(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 QR6.3bn net profit for the year ended December 2014, a decrease of QR 1.7bn, or 20.8 percent, against 2013.
Results in the second half of the year showed a significant improvement over the first half of 2014, with the consolidated net profit improving by QR0.7bn, or 23.5 percent.
The adverse year-on-year variance resulted as the business was impacted by reduced sales volumes following extensive planned preventive maintenance and warranty shut-downs during the year, weak urea prices and heightened operating costs in the petrochemical and steel segments.
Reported revenue for the full-year was QR6bn, a marginal increase of QR 0.1bn, or 2.5 percent, over the previous year; on a like-for-like basis, management reporting revenue - assuming proportionate consolidation under IAS 31 (International Accounting Standard) - was QR18.2bn, a decrease of QR1bn, or 5.4 percent, versus the same period of 2013.
Results in the second half of the year showed a significant improvement over the first half of 2014 with the return to normal operations following the extensive maintenance downtime experienced across all segments: consolidated net profit improved by QR0.7bn, or 23.5 percent, with the petrochemical and fertiliser segments registering growth of 48.7 percent and 31.9 percent respectively.
Earnings in 2014 were supported by the launch and subsequent ramp-up of Qatar Steel's EF-5 facility in the first quarter and Qafac's CDR plant in the third quarter, as well as by strong full year average key petrochemical product prices. However, the group faced significant challenges from extended, planned shut-downs noted across all plants during the first half of the year, continued weak urea prices, and heightened operating costs.
The petrochemical segment closed the year with revenue of QR6.8bn assuming proportionate consolidation under IAS 31, a year-on-year decrease of QR0.5bn, or 6.8 percent. Petrochemical revenue for the fourth quarter of 2014 was QR1.8bn, a decrease of QR 0.2bn, or 9.2 percent, on the previous quarter.
The fertiliser segment closed the year with a revenue of QR5.5bn, a reduction of QR0.7bn, or 11.2 percent, against the same period of 2013. The year-on-year decline in fertiliser revenue follows significant sales volume reductions mainly due to planned and warranty shut-downs across several fertiliser trains, and moderately weak weighted average urea prices.
Revenue in the steel segment totalled QR6.0bn, a moderate increase of QR0.1bn, or 2.5 percent, compared to the same period of 2013. The benefit to the group's steel business of the launch and ramp-up of the new EF-5 facility in the first quarter of 2014 was partially offset by moderate re-bar price decline, reduced operating days due to planned and unplanned disruption, and strong prior year comparatives.
Consolidated EBITDA for the year was QR6.6bn, a decrease of QR1.6bn, or 19.4 percent, on the prior year. On a like-for-like basis, EBITDA - assuming proportionate consolidation under IAS 31 - was QR8bn, a decrease of QR1.5bn, or 16.2 percent, versus 2013. The adverse year-on-year movement is attributable to the same reasons as the net profit variance.
The Board of Directors, in their meeting held on January 8, proposed a total annual dividend distribution of QR4.2bn, equivalent to a payout of QR7 per share and representing 70 percent.
The group faced significant challenges in 2014 with the extensive major shutdown programme, and weak fertiliser prices. However, the full year results are testament to the financial and operational resilience of the group, as earnings nevertheless still surpassed budgeted expectations by over 12 percent. The group looks forward to 2015 with a firm belief in the group's competitive advantages and the knowledge that Industries Qatar is in a financially-sound position and is well-equipped for the future, the company said in a statement yesterday.
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