(MENAFN- The Peninsula) Mesaieed Petrochemical Holding Company (MPHC), a subsidiary of Qatar Petroleum and one of the region's premier diversified petrochemical conglomerates, has recorded a net profit of QR899.4m for the half year ended June 30, 2014.
In comments issued to the Qatar Exchange, H E Dr Mohamed bin Saleh al Sada (pictured), the Minister of Energy and Industry, and Chairman of Mesaieed Petrochemical Holding Company, stated: "MPHC closed the half year ended June 30, 2014 with strong earnings of QR899.4m clearly indicating the group's ability to generate strong profits and cash flows. All group companies exceeded their budgeted expectations. In addition, cash generation remained strong, with a total of QR894.8m of cash from operations across all group companies for the half year. These results bode well for the balance of year outlook."
Commenting on the results Khalid Al Subaey, Chief Coordinator, MPHC said: "The group maintained strong EBITDA margins for the half year ended June 30, 2014 which was aided by resilient key product prices, supply of competitively priced ethane feedstock and fuel gas under long-term supply agreements with Qatar Petroleum and the recognition of a tax refund from the Public Revenues and Tax Department. Cash across all group companies as at June 30, 2014 remained at QR1.6bn indicating the group's strong cash position. The utilisation rates remained strong except during general shutdown of QVC plants."
The group consists of six companies, with three of them directly held: MPHC holds 49 percent of the issued share capital of each of Qatar Chemical Company Ltd QSC (Q-Chem) and Qatar Chemical Company II Ltd QSC (Q-Chem II), and 55.2 percent of the issued share capital of Qatar Vinyl Company Ltd QSC. (QVC). Both Q-Chem and Q-Chem II each have a single, wholly-owned subsidiary, while Q-Chem II also has an effective ownership of 53.85 percent of Ras Laffan Olefins Cracker Company Limited. The group's facilities are all based within the State of Qatar, and are primarily engaged in the production of olefins, polyolefins, alpha olefins, and chlor-alkali products.
Speaking on the combined performance of Q-Chem and Q-Chem II, Al-Subaey stated, "The business unit for the half year ended June 30, 2014 recorded revenue of QR1.8bn with polyolefins constituting 71 percent of revenue, alpha-olefins 26 percent with the remainder attributable to other minor products. The revenue exceeded budget expectations, and was primarily based on strong overall utilisation rates. During the period, circa 216,000 MT of Polyolefins and 88,000 MT of Alpha-Olefins were produced with a combined overall utilisation rate of 103 percent broadly in line with the historical average. In line with the business unit's production and sales strategy, the polyolefin and alpha-olefin production mix was adjusted versus the previous quarter of 2014 in order to take advantage of pricing and market opportunities identified during the quarter."
The net profit for the period was QR836.4m and net profit margin was 47.1 percent, with the difference between net profit and EBITDA primarily due to current and deferred taxes (QR170.7m) and depreciation (QR110.5m).
QVC revenue was QR348.3m from the sale of its chlor-alkali products for the half of 2014. Al Subaey said: "Results were marginally impacted by planned shut-downs of the company's EDC, VCM and caustic soda facilities. This major shut-down started towards the end of February and was completed in May, 2014, and is in accordance with the plants' major maintenance cycles."
QVC's net profit recorded during the period was QR18.3m with a net profit margin of 5.3 percent, while EBITDA was QR59.2m and EBITDA margin of 17 percent. Profit margins were adversely affected by general shutdown and weak comparative selling expenses.
The first half financial report noted that no major production shut-down is planned during the third quarter of 2014.
On the Group taxation, the report noted: "Subject to fulfilling specified conditions in a clarification received from Public Revenues and Tax Department, MPHC is eligible for a tax refund of QR52.1m for the period from the date of the company's listing to the end of the accounting period on June 30, 2014."
"The Board of Directors and senior management look forward to the remainder of the year 2014 with renewed confidence as the company seeks to establish itself as one of the region's premier diversified petrochemical conglomerates", Dr Al Sada said.
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