(MENAFN - The Peninsula) Industries Qatar (IQ), one of the region's industrial giants with interests in the production of a wide range of petrochemical, fertiliser and steel products, recorded a net profit of QR1.6bn for the first quarter of 2014 (Q1, 14), QR0.1bn down from the previous quarter. The drop is mainly due to major maintenance shut-downs.
H E Dr Mohamed bin Saleh Al Sada (pictured), the Minister of Energy and Industry and Chairman and Managing Director of Industries Qatar, said in a filing to Qatar Exchange yesterday: "Industries Qatar closed the first quarter of 2014 with net profit of QR1.6bn, a marginal decrease of QR0.1bn over the fourth quarter of 2013, as the group embarked on a series of extensive, planned major maintenance shut-downs across all segments. These preventive maintenance and warranty shut-downs are an essential requirement for large, industrial plants as they can help minimise unplanned disruption, ensure product quality is maintained and, ultimately, contribute to an extension of the plants' production life."
The closing cash position across all group companies after the first three months of operations and after distributing the previous year's record QR6.7bn dividend, was a robust QR5.9bn.
"We also welcome the completion of the group's latest major project, Qatar Steel's EF-5 facility. The launch of Qatar Steel's QR1.2bn green field steel melt shop project, EF-5, in February, 2014 is an important milestone as the plant's 1.1 million MT PA billets capacity is of strategic and financial importance to both Industries Qatar and the State of Qatar. For IQ, EF-5 is expected to boost Qatar Steel's 2014 earnings through increased domestic sales of billets, and improved supply to the company's wholly-owned subsidiary in the UAE, Qatar Steel FZE. More importantly, this significant increase in billets production capacity will assist the local construction industry's efforts to support the State of Qatar's ambitious construction programme in preparation for the World Cup 2022," Dr Al Sada said.
The group reported a revenue of QR1.3bn for Q1, 14, down 20.6 percent to QR 0.3 billion compared with the same period of 2013. However, on a like-for-like basis, management reporting revenue - assuming proportionate consolidation - was QR4.2bn, a decrease of QR1.1bn, or 20.9 percent.
The group's petrochemical segment revenue for the first three months of 2014 was QR1.5bn against QR1.7bn for Q1, 13, a year-on-year decrease of 14.7 percent. This reduction followed extensive, planned shut-downs across all plants in the segment: Qapco's ethylene plants lost an average of 36 days per plant, versus planned downtime of 35 days, LDPE units an average of 29 days per plant, against a plan of 34 days, and the LLDPE facility lost 18 days, in comparison to a plan of 11 days, following the general shut-down.
The group's fuel additives joint venture, Qafac, recorded a total of 27 days of downtime across its methanol and MTBE plants following routine, planned maintenance, compared to a budget of 18 days.
The fertiliser segment closed the first quarter with a revenue of QR1.4bn, a drop of QR0.5bn, or 26.8 percent. This negative variance was primarily attributable to a 20.4 percent decline in sales volumes as Qafco's two largest production units, trains 5 and 6, commenced mandatory, warranty-related shut-downs in the period.
The Steel revenue was QR1.3bn, a decrease on the same period of 2013 of QR0.3bn, or 20.6 percent, and marginally down on the fourth quarter of 2013 by QR0.07bn or 4.8 percent.
Commenting on the group's net profit for the first quarter, Abdulrahman Ahmad Al Shaibi, Chief Coordinator, IQ, said, "Consolidated net profit in the first quarter was ahead of budgeted expectations as the 30 percent surge in urea prices noted during the first quarter and heightened production levels in the fertiliser segment's unaffected facilities boosted group profits."