INDUSTRIES QATAR Q.P.S.C. CLASSIFICATION: C0 - NON-CONFIDENTIAL
FOR IMMEDIATE RELEASE
Industries Qatar reports a net profit of QR 8.1 billion
for the year ended 31 December 2021
Board of Directors recommends a cash dividend of QR 1 per share,
equating to 100% of the nominal share value
- IQ sets another record with highest yearly revenue since incorporation, while benefitting from constructive macroeconomic drivers
- Earnings per share (EPS) of QR 1.34 for 2021, as compared to QR 0.321 for the full year 2020
- Prices across IQ's product range remained strong throughout 2021 aided by strong demand, tightened supplies, higher energy prices and supply- chain bottlenecks
- IQ successfully concluded one of its major turnaround programs at its polyethylene facilities during Q4-21 without any major safety incidence
Doha, Qatar; 7 February 2022: Industries Qatar ("IQ" or "the Group"; QE Ticker: IQCD), today reported a net profit of QR 8.1 billion for the financial year ended 31 December 2021, representing an increase of 321% compared to last year.
Commenting on the Group's financial and operational performance for the year, H.E. Eng. Saad Sherida Al-Kaabi,Chairman of the Board of Directors, said:
"2021 was an exceptional year where the Group has strongly risen from last year's challenges. During this year, we captured the benefits of a solid commodity price environment, underpinned by renewed product demand. As we report a very strong performance for 2021, I would like to thank the Board of directors, Chief executive officers, senior management and all the employees of Qapco, Qafac, Qafco and Qatar Steel without whom we would not have achieved these excellent results.
Some headwinds amid supply chain bottlenecks persisted throughout the year, but QatarEnergy's marketing and logistics efforts resulted in a strong support to our entities, while ensuring volumes remained unaffected without any operational disruption.
Going forward, we will continue to thrive for operational excellence by focusing on our human capital and environment responsible growth. Our commitment to growth will sure not come at the expense of cost and sustainability. We will continuously be at the level of our shareholders' confidence and create long term value".
1 Net profit and earnings per share for the year ended 31 December 2020 includes retrospective effects of acquisition of Qafco's 25% stake, with effect from 1 January 2020
IQ results for the year ended 31 December 2021 | Page 1 of 7 |
CLASSIFICATION: C0 - NON-CONFIDENTIAL
Updates on macroeconomic environment
During the year, elevated consumer spending, continued government stimuli, normalization of investments resulted in an accelerated global GDP recovery, which led to a notable increase in demand for downstream commodities. On the other hand, industry supply remained constrained due to weather calamities in the US, higher energy prices in Europe, dual policy measures in China, coupled with supply chain bottlenecks that remained evident at global scale throughout the year. These factors created a wider supply-demand imbalance across most of the commodities and played pivotal part in persistent inflationary price trends.
Operational performance updates
Key performance indicators | YE-21 | YE-20 | Variance | Q4-21 | Q3-21 | Variance |
(%) | (%) | |||||
[YE-21 vs | [Q4-21 vs | |||||
YE-20] | Q3-21] | |||||
Production (MT' million) | 15.3 | 15.8 | -3% | 3.6 | 3.9 | -7% |
Plant utilization rates (%) | 96% | 93% | -- | 91% | 98% | -- |
Average reliability factor (%) | 97% | 95% | -- | 94% | 97% | -- |
Group's operations remained strong with production volumes for the full year reaching 15.3 million MT's, marginally down by 3% versus last year. This marginal reduction was driven by several factors including the Group's strategic decision to mothball part of its steel facilities in April'20, major maintenance turnaround carried out at polyethylene facilities, commercial shutdown at MTBE facilities, coupled with planned and unplanned maintenance mainly at fertilizer facilities. Plant utilization rates for the year 2021 reached 96%, while average reliability factor stood at 97%.
During Q4-21, polyethylene facilities successfully concluded a major turnaround without any significant HSE incidents and encompassed most of the plants within the polyethylene business. The reduction in production volumes during Q4-21 in comparison to Q3-21 was mainly linked to polyethylene facilities' turnaround and planned and unplanned shutdown carried within fertilizer facilities.
Financial performance updates - YE-21vs YE-20
Key financial performance indicators2 | YE-21 | YE-20 | Variance (%) |
Average selling price ($/MT) | 597 | 379 | +58% |
Sales volumes (MT' 000) | 9,505 | 7,943 | +20% |
Revenue (QR' billion) | 20.2 | 11.4 | +77% |
EBITDA (QR' billion) | 10.2 | 4.1 | +152% |
Net profit (QR' billion) | 8.1 | 1.9 | +321% |
Earnings per share (QR) | 1.34 | 0.32 | +321% |
EBITDA margin (%) | 51% | 36% | -- |
Note: Revenue and EBITDA measures have been reported based on non-IFRS based proportionate consolidation
Group reported a net profit of QR 8.1 billion with growth of 321% versus last year. Group revenue significantly improved by 77% to reach a record of QR 20.2 billion as compared to QR 11.4 billion for year ended 31 December 2020. Earnings per share (EPS) amounted to QR 1.34 for the year, versus QR 0.32 for last year. Driven by impressive operating cash flows, EBITDA increased by 152% and reached to QR 10.2 billion.
