Market heavyweight Industries Qatar (IQ) has reported about five-fold growth year-on-year in net profit to QR3.54bn in the half (H1) of this year, mainly due to a stronger consumer demand and rising oil prices.
The group revenue shot up 69% year-on-year to QR9.2bn (assuming a proportionate consolidation). Earnings-per-share (EPS) amounted to QR0.58 in H1, 2021 against QR0.12 a year-ago period.
Its Ebitda or earnings before interest, taxes, depreciation and amortisation almost tripled on a yearly basis to QR4.5bn in the review period.
The blended product prices at the group level, increased by 35% compared to H1, 2020, translating into an increase of QR3.1bn in group’s net profits.
The price increase was noted across all the group’s segments, with fertiliser reporting a contribution of QR1.4bn, petrochemicals QR1.3bn towards the overall growth in profitability on a yearly basis. The steel segment’s contribution was QR0.5bn towards current period’s earnings growth versus same period of last year.
IQ's financial position continues to remain robust, with the liquidity position at the end of June 30, 2021 reaching QR11.1bn in form of cash and bank balances, after accounting for a dividend payout of QR2bn for 2020.
The group’s total assets and total equity reached QR37.5bn and QR35.3bn, respectively, at the end of H1, 2021. During the period, the group generated positive operating cash flows of QR3.7bn, with free cash flows of QR3.4bn.
The petrochemical segment witnessed about five-fold jump year-on-year in net profit to QR1.5bn in H1, 2021. This notable increase in profitability was primarily driven by improved product prices owing to improved macro environment and supply shortages.
The growth in product prices coupled with 8% growth in sales volumes led to an overall increase in revenue by 83% within the segment, to QR3.1bn in the review period.
The fertiliser segment reported more than quadrupled net profit to QR1.54bn in H1, 2021, primarily driven by an almost double in revenues to QR3.8bn. The selling prices improved by 55% year-on-year, which reflected positively on the segmental performance and led to improved Ebitda margins.
The steel segment was back in the black, after having a difficult first half of 2020 and following strategic restructuring initiatives implemented last year. Net profit was QR496mn in H1, 2021 against a net loss of QR1.39bn the previous year period.
The profitability in the steel segment has been attributed to 27% increase in the selling prices; mothballing of certain steel facilities that allowed the segment to primarily focus on profitable domestic market, which led to adjust its cost base; recognition of one-off impairment expenses during H1, 2020, amounting to QR1.2bn, relating to the facilities moth-balled; and changing the raw material mix.