Market heavyweight Industries Qatar (IQ) has earmarked QR11.1bn planned capital expenditure (capex) for 2022-26 and is currently evaluating the possibilities on constructing a new energy efficient ammonia plant.
The base case business strategy of IQ – the holding entity of Qatar Petrochemicals, Qatar Fertilisers and Qatar Steel – will continue to focus on market development and efficiency gains, while extending its leaner cost base.
These were outlined at the online annual general assembly, where shareholders approved the 2021 financial results and dividend distribution amounting to QR6.05bn or a payout of QR1 per share.
"For the next five years (2022-2026), the group’s planned capital expenditure will be around QR11.1bn," said Mohamed Jaber al-Sulaiti, manager (Privatised Companies Affairs Department), QatarEnergy.
The group will continue to focus on capital expenditure programme with a critical importance to asset integrity, operational efficiency, reliability improvements, cost optimisation and capacity de-bottlenecking, he added.
During the financial year 2021, IQ spent QR1.3bn in capital expenditures, mainly related to turnaround, reliability, and health, safety and environmental (HSE) projects.
The fertiliser segment is expected to incur QR8.8bn in various projects, including turnaround related capex and a new ammonia train. Qafco had seen QR444mn in capex in 2021, according to IQ board report.
The petrochemical segment is expected to see capex of QR1.9bn in various projects. It had seen QR817mn capex in 2021.
The steel segment is expected to incur QR0.5bn in various capital expenditure projects over the next five years including asset replacements, HSE and reliability improvement.
The group is at present evaluating possible new energy efficient ammonia train investment that will replace a pair of existing ammonia trains, which were in operations over the last five decades.
"The investment is currently being evaluated for its operational and financial merits," the board report said.
Addressing the shareholders, IQ Chairman HE Saad bin Sherida al-Kaabi said during 2021, the group remained successful in realising financial and operational benefits from all the strategic decisions taken last year in order to create and preserve long-term shareholder value.
"Our strategic investment of $1bn to take full ownership in Qafco has served us well, with results in excess of our expectations. Similarly, mothballing certain steel facilities during 2020 allowed us to focus on more profitable domestic and selective international markets, and benefited the group with an improved profitability and better plant reliability," he said.
On 2021 performance, he said the macroeconomic drivers remained" positive", supported by effective vaccination campaigns and progression of societal reopening, leading to a renewed demand for downstream products.
On the other hand, supply constraints and logistical bottlenecks remained evident throughout the year, al-Kaabi said, adding this demand recovery along with limited supply allowed commodity prices to recover notably from last year’s troughs.
Also, recent energy crisis and power rationing measures in key markets has supported elevated price trajectories for commodities, according to him.
"In a year of solid macroeconomic tailwinds, we continue to thrive for operational excellence by focusing on our people, ensuring plant reliability and our commitment to HSE,” he said.
Going forward, the board said the group will also continue to develop markets with best netbacks and enhanced profitability through arbitrage or output considerations, while remaining cost competitive, with an eye on HSE and operational excellence.
The base case business strategy of IQ – the holding entity of Qatar Petrochemicals, Qatar Fertilisers and Qatar Steel – will continue to focus on market development and efficiency gains, while extending its leaner cost base.
These were outlined at the online annual general assembly, where shareholders approved the 2021 financial results and dividend distribution amounting to QR6.05bn or a payout of QR1 per share.
"For the next five years (2022-2026), the group’s planned capital expenditure will be around QR11.1bn," said Mohamed Jaber al-Sulaiti, manager (Privatised Companies Affairs Department), QatarEnergy.
The group will continue to focus on capital expenditure programme with a critical importance to asset integrity, operational efficiency, reliability improvements, cost optimisation and capacity de-bottlenecking, he added.
During the financial year 2021, IQ spent QR1.3bn in capital expenditures, mainly related to turnaround, reliability, and health, safety and environmental (HSE) projects.
The fertiliser segment is expected to incur QR8.8bn in various projects, including turnaround related capex and a new ammonia train. Qafco had seen QR444mn in capex in 2021, according to IQ board report.
The petrochemical segment is expected to see capex of QR1.9bn in various projects. It had seen QR817mn capex in 2021.
The steel segment is expected to incur QR0.5bn in various capital expenditure projects over the next five years including asset replacements, HSE and reliability improvement.
The group is at present evaluating possible new energy efficient ammonia train investment that will replace a pair of existing ammonia trains, which were in operations over the last five decades.
"The investment is currently being evaluated for its operational and financial merits," the board report said.
Addressing the shareholders, IQ Chairman HE Saad bin Sherida al-Kaabi said during 2021, the group remained successful in realising financial and operational benefits from all the strategic decisions taken last year in order to create and preserve long-term shareholder value.
"Our strategic investment of $1bn to take full ownership in Qafco has served us well, with results in excess of our expectations. Similarly, mothballing certain steel facilities during 2020 allowed us to focus on more profitable domestic and selective international markets, and benefited the group with an improved profitability and better plant reliability," he said.
On 2021 performance, he said the macroeconomic drivers remained" positive", supported by effective vaccination campaigns and progression of societal reopening, leading to a renewed demand for downstream products.
On the other hand, supply constraints and logistical bottlenecks remained evident throughout the year, al-Kaabi said, adding this demand recovery along with limited supply allowed commodity prices to recover notably from last year’s troughs.
Also, recent energy crisis and power rationing measures in key markets has supported elevated price trajectories for commodities, according to him.
"In a year of solid macroeconomic tailwinds, we continue to thrive for operational excellence by focusing on our people, ensuring plant reliability and our commitment to HSE,” he said.
Going forward, the board said the group will also continue to develop markets with best netbacks and enhanced profitability through arbitrage or output considerations, while remaining cost competitive, with an eye on HSE and operational excellence.