2 All the financial performance indicators relating to YE-20 includes retrospective effects of acquisition of Qafco's 25% stake, with effect from 01 January 2020
IQ results for the year ended 31 December 2021 | Page 2 of 7 |
CLASSIFICATION: C0 - NON-CONFIDENTIAL
Group's financial performance for the year in comparison to last year was largely attributed to many factors, including:
-
Product price improvement:
Blended product prices surged significantly by 58% versus last year and reached to USD 597/MT. The growth in product prices translated into an increase of QR 8.5 billion in Group's net earnings. This price increase was linked to elevated market prices across all the segments, with fertilizer segment reporting a contribution of QR 5.3 billion, while petrochemicals segment contributed QR 2.3 billion towards the overall growth in profitability versus 2020. Steel segment contributed QR 0.9 billion to earnings' growth versus last year. - Improvement in sales volumes:
Sales volumes increased by 20% versus last year, primarily driven by additional volumes relating to Qafco trains 1-4, which operated under a temporary gas processing arrangement during the first seven months of 2020. Nevertheless, this growth in volumes was partially offset by a large turnaround carried out at the Group's polyethylene facilities, mothballing of certain steel facilities, commercial shutdown at fuel additives facilities, and planned and unplanned shutdowns at some of the fertilizer trains. - OPEX:
Group operating expenses increased by 25% versus last year. This increase was attributed to higher variable cost on account of increased sales volumes and raw material cost inflation. On the other hand, the Group continue to benefit from the cost optimization initiatives implemented in the second half of 2020.
Financial performance updates - Q4-21vs Q3-21
Key financial performance indicators | Q4-21 | Q3-21 | Variance (%) |
Average selling price ($/MT) | 790 | 595 | +33% |
Sales volumes (MT' 000) | 2,147 | 2,352 | -9% |
Revenue (QR' billion) | 6.0 | 5.0 | +21% |
EBITDA (QR' billion) | 3.2 | 2.6 | +23% |
Net profit (QR' billion) | 2.5 | 2.1 | +17% |
Earnings per share (QR) | 0.41 | 0.35 | +17% |
EBITDA margin (%) | 53% | 52% | -- |
Note: Revenue and EBITDA measures have been reported based on non-IFRS based proportionate consolidation
During Q4-21, Group revenue and net profit improved sharply versus last quarter. The benefits gained from improved selling prices were more than adequate to offset sales volumes lost due to planned maintenance and unplanned shutdowns. EBITDA for the quarter improved significantly by 23% to reach QR 3.2 billion.
Average product prices climbed by more than 33% primarily driven by higher polyethylene and fertilizer prices. Fertilizer prices continue to reach new highs against a backdrop of strong demand, healthy agricultural economics, lower inventory levels and export restrictions imposed by key producing countries. Petrochemical prices advanced moderately versus the previous quarter in line with higher crude prices and improved demand.
IQ results for the year ended 31 December 2021 | Page 3 of 7 |
CLASSIFICATION: C0 - NON-CONFIDENTIAL
Financial position
Key performance indicators | As at | As at | Variance (%) |
31-12-21 | 31-Dec-20 | ||
Cash and bank balances (QR' billion) | 16.0 | 9.8 | +63% |
Total Assets (QR' billion) | 42.3 | 35.9 | +18% |
Total Equity (QR' billion) | 39.5 | 33.6 | +18% |
Note: Cash and bank balances has been reported based on non-IFRS based proportionate consolidation
Group's financial position continue to remain robust, with cash and bank balances at QR 16.0 billion as of the end of 31 December 2021, after accounting for a dividend payout for the financial year 2020 amounting to QR 2.0 billion. Currently, the Group has no long-term debt obligations. Group's reported total assets and total equity reached QR 42.3 billion and QR 39.5 billion, respectively, as of 31 December 2021. Driven by strong EBITDA performance during the current financial year, the Group generated positive operating cash flows3 of QR 9.4 billion, with free cash flows3 of QR 8.1 billion.
Segmental performance highlights
Petrochemicals:
Key performance indicators | YE-21 | YE-20 | Variance | Q4-21 | Q3-21 | Variance |
(%) | (%) | |||||
[YE-21 vs | [Q4-21 vs | |||||
YE-20] | Q3-21] | |||||
Production (MT' 000) | 2,640 | 2,733 | -3% | 513 | 739 | -31% |
Average selling price ($/MT) | 882 | 569 | +55% | 904 | 854 | +6% |
Sales volumes (MT' 000) | 1,925 | 1,976 | -3% | 407 | 520 | -22% |
Revenue (QR' million) | 5,981 | 3,962 | +51% | 1,295 | 1,567 | -17% |
Net profit (QR' million) | 2,479 | 1,065 | +133% | 306 | 678 | -55% |
Note: The above figures have been reported based on non-IFRS based proportionate consolidation
Petrochemicals segment reported a net profit of QR 2.5 billion for the year ended 31 December 2021, up by 133% versus last year. This significant increase was primarily linked to improved product prices owing to better macroeconomic dynamics and supply bottlenecks. The performance of the segment was affected to an extent due to a decline in production volumes on account of a major turnaround carried out at most of the polyethylene facilities during the fourth quarter of the year.
