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Tribune news network
DOHA
Industries Qatar (IQ) on Wednesday reported a net profit of QR2 billion for the six month period ended June 30, down QR0.5 billion or 19 percent against the same period of 2015.
IQ said the reduction in net profit was exclusively driven by the lower revenues resulting from the notable price deflation across all operating segments most notably in the fertiliser segment.
The reduction in revenues was largely offset by the improvement in the operating costs on account of ongoing cost optimisation initiatives.
The company also reported second quarter net profit of QR1.3 billion, a commendable improvement of QR0.6 billion on Q1, 2016 or 82 percent driven by the improved sales volumes, better polyethylene prices and reduced operating costs.
The group's financial position continued to remain solid with the group holding cash in excess of QR9.3 billion. The group's total debt amounted to QR3.4 billion, down QR0.4 billion against December 31, 2015.
All segments within the group operated under tightened market conditions similar to those experienced over the last few quarters where prices of some of the segments experienced severe setbacks - most notably, the prices of fertilisers and fuel additives.
Fertiliser prices remained weak due to a combination of factors including lower production costs, weak demand, weaker currency in some fertiliser exporting countries and planned new capacity additions in some of the key supplier markets. Nevertheless, sales volumes were up on last year in line with higher production driven by lower facility maintenance in the current year.
Prices in the steel segment were also marginally down on the previous year due to muted demand in the major regional markets following the decision to reduce capital expenditure, together with the availability of cheap steel from non-GCC producers especially China and Turkey.
Prices during the current year, however continued to remain stable with minimal quarterly movements.
