equivalent to a payout of QR5 per share and representing 50% of the nominal value.
