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Tribune News Network
Doha
Industries Qatar (IQ), one of the region’s industrial giants with holdings in petrochemicals, fertilisers and steel producers, on Tuesday announced that it reported a net profit of QR 951 million in the first nine months 2020 as compared to QR2 billion for the same period last year.
Net profit for the third quarter of 2020 was significantly up by 66 percent against the previous quarter to reach QR 466 million.
The Group’s revenue amounted to QR 8 billion in the first nine months of 2020 as compared to QR 10.2 billion for the same period last year.
The Group recorded earnings per share (EPS) of QR 0.16 for the nine months period ended September 30, 2020, as compared to QR0.34 for the same period last year.
The company’s liquidity position continues to remain robust, despite the macroeconomic headwinds and the recent cash financed the acquisition of 25 percent stake in Qatar Fertilizer Company (Qafco).
When considering the profitability of the Group including 25 percent of Qafco’s profits for the nine months period, the net profit (normalized profits) for the period would reach to QR 1.1 billion.
EBITDA for the period reached QR 2.6 billion, compared to QR 3.2 billion for the same period of last year.
According to a statement issued by the company, business performance of the Group during the year was marked by the challenging macroeconomic conditions witnessed amid slower economic growth, weaker crude oil prices, trade conflicts, lack of infrastructure investments, continued negative consumer sentiments and stiff competition.
The negative macroeconomic environment got further worsened due to the outbreak of COVID-19 pandemic, which had a material unfavourable effect on consumer and industrial demand due to lockdowns affecting the global GDP growth.
This led to increased pressure on IQ’s product prices in various markets, which negatively affected the Group’s year-to-date financial performance.
However, the Group weathered the extreme external adversities by leveraging its competitive advantages including its relatively low operating cost base; long-term access to feedstock; stronger financial position; diversified product range including its efficient and flexible production facilities; wider global presence; and a dedicated marketing and sales partner; thereby limiting the impact of such vulnerabilities.
In the current distressed situation, the sales and marketing team continued to ensure their operations are effectively and efficiently managed, thereby, creating several arbitrage opportunities, including successful identification of new markets, so as to divert the additional volumes, and closely worked with business partners, customers and government agencies in order to ensure the production, operations and supply chain activities remain uninterrupted.
Commenting on the Group’s financial and operational performance for the nine months period, Industries Qatar Chairman and Managing Director HE Saad Sherida Al Kaabi said, “As an immediate priority, following the unprecedented headwinds affecting our business, we further emphasised our optimisation drive across the segments and implemented new optimisation measures during the year.”
In response to COVID-19, Kaabi said, the Group companies continue to monitor the business conditions and manage the threats posed by the spread of the pandemic, with a specific focus on protecting our employees, assets and operations.
“Our marketing partner diligently monitored the evolving situation in our key markets and acted prudently to minimise the disruptions. The Group also successfully concluded the acquisition of 25 percent stake in Qafco, for a purchase consideration of $1 billion. The acquisition of the Qafco’s minority stake is consistent with IQ’s strategy to build its presence and create value across the downstream hydrocarbon chain, spurred by synergistic opportunities. This acquisition would not only provide efficient and effective use of excess cash available at the Group level but also provide us with 100 percent control over the world’s largest single-site Urea producer, along with new favourable commercial terms,” he said.
“Going forward, the Group’s competitive advantages together with our flexibility in operations and diversified portfolios, would remain critical to the Group’s response to these external challenges,” he said.
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28/10/2020
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