Market heavyweight Industries Qatar (IQ) – a holding company with interests in the production of fertiliser, petrochemical and steel products, has reported about 12% year-on-year increase in net profit to QR3.3bn in 2017, exceeding the budget expectations.
The company, whose earnings-per-share was QR5.48 at the end of 2017, has proposed a total QR3bn annual dividend distribution, equivalent to a payout of QR5 per share and representing a payout ratio of 91.2%, its spokesman said.
The financial and operational performance is considered “credible” amidst several challenges including the effects of the blockade, unplanned shutdowns in some facilities, a general increase in raw material costs (specifically the cost of raw materials of steel), higher utility prices and muted demand in some geographies, IQ said.
Despite these challenges, IQ maintained its production levels, and sales volumes, reduced the controllable operating expenditure, and marginally improved its selling prices.
Revenue stood flat at QR4.6bn and came amidst several unplanned shutdowns in some facilities, and muted demand in some markets. The stable sales volumes, despite the challenges, affirm the group’s robust operations and its ability to operate under tough trading conditions.
IQ’s robust business continuity programmes and the timely support of marketing partner, “Muntajat”, supported it in maintaining sales volumes.
On the other hand, on a like-for-like basis, management reporting revenue – assuming proportionate consolidation – was QR14.3bn, improving slightly over 2016. A slight increase in the price across all segments was the primary reason for the revenue improvement.
Product prices have improved slightly on last year with all segments reporting improvement. The petrochemical segment has shown marked recovery, while the fertiliser and steel segments have shown slight improvements over the last year.
The recovery and stability of the crude oil prices together with reduced supplies, most notably due to unplanned outages in some large facilities in some large economies during the second half of 2017, have contributed to the improvement in the petrochemical prices, IQ said.
Fertiliser prices have shown modest upward momentum, most specifically in the fourth quarter of 2017 on increased demand in some of the large agricultural economies, it said, adding steel prices moved within a narrow range with prices gaining momentum in the later part of the year.
The increase in raw materials costs, short supply of some consumables together with higher demand in some destinations were the key factors in stabilising the prices in the tail end of 2017, the spokesman said.
The group’s financial position remains solid as cash across the group stands at QR10.3bn after paying 2016’s dividend of QR2.4bn, and periodic debt payments amounting to QR2.4bn across the group. Total debt across the group was QR0.5bn, down from QR2.9bn as on December 31, 2016.
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