Market heavyweight Industries Qatar (IQ) saw its net profit more than quadruple year-on-year to QR5.6bn in the first nine months (9M) of 2021, owing to greater consumer confidence and a robust global demand for downstream products.
The group revenue improved 76% to QR14.1bn. Earnings per share (EPS) stood at QR0.93 during 9M-21 against QR0.20 a year-ago period. The Ebitda (earnings before interest taxes, depreciation and taxes) increased by 161% to QR7bn.
Blended product prices at group level grew 43% year-on-year, translating into an increase of QR5.3bn in net profits.
Price increase was mostly linked to elevated market prices across all segments, with fertiliser segment reporting a contribution of QR2.8bn, petrochemicals QR1.8bn and steel QR0.7bn towards the overall improvement in profitability versus 9M-20.
The petrochemicals’ net profit more than tripled year-on-year to QR2.2bn for 9M-21, primarily linked to improved product prices owing to better macroeconomic dynamics and supply scarcities.
The profit improvement was also partially supported by the return of MTBE production to full scale, which was on a commercial shutdown for a certain period during the first half of this year.
The blended product prices for the segment rose by 62% versus 9M-20, with polyethylene (LDPE) prices showing a marked improvement of 67%.
Sales volumes improved by 6%, compared to the same period of last year, on account of improved production levels which also increased by 6%.
The growth in product prices coupled with inclined sales volumes led to an overall increase in revenue by 72% within the segment, to QR4.7bn for 9M-21.
The fertiliser segment’s net profit jumped more than five-fold year-on-year to QR2.8bn for 9M-21, primarily driven by topline growth where revenue more than doubled for the nine month period of 2021, to QR6.5bn.
Selling prices also improved significantly by 69% versus 9M-20, which reflected positively on the segmental performance and led to improved Ebitda margins.
The restricted supply from key exporting economies, rising gas prices and production bottlenecks in some countries, together with strong demand from key crop-growing regions have been a driving force behind high fertiliser prices.
Following the strategic restructuring initiatives implemented last year, the steel segment returned to profitability in 2021. Net profit amounted to QR629mn during 9M-21 compared with a net loss (including impairment) of QR1.4bn in the corresponding period of 2020.
Selling prices improved by 31% compared to 9M-20, due to an increase in demand linked to a rebound in construction activity, IQ said, adding the group now focuses on selling in more profitable domestic and regional markets on its current reduced production capacity.
IQ's financial position continues to remain robust, with the liquidity as at the end of September 30, 2021 reaching QR13.4bn in the form of cash and bank balances, after accounting for a dividend payout of QR2bn for 2020.
Currently, the group has no long-term debt obligations. Its total assets and total equity reached QR39.7bn and QR37.4bn, respectively, at the end of September 30, 2021.
During nine-month period, the group generated positive operating cash flows of QR6.2bn, with free cash flows of QR5.6bn.