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Satyendra Pathak
Doha
Industries Qatar’s (IQ) financial position remained robust and resilient despite challenges posed by an unprecedented decline in crude oil prices amid COVID-19 pandemic in 2020, Minister of the State for Energy Affairs and Industries Qatar Chairman and Managing Director HE Saad Sherida Al Kaabi said on Monday.
Addressing shareholders at the company’s Annual General Assembly meeting, Kaabi said, “The year 2020 was marked by global economic uncertainties in form of stymied demand and weaker global GDP growth since the start of the year. The macro-environment was further deteriorated due to the unprecedented decline in crude oil prices amid the COVID-19 pandemic. All of this led to increased pressure on our product prices, which negatively affected IQ’s overall financial performance for this year to record a net profit of approximately QR 2 billion.”
During the meeting, the shareholders approved the board’s recommendation for a dividend payment of QR 0.33 per share for 2020, representing 33 percent of the nominal share value.
“Despite these challenges, we thrived to focus on our strategy, while critically relying on our people, portfolio growth and operational excellence, which resulted in maximising shareholder value,” he said.
“There have been some signs of gradual recovery noted in the global macroeconomic climate, specifically in the latter part of 2020, with a rebound in the prices of crude oil and downstream products, owing to unprecedented stimulus announcements and lifting of lockdowns in major markets, along with optimism around vaccine roll-out. Against such a backdrop of positive developments, we look forward to a further improved macroeconomic environment, which would yield positive results in terms of enhanced performance for the Group,” he said.
During the year, Kaabi said, the Group continued its focus on ensuring safe, efficient and reliable operations with consistent production levels, supported by momentous efforts focused on output and cost optimisation.
“At the same time, IQ improved its overall supply chain and marketing activities, especially in the lockdown situations, as we maintained our sustained uninterrupted access to global markets,” he said.
“During 2020, we successfully completed the acquisition of 25 percent stake in Qatar Fertiliser Company (Qafco) for a purchase consideration of approximately QR3.75 billion. With this acquisition, IQ became the full owner of the Qafco, including Qatar Melamine Company, which is owned by Qafco,” he said.
“Given current short- and medium-term economic outlook and the related impact on our business, the board of directors proposes to pay a total annual dividend distribution for 2020 of QR2 billion, equivalent to QR 0.33 per share, with a pay-out ratio of 100 percent to the Group’s net earnings. Given that this year’s payout ratio has been the highest since IQ’s incorporation, even with the extreme challenges faced by the Group during 2020, it is a testament to the Group’s robust and resilient financial position,” he said.
Speaking on the occasion, Mohammed Jaber Al Sulaiti, Manager Privatized Companies Affairs Dept at Qatar Petroleum, said, “The year 2020 was one of the most challenging years for the Group since inception, underpinned by oil price turmoil, global pandemic and customer scepticism. Industries Qatar, however, was able to mitigate most of these challenges by adopting several multi-term strategies with the intent to maximize the value of its business.”
Industries Qatar implemented another layer of a new optimisation programme to operational costs and workforce with an intent to maintain its competitive position among downstream producers, he said.
“After a careful review of long-term demand and supply for steel in both the domestic and international markets, and the competitive position, the Group decided to reduce its steel mill capacity to approximately to 50 percent of the name-plate capacity. With this decision, it is expected to improve Group’s performance and profitability margins,” he said.
In line with Group’s decision to reduce its steel production capacity, Sulaiti said, the Group also decided to migrate the marketing of steel products back to Qatar Steel to focus only on domestic sales.
He said the decision to acquire a minority stake in Qafco is of strategic importance to the Group, as the same has given the Group with full control over the world’s largest single-site urea producer in terms of its operating, investing and financing
decisions.
