Industries Qatar Discloses 2012 Financials with QR 8.44 billion in Net Profit

Doha, February 24 (QNA) - Qatar Industries Company (IQ) has disclosed the financial statements for the year ended December 31, 2012. The financials revealed a net profit of QR 8.44 billion in 2012 versus QR 7.93 billion in 2011. The Company s Earnings per Share (EPS) in 2012 amounted to QR 15.35 versus QR 14.42 in 2011. The board of Directors recommended a dividend payout per share of QR 8.5 Riyal, representing 85% of nominal value. Industries Qatar confirmed that the QR 550.0 million equity restructuring proposed by the Board of Directors in their meeting convened on February 21, 2013 will result in the company's shareholders receiving an additional 10% of shares, i.e. 1 share for each 10 shares held, and total issued share capital increasing from 550 million shares to 605 million shares. The proposal is subject to approval by the general assembly. In comments issued to the Qatar Exchange after the group’s first Board of Directors meeting for 2013, H.E. Dr. Mohammed Bin Saleh Al-Sada, Minister of Energy and Industry, Chairman and Managing Director of Industries Qatar, stated, "The close of the financial year ended December 31, 2012 marked the end of an era for Industries Qatar. The group has now completed 10 years since its IPO in 2003 and, with revenue of QR 18.7billion and net profit of QR 8.4 billion, registered its best financial results on record. "Over this period, IQ successfully fulfilled its core mandates of consolidating and managing a central component of economic diversification of the value added chain in Qatar, and secondly, ensuring a wide cross-section of Qatari nationals can benefit from the State’s substantial gas reserves. Net profits have grown from QR 1.1 billion in 2003 to QR 8.4 billion in the year ended December 31, 2012, with total assets increasing from QR 8.7 billion to QR40.2 billion over the same period. The group’s operations have increased to include new products, new markets and facilities in new geographies. And, the Owners Equity has increased from QR 5 billion at the inception to exceed QR 30 billion by the end of 2012," he added. "The previous financial year was also noteworthy as it witnessed the launch of the group’s remaining major CAPEX projects, namely Waco 5 and 6, and LDPE-3,"Dr. Al Sada said. Elaborating on the group’s revenue performance, Abdulrahman Ahmad Al- Shaibi Title Chief Coordinator Company Al-Shaibi said, "The group recorded revenue of QR 18.7 billion for the year ended December 31, 2012, representing an increase over the same period of 2011 of 13%. This increase can be attributed to volume-driven growth across all segments. In line with international trends, the group experienced price weakness across its suite of key products, with the exception of methanol and MTBE where prices bucked the trend and grew by 9% and 5% respectively." Fourth quarter revenue dipped on the previous quarter, however, on reduced urea and steel output and subdued steel prices. Utilisation3 rates across the group were marginally down, and closed the fourth quarter at 101%, he explained. Al-Shaibi reiterated previously reported comments from Dr. Mohammed Yousef Al-Mulla, Vice Chairman and CEO of Qapco, the group’s petrochemical joint venture, with regards to the new QR 18.2 billion Ras Laffan petrochemical complex in which IQ has a 16% stake, "The project is on track, and no changes to either the timetable, product list, shareholder names or participation is under consideration. The petrochemical complex remains an important part of IQ s growth and diversification plans for the latter part of the decade. "The complex, which will be built at an estimated cost to IQ of QR 2.9 billion, includes a world-scale steam cracker, and is expected to significantly boost ethylene (224,000 MT/PA) and LLDPE (69,000 MT/PA) production, and add HDPE (136,000 MT/PA) and polypropylene (122,000 MT/PA) to the group’s product list. A heads of agreement for the project was signed with Qatar Petroleum in the early part of 2012, and Qapco was subsequently appointed project manager. Front-end engineering design is currently underway. In line with our unwavering commitment to transparency, the market will be suitably informed in a timely and accurate manner if there are any material changes to the above assumptions." "Qapco s third LDPE plant, with LDPE design plate capacity of 300,000 MT/ PA and a final construction cost of QR 1.8 billion, officially commenced operations in July, 2012 and commercial production was declared in the following month. Year-to-date cumulative production at the plant was 91,000 MT of LDPE with the plant closing the year with utilization of 84%. The launch of the plant will allow the group to convert the majority of its excess ethylene to the higher value LDPE, with the remaining ethylene sales volume to be almost exclusively maintained for the company s joint venture, Qatar Vinyl Company Limited QSC." "Significant progress is being made on the group’s steel investment in Algeria," continued Mr. Al-Shaibi. "Qatar Steel holds a 50% stake in a special purpose vehicle, Qatar Steel International, which in turn has a 49% share in a joint venture formed with the government of Algeria and other local parties called Group Industrial Sider City Chaiba BP which was established to develop a 2.0 million MT/PA integrated steel mill in Algeria. "The first phase of the project envisages a direct reduction plant, steel melt shop and rolling mill being built at a cost to Qatar Steel of QR 0.5 billion, with a commercial launch date of 2017. A conditional joint venture agreement was signed in January 2013, and initial due diligence is currently in progress," he said. Commenting on the significance of the Saudi Arabian investment, Mr. Al-Shaibi stated, "The group’s investment in Saudi Arabia is significant for a number of reasons. Firstly, Saudi Arabia is our largest, steel export market, and any investment that strengthens our position in this large, growing market is critical. Secondly, our steel subsidiary has secured an offtake agreement with SOLB Steel whereby Qatar Steel will supply up to 600,000 MT/PA of DRI. This will provide an assured market to Qatar Steel allowing it to operate its direct reduction facilities at full utilization. Lastly, and most importantly, this investment, along with Qatar Steel s Algerian joint venture, exemplifies the operator model Industries Qatar is seeking to replicate across all of its businesses. Qatar Steel currently operates the region s oldest integrated steel mill, and one of the most profitable of its kind in the world. This experience and operational excellence can be replicated and monetized for the benefit of countries with developing steel industries." "The Board of Directors approved the group’s 5-year business plan for the period from 2013 to 2017," continued Mr. Al-Shaibi. "It is important to note, however, that the business plan only includes capital investments that have been approved by the Board of Directors - pipeline investments, of which the group has several at various stages of evaluation, are not included. "The key headline numbers for the current business plan are as follows: net profit is expected to remain on par with 2012 levels as moderate incremental volume and minimal price inflation is offset by rising production costs. Accumulated capital spend over this period, consisting of routine and non-routine CAPEX, and investments, is expected to be circa QR 6 billion as the group incurs initial costs related to QP - Qapco / Ras Laffan Petrochemical Complex, completes existing major CAPEX projects, and implements a number of medium-sized upgrade, renovation and shutdown related initiatives. The group has also rescheduled one of its major planned maintenance shut-downs in the petrochemical segment from Q1, 2013 to Q1, 2014.Major debt levels are expected to continue to fall and distributable cash to correspondingly raise," he added. (QNA)