Industries Qatar's Q1 net profit at QR0.7bn

Date

4/25/2016 1:31:30 PM

(MENAFN- The Peninsula)

DOHA: Industries Qatar 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 QR0.7bn for the first quarter of 2016 ( Q1 2016).

The group posted impressive performance across all operating segments amidst the challenging macro-economic environment. All operating segments within the group continued to operate under tough trading conditions similar to those experienced over the last twelve to eighteen months where product prices experienced severe setbacks.

The group was able to increase its production and sales versus last year. Prices of the petrochemical products remained somewhat low compared to last year in line with their close correlation with the crude oil prices whilst the demand for petrochemical products remained muted due to unfavourable economic conditions in some of the key markets.

Petrochemicals sales volumes however improved on last year due to improved production despite an unplanned shutdown of one of the key petrochemicals facilities during the current year. Fertiliser prices on the other hand were significantly down on last year due to a combination of factors including lower energy prices lower demand currency depreciation in some economies and expected capacity additions in some of the key supplier markets.

Sales volumes however was up on last year in line with higher production due to lower facility maintenance in the current year. Prices in steel segment were also down year-on-year due to muted demand in the major regional markets following the cut on capital expenditure together with availability of cheap steel from non-GCC producers especially China and Turkey.

Reported revenue under IFRS 11 for the period was QR1.1bn a moderate decrease of 12.6 percent over the same period of 2015. This year-on-year reduction was due to a significant fall in the prices of the group’s steel products following the muted demand and excess supply in the key markets despite the improved sales volumes.

On the other hand on a like-for-like basis management reporting revenue – assuming proportionate consolidation under IAS 31 - was QR3.4bn a decrease of QR0.4bn or 10.6 percent versus the same period of 2015. This year-on-year reduction was primarily driven by a significant reduction in the product prices across all segments most notably in the prices of fertilisers and steel prices and muted demand in some of the major buying countries.The Peninsula

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