Market heavyweight Industries Qatar (IQ) – the holding entity of Qatar Petrochemical, Qatar Fertilisers and Qatar Steel – has more than quadrupled its net profit year-on-year (y-o-y) to QR8.1bn in 2021.
The board has recommended a cash dividend of QR1 per share, equating to 100% of the nominal share value.
“2021 was an exceptional year where the group has strongly risen from last year’s challenges. During this year, we captured the benefits of a solid commodity price environment, underpinned by renewed product demand," said IQ chairman HE Saad bin Sherida al-Kaabi.
Earnings per share (EPS) amounted to QR1.34 against QR0.32 in 2020. Driven by impressive operating cash flows, Ebitda (earnings before interest, taxes, depreciation and amortisation) increased by 152% and reached QR10.2bn.
Highlighting that blended product prices surged significantly by 58% y-o-y; IQ said the growth in product prices translated into an increase of QR8.5bn in group’s net earnings.
This price increase was linked to elevated market prices across all the segments, with fertiliser segment reporting a contribution of QR5.3bn, petrochemicals (QR2.3bn) and steel segment (QR0.9bn).
The group's operating expenses increased by 25%, attributed to higher variable cost on account of increased sales volumes and raw material cost inflation.
On the other hand, the group continues to benefit from the cost optimisation initiatives implemented in the second half of 2020.
IQ's financial position continues to remain robust, with cash and bank balances at QR16bn in 2021, after accounting for a dividend payout of QR2bn for 2020.
Currently, the group has no long-term debt obligations. Its reported total assets and total equity reached QR42.3bn and QR39.5bn, respectively, as on December 31, 2021.
The petrochemicals segment’s net profit more than doubled y-o-y to QR2.5bn in 2021, primarily linked to improved product prices owing to better macroeconomic dynamics and supply bottlenecks.
The performance of the segment was affected to an extent due to a decline in production volumes on account of a major turnaround carried out at most of the polyethylene facilities during the fourth quarter of the year.
Blended product prices for the segment improved by 55% versus last year, with polyethylene (LDPE) prices showing a marked improvement of 57%.
Sales volumes, on the other hand, fell marginally on maintenance turnaround at PE facilities and a commercial shutdown within fuel additives facilities. Segmental revenue for the year reached QR6bn, with a y-o-y improvement of 51%, amid improved price environment.
The fertiliser segment's net profit grew more than six-fold y-o-y to QR4.7bn in 2021, primarily driven by revenue growth, which jumped by 133%, to QR10.3bn.
Selling prices improved significantly by 100% on a yearly basis and reflected positively on the segmental performance and led to improved Ebitda margins. Rising energy prices, restricted supply from key exporting economies, together with strong demand from key crop-growing regions has been a driving force behind soaring fertiliser prices.
Following the strategic restructuring initiatives implemented last year, the steel segment returned to profitability in 2021. The segment reported a net profit of QR716mn against a net loss QR1.3bn in 2020.
Selling prices improved by 31%, due to increase in demand linked to a rebound in construction activity. Iron ore prices on the other hand remained volatile with a significant price hike noted during the early parts of the year, followed by recent lower trajectories.
“2021 was an exceptional year where the group has strongly risen from last year’s challenges. During this year, we captured the benefits of a solid commodity price environment, underpinned by renewed product demand," said IQ chairman HE Saad bin Sherida al-Kaabi.
Earnings per share (EPS) amounted to QR1.34 against QR0.32 in 2020. Driven by impressive operating cash flows, Ebitda (earnings before interest, taxes, depreciation and amortisation) increased by 152% and reached QR10.2bn.
Highlighting that blended product prices surged significantly by 58% y-o-y; IQ said the growth in product prices translated into an increase of QR8.5bn in group’s net earnings.
This price increase was linked to elevated market prices across all the segments, with fertiliser segment reporting a contribution of QR5.3bn, petrochemicals (QR2.3bn) and steel segment (QR0.9bn).
The group's operating expenses increased by 25%, attributed to higher variable cost on account of increased sales volumes and raw material cost inflation.
On the other hand, the group continues to benefit from the cost optimisation initiatives implemented in the second half of 2020.
IQ's financial position continues to remain robust, with cash and bank balances at QR16bn in 2021, after accounting for a dividend payout of QR2bn for 2020.
Currently, the group has no long-term debt obligations. Its reported total assets and total equity reached QR42.3bn and QR39.5bn, respectively, as on December 31, 2021.
The petrochemicals segment’s net profit more than doubled y-o-y to QR2.5bn in 2021, primarily linked to improved product prices owing to better macroeconomic dynamics and supply bottlenecks.
The performance of the segment was affected to an extent due to a decline in production volumes on account of a major turnaround carried out at most of the polyethylene facilities during the fourth quarter of the year.
Blended product prices for the segment improved by 55% versus last year, with polyethylene (LDPE) prices showing a marked improvement of 57%.
Sales volumes, on the other hand, fell marginally on maintenance turnaround at PE facilities and a commercial shutdown within fuel additives facilities. Segmental revenue for the year reached QR6bn, with a y-o-y improvement of 51%, amid improved price environment.
The fertiliser segment's net profit grew more than six-fold y-o-y to QR4.7bn in 2021, primarily driven by revenue growth, which jumped by 133%, to QR10.3bn.
Selling prices improved significantly by 100% on a yearly basis and reflected positively on the segmental performance and led to improved Ebitda margins. Rising energy prices, restricted supply from key exporting economies, together with strong demand from key crop-growing regions has been a driving force behind soaring fertiliser prices.
Following the strategic restructuring initiatives implemented last year, the steel segment returned to profitability in 2021. The segment reported a net profit of QR716mn against a net loss QR1.3bn in 2020.
Selling prices improved by 31%, due to increase in demand linked to a rebound in construction activity. Iron ore prices on the other hand remained volatile with a significant price hike noted during the early parts of the year, followed by recent lower trajectories.