Industries Qatar Q1 petrochemical revenues slip 14.7%

28 Apr '14

3 min read

Industries Qatar, one of the region’s industrial giants with interests in the production of a wide range of petrochemical, fertiliser and steel products, announced its financial results for the three months ended March 31, 2014 with net profit of QR 1.6 billion.

Financial Results

Commenting on the group’s first quarter financial performance, Mr. Abdulrahman Ahmad Al-Shaibi, Chief Coordinator, Industries Qatar, stated, “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 on increased selling expenses and annual cost inflation, which were only partially dampened by the commercial launch of Qatar Steel’s QR 1.2 billion EF-5 facility.”

Revenue

Reported revenue for the three months ended March 31, 2014 was QR 1.3 billion, a decrease of QR 0.3 billion, or 20.6%, on the same period of 2013 (2013, Q1: QR 1.7 billion); however, on a like-for-like basis, management reporting revenue - assuming proportionate consolidation - was QR 4.2 billion, a decrease of QR 1.1 billion, or 20.9%.

Petrochemical Segment

Petrochemical revenue for the first three months of 2014 was QR 1.5 billion (2013, Q1: QR 1.7 billion), a year-on-year decrease of QR 0.2 billion, or 14.7%. This reduction followed extensive, planned shutdowns across all plants in the segment: Qapco’s ethylene plants lost an average of 36 days per plant, versus planned downtime of 35 days, LDPE units an average of 29 days per plant, against a plan of 34 days, and the LLDPE facility lost 18 days, in comparison to a plan of 11 days, following the general shut-down.

And, the group’s fuel additives joint venture, Qafac, recorded a total of 27 days of downtime across its methanol and MTBE plants following routine, planned maintenance, compared to a budget of 18 days. In total, the segment recorded an adverse volume variance of QR 0.3 billion and a 93,000 MT reduction in sales volume.

Quarterly utilisation rates were similarly affected, with the segment averaging 82% in comparison to its historical average of between 95% and 110%. Product prices, however, were buoyant with strong demand and global supply limitations particularly aiding LDPE, which registered a 9.9% year-on-year increase, and methanol, which closed at a 5-year high of $476 per MT.

First quarter revenue was down on the previous quarter by QR 0.7 billion, or 31.1%, following the segment’s planned maintenance during the quarter, and due to strong comparatives as in the prior year production and, accordingly, sales were ramped up to take advantage of favourable market conditions and in anticipation of the impending maintenance shut-down.

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Industries Qatar

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