“The acquisition also allowed the Group to enter into a new, long term and more favourable gas price agreement with Qatar Petroleum. The new GSPA is expected to bring additional financial benefits to the Group driven via improved production efficiency and profitability margins,” he said.IQ shareholders approve dividend distribution of QR0.33 per share
Doha
Industries Qatar’s (IQ) financial position remained robust and resilient despite challenges posed by an unprecedented decline in crude oil prices amid COVID-19 pandemic in 2020, Minister of the State for Energy Affairs and Industries Qatar Chairman and Managing Director HE Saad Sherida Al Kaabi said on Monday.
Addressing shareholders at the company’s Annual General Assembly meeting, Kaabi said, “The year 2020 was marked by global economic uncertainties in form of stymied demand and weaker global GDP growth since the start of the year. The macro-environment was further deteriorated due to the unprecedented decline in crude oil prices amid the COVID-19 pandemic. All of this led to increased pressure on our product prices, which negatively affected IQ’s overall financial performance for this year to record a net profit of approximately QR 2 billion.”
During the meeting, the shareholders approved the board’s recommendation for a dividend payment of QR 0.33 per share for 2020, representing 33 percent of the nominal share value.
“Despite these challenges, we thrived to focus on our strategy, while critically relying on our people, portfolio growth and operational excellence, which resulted in maximising shareholder value,” he said.
“There have been some signs of gradual recovery noted in the global macroeconomic climate, specifically in the latter part of 2020, with a rebound in the prices of crude oil and downstream products, owing to unprecedented stimulus announcements and lifting of lockdowns in major markets, along with optimism around vaccine roll-out. Against such a backdrop of positive developments, we look forward to a further improved macroeconomic environment, which would yield positive results in terms of enhanced performance for the Group,” he said.
During the year, Kaabi said, the Group continued its focus on ensuring safe, efficient and reliable operations with consistent production levels, supported by momentous efforts focused on output and cost optimisation.
“At the same time, IQ improved its overall supply chain and marketing activities, especially in the lockdown situations, as we maintained our sustained uninterrupted access to global markets,” he said.
“During 2020, we successfully completed the acquisition of 25 percent stake in Qatar Fertiliser Company (Qafco) for a purchase consideration of approximately QR3.75 billion. With this acquisition, IQ became the full owner of the Qafco, including Qatar Melamine Company, which is owned by Qafco,” he said.
“Given current short- and medium-term economic outlook and the related impact on our business, the board of directors proposes to pay a total annual dividend distribution for 2020 of QR2 billion, equivalent to QR 0.33 per share, with a pay-out ratio of 100 percent to the Group’s net earnings. Given that this year’s payout ratio has been the highest since IQ’s incorporation, even with the extreme challenges faced by the Group during 2020, it is a testament to the Group’s robust and resilient financial position,” he said.
Speaking on the occasion, Mohammed Jaber Al Sulaiti, Manager Privatized Companies Affairs Dept at Qatar Petroleum, said, “The year 2020 was one of the most challenging years for the Group since inception, underpinned by oil price turmoil, global pandemic and customer scepticism. Industries Qatar, however, was able to mitigate most of these challenges by adopting several multi-term strategies with the intent to maximize the value of its business.”
Industries Qatar implemented another layer of a new optimisation programme to operational costs and workforce with an intent to maintain its competitive position among downstream producers, he said.
“After a careful review of long-term demand and supply for steel in both the domestic and international markets, and the competitive position, the Group decided to reduce its steel mill capacity to approximately to 50 percent of the name-plate capacity. With this decision, it is expected to improve Group’s performance and profitability margins,” he said.
In line with Group’s decision to reduce its steel production capacity, Sulaiti said, the Group also decided to migrate the marketing of steel products back to Qatar Steel to focus only on domestic sales.
He said the decision to acquire a minority stake in Qafco is of strategic importance to the Group, as the same has given the Group with full control over the world’s largest single-site urea producer in terms of its operating, investing and financing
decisions.
“The acquisition also allowed the Group to enter into a new, long term and more favourable gas price agreement with Qatar Petroleum. The new GSPA is expected to bring additional financial benefits to the Group driven via improved production efficiency and profitability margins,” he said.IQ shareholders approve dividend distribution of QR0.33 per share
