File photo used for demonstrations purposes.
Doha: Industries Qatar (“IQ” or “the Group”; QE Ticker: IQCD), yesterday reported a net profit of QR3.5bn for the nine-month period ended 30 September 2024, representing an increase of 7 percent compared to the same period of last year.
Global economic growth is encountering challenges due to the lingering effects of tight monetary policies aimed at combating inflation.
Although some central banks have started easing interest rates, the prolonged period of high rates continues to suppress industrial activities, particularly in advanced economies, and did not allow them to fully recover from the macroeconomic troughs.
In the petrochemical sector, producers face notable hurdles due to accumulation of capacity expansion, especially in China, and relatively higher energy costs in Europe.
These factors have led to depressed margins and necessitated consolidation and capacity rationalization among some companies.
The Group’s operations continue to remain stable and reliable as production volumes for the current period marginally improved versus 9M-23.
On a quarter-on-quarter basis, production volumes improved versus 2Q-24 amid planned and unplanned shutdowns during 2Q-24.
Production volumes broadly improved across most segments during the current quarter with facility reliability, availability, and utilization improving on the previous quarter.
The Group reported a consolidated net profit of QR3.5bn for the nine-month period ended 30 September 2024, with a moderate improvement versus 9M-23. EBITDA for the period also improved versus the same period of last year.
The Group revenue for 9M-24 moderately declined compared to 9M-23.
Reduction in revenue for the current period was primarily due to an overall decline in average selling prices.
Blended average product prices marginally declined versus 9M-23 and contributed negatively to the group net earnings compared to the same period of last year.
During the current quarter 3Q-24, IQ’s net earnings inclined versus 2Q-24 to reach QR1.2bn.
This improvement was primarily due to higher gross margins in the polyethylene and fertilizer segment owing to lower operating costs primarily cost of goods sold.
However, this improvement was partially offset by lowered non-operating income as the steel segment recorded one-off other income in Q2 2024 on account of reversal of previously provided bank guarantee to the one of the segment’s associates.
From a segmental perspective, Petrochemical segment’s performance improved notably versus the last quarter on the back of improved volumes as the segment polyethylene facilities were on maintenance during the second quater of 2024. Petrochemical prices broadly remained unchanged versus the previous quarter.
During Q3 2024, IQ’s net earnings remained relatively stable compared to the same quarter last year.
The EBITDA margin declined marginally, primarily due to the aforementioned increase in operating costs and lower other income.
Despite the improved profitability, the segment’s revenue decreased in the nine month period of 2024 compared to the same period of the previous year.
On a quarter-on-quarter basis, segmental profit declined versus Q2 2024 mainly on account of recognition of a one-off non-recurring other income in the second quarter of 2024 relating to reversal of bank guarantee that provided to one of its associates.
Industries Qatar will host an Earnings call with investors to discuss the latest results, on Monday, 4th November 2024 at 1:30 pm Doha time.
The IR presentation that accompanies the conference call will be posted on the ‘financial information’ page within the Investor Relations section at IQ’s website.
