(MENAFN- The Peninsula) Industries Qatar (IQ), the region's industrial giant with interests in the production of a wide range of petrochemical, fertiliser and steel products, recorded a net profit of QR2.8bn for the first half of 2014 (H1, 14).
IQ's net profit for second quarter of 2014 slipped by QR0.3bn to QR1.2bn over the previous quarter due to a series of major shutdown programme.
The group's revenue for the six months was recorded at QR3.1bn, an increase of QR0.05bn, or 1.6 percent. On the same period of 2013, however, on a like-for-like basis, management reporting revenue was QR8.6bn, a decrease of QR1.3bn, or 13.4 percent. Reported revenue for the second quarter of 2014 was QR1.8bn, an increase of QR0.5bn, or 37.5 percent, compared to first quarter, which was primarily driven by the operation of EF-5.
In a filing to the Qatar Exchange, H E Dr Mohamed bin Saleh Al Sada, the Minister of Energy and Industry and the Chairman and Managing Director of Industries Qatar, stated the decrease of QR0.3bn in the net profit for the second quarter of 2014 over the first quarter was because of the group's series of major shutdown programme including warranty shutdowns that were planned for the first half of 2014."
"These preventive maintenance and warranty shut-downs are an essential requirement for large, industrial facilities as they can help minimise unplanned disruption, ensure product quality is maintained and, ultimately, contribute to an extension of the plants' production life, improved reliability, and optimise environmental impact. I can now confirm that the significant portion of the planned shutdowns has been completed and the group's facilities are much more sustainable than ever before and paving the way for a new era of growth and operational excellence," he said.
"The results were also impacted by a steeper decline in the fertiliser prices in the current quarter due to difficult trading conditions in the fertiliser segment". The inclusion of Industries Qatar to the MSCI Index clearly signifies MSCI's recognition of IQ's contribution to the state's capital market development. The liquidity position across all the group continue to remain very strong at QR6.3bn despite of having a moderate financial results in the first half of the year and after distributing the previous year's record QR6.7bn dividend," the minister said.
Briefing on the group's first half year financial performance, Abdulrahman Ahmad Al Shaibi, Chief Coordinator, Industries Qatar said: "The muted year-on-year financial results can be primarily attributed to reduced sales volumes following extensive planned preventive maintenance and warranty shut-downs in the majority of the group's key facilities, and tightened operating margins primarily due to weaker fertiliser prices, increased operating expenses and annual cost inflation, which were only partially dampened by the commercial launch of Qatar Steel's QR1.2bn EF-5 facility."
IQ's petrochemical segment's revenue for the first six months of 2014 was QR2.9bn, a year-on-year decrease of QR0.4bn, or 11.4 percent. "Petrochemical prices, on the other hand, were buoyant with strong demand and global supply limitations particularly aiding polyethylene prices," remarked Al Shaibi.
The fertiliser segment closed the first half of 2014 with muted revenue of QR2.5bn, a decline of QR1bn, or 28.2 percent, versus the first six months of 2013. This decline was primarily attributable to both significant reduction in sales volumes and selling prices.
Steel segment reported revenue of QR3.1bn for the first six months of 2014, a marginal increase on the same period of 2013 of QR0.05bn, or 1.6 percent, and significantly up on the first quarter of 2014 by QR0.5bn, or 37.5 percent.
Consolidated EBITDA for the six months ended June 30, 2014 was QR2.9bn, a decrease of QR1.9bn, or 37.2 percent, on the same period of 2013, and a QR0.3bn, or 20.9 percent, drop on the previous quarter.
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