Tribune news network
Doha
Industries Qatar (IQ), reported a net profit of QR1.3 billion for the three-month period ended March 31, 2024, representing a moderate uptick of 10% compared to 1Q-23.
Group’s financial position continues to remain robust, with cash and bank balances at QR12.1 billion as of 31 March 2024, after accounting for a dividend payout relating to the financial year 2023 amounting to QR4.7 billion. Currently, the Group has no long-term debt obligations.
Group’s reported total assets and total equity reached QR39.4 billion and QR36.5 billion, respectively, as of 31 March 2024. The Group generated positive operating cash flows of QR915 million, with free cash flows1 of ~QR400 million during 1Q-24.
Earnings per share (EPS) for 1Q-24 was QR0.21 versus QR0.19 for 1Q-23. Group revenue for 1Q-24 moderately declined by 11% to reach QR4.3 billion as compared to QR4.8 billion reported for 1Q-23.
During 1Q-24, the Group’s net earnings declinedmoderately by 10% versus 4Q-23, mainly due to reporting of lower non-operating income in 1Q-24 as the group reported a non-operating income of QR550million in 4Q-23 (related to reversal of impairment within group’s steel facilities with respect to restart of its previously mothballed DR-2 facilities).
On a comparable basis (after adjusting for this one-off non-operating income of QR550 million), the adjusted netincome for the current period has increased significantly by 46% versus 4Q-23.
Revenue for 1Q-24 has marginally increased by 8% versus 4Q-23 primarily due to improved sales volumes that was partially offset by a slight reduction in the average selling prices. Sales volumes have increased sequentially amid improved production within all segments except polyethylene segment. Polyethylene segment was on planned and unplanned maintenance during 1Q-2024 while other segments were on maintenance shutdowns during 4Q-23 thereby affecting production during the respective quarters. On the other hand, selling prices have marginally declined with fuel additives segment absorbing the major share of the decline in the average selling prices.
Group’s financial position continue to remain robust, with cash and bank balances at QR12.1 billion as of 31 March 2024, after accounting for a dividend payout relating to the financial year 2023 amounting to QR4.7 billion. Currently, the Group has no long-term debt obligations.
Petrochemicals
Petrochemicals segment reported a net profit of QR354 million for 1Q-24, marginally down by 7% versus 1Q-23. This decrease was mainly linked to a decline gross in margin attributed to reduction in average selling prices. Average selling prices were down which were broadly offset by improved sales volumes those were up by ~7%% resulting in segmental revenue broadly remaining at par with last year.
Blended product prices for the segmentdeclined by 7% versus last year, due to general decline in the petrochemical demand at the macro-level due to combined effect of sluggish economic forecasts in major economies, weakened consumer appetite, and general decline in demand due to recessionary fears. On the other hand, sales volumes improved by 7% against the backdrop of marginally improved production. Production within the segment marginally improved amid maintenance shutdowns within the polyethylene segment.
On a quarter-on-quarter basis, segment’s net earnings improved significantly by 67% being predominantly linked to improved segmental revenue which inclined by 19 % versus 4Q-23, and lowered operating costs, ultimately resulting in improved gross margin. This incline in segmental revenue was primarily linked to higher sales volumes reported, amidhigher production during 1Q-24. Although selling prices have declined sequentially by 4%, mainly on the back of the relatively un-even supply-demand dynamics, operating costs have improved notably to offset the effect and generated incremental gross margins.
Fertilizer
Fertilizer segment reported a net profit of QR638 million for 1Q-24, with an incline of 25% versus 1Q-23. This incline in net profit was primarily driven by improved operating costs that was declined by 28% versus 1Q-23. The improvement in operating costs were associated with reduction in sales volumes that was lowered by ~10% amid supply challenges and prevailing demand conditions. Furthermore, operating costs were also reduced on the backdrop of improved variable costs driven by lower feedstock costs.
Segment’s revenue decreased by 16% in 1Q-24versus the same period of last year, due to combined effect of lower selling prices and sales volumes. Selling prices declined marginally by 7% versus 1Q-23, after nitrogen fertilizer prices returned to their long-term averages since peaking in 1H-22. Sales volumes were moderately decreased by 10% during 1Q-24, mainly due to supply challenges, and prevailing demand conditions, amid relativelystable production during the year. The segment reported a total production of 2.5 million metric tons marginally down by 1% amid stable operations.
On a quarter-on-quarter basis, segmental revenue marginally increased by 4% versus the previous quarter owing to higher sales volumes. Sales volumes improved by 7% primarily driven by demand support from the Indian Sub-Continent and improved production. Selling prices, on the other hand declined marginally, but remained within the historical range.
Segment’s net profit for 1Q-24, increased by 21% mainly due to higher revenues on account of improved sales volumes, and lower operating costs.
Steel
Steel segment reported a net profit of QR156 million, increased by 17% versus the same period of last year. Improved segmental earnings were mainly driven by higher gross margins on account of improved operating costs which is decreased by 19% versus 1Q-23 on the backdrop of improved raw material costs.
Revenue declined by 16% due to a combined effect of lower prices and volumes. Steel prices on average declined by 4% on account of lower input / raw material costs, and softening of demand.
Simultaneously, sales volumes were also down by 12% on account of weaker domestic and international demand. Construction demand continued to remain challenging due to prevailing macro-economic environment with most Central Banks continued to persist with their hawkish monetary policies.