Blended product prices for the segment improved by 55% versus last year, with polyethylene (LDPE) prices showing a marked improvement of 57%. Sales volumes, on the other hand, declined marginally due to maintenance turnaround at PE facilities and a commercial shutdown within fuel additives facilities. Segmental revenue for the year reached QR 6.0 billion, with an improvement of 51% versus last year, amid improved price environment.
Q4-21 revenue decreased by 17% as compared to Q3-21, mainly due to a decline in sales volumes associated with lower production at polyethylene facilities linked to the maintenance turnaround despite a marginal improvement in selling prices. Decline in revenue led to a significant reduction in net profit during Q4-21, which decreased by 55% versus Q3-21.
3 Reported based on non-IFRS based proportionate consolidation
IQ results for the year ended 31 December 2021 | Page 4 of 7 |
CLASSIFICATION: C0 - NON-CONFIDENTIAL
Fertilizers:
Key performance | YE-21 | YE-20 | Variance | Q4-21 | Q3-21 | Variance |
indicators | (%) | (%) | ||||
[YE-21 vs | [Q4-21 vs | |||||
YE-20] | Q3-21] | |||||
Production (MT' 000) | 9,614 | 9,687 | -1% | 2,411 | 2,367 | +2% |
Average selling price ($/MT) | 488 | 243 | +100% | 781 | 481 | +62% |
Sales volumes (MT' 000) | 5,973 | 4,330 | +38% | 1,360 | 1,585 | -14% |
Revenue (QR' million) | 10,283 | 4,405 | +133% | 3,750 | 2,691 | +39% |
Net profit (QR' million) | 4,720 | 733 | +544% | 2,122 | 1,207 | +76% |
Note: Figures for YE-20 includes retrospective effects of acquisition of Qafco's 25% stake, with effect from 01 January 2020
Fertilizer segment reported a net profit of QR 4.7 billion for the year ended 31 December 2021, with an increase of 544%, versus last year. This increase was primarily driven by revenue growth which grew by 133%, to reach QR 10.3 billion. Selling prices improved significantly by 100% versus last year and reflected positively on the segmental performance and led to improved EBITDA margins. Rising energy prices, restricted supply from key exporting economies, together with strong demand from key crop- growing regions has been a driving force behind soaring fertilizer prices.
Sales volumes increased by 38% during 2021 versus 2020, as full volumes relating to Qafco trains 1-4 were recorded as part of 2021, as against an absence of volumes for the first seven months of 2020, amid temporary gas processing arrangement. Production within the segment slightly declined by 1% compared to last year.
Q4-21 segmental revenue was significantly up by 39% compared to Q3-21, primarily on account of persistent inflationary trends in fertilizer prices, which on an average increased by 62% on a quarter-on- quarter basis. This was partially off-set by a 14% decline in sales volumes, amid lower product shipments due to commercial and logistical factors. Growth in revenue led to a growth in segment's net earnings which increased by 76% compared to Q3-21.Q4-21 production volumes slightly increased by 2% versus Q3-21.
Steel:
Key performance indicators | YE-21 | YE-20 | Variance | Q4-21 | Q3-21 | Variance |
(%) | (%) | |||||
[YE-21 vs | [Q4-21 vs | |||||
YE-20] | Q3-21] | |||||
Production (MT' 000) | 3,035 | 3,367 | -10% | 700 | 777 | -10% |
Average selling price ($/MT) | 664 | 507 | +31% | 702 | 781 | -10% |
Sales volumes (MT' 000) | 1,608 | 1,638 | -2% | 381 | 246 | +55% |
Revenue (QR' million) | 3,886 | 2,995 | +30% | 973 | 701 | +39% |
Net profit (QR' million) | 716 | -1,314 | +155% | 87 | 133 | -34% |
Following the strategic restructuring initiatives implemented last year, steel segment returned to profitability in 2021. Steel segment reported a net profit of QR 716 million for the year ended 31 December 2021, after incurring a net loss QR 1.3 billion for last year. This noticeable improvement was mainly due to multiple factors including:
- Selling prices improvement: selling prices improved by 31% compared to last year, due to increase in demand linked to a rebound in construction activity. Iron ore prices on the other hand remained volatile with a significant price hike noted during the early parts of the year, followed by recent lower trajectories.
IQ results for the year ended 31 December 2021 | Page 5 of 7 |
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IQ - Industries Qatar QSC published this content on 07 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 February 2022 16:49:02 UTC.
