An urea plant of Qafco, an IQ firm

An urea plant of Qafco, an IQ firm

Lower prices drag down IQ’s earnings

01 March 2016

Petrochemical , metals and fertiliser producer Industries Qatar (IQ) blamed lower product prices for an extended earnings slump, reports Reuters.

Although IQ’s sales volumes hit an all-time high, the state-run firm reported a net profit of QR570 million ($157 million) for the three months to December 31, Reuters calculated based on its annual financial statement.

IQ did not provide its own quarterly earnings breakdown.

The profit figure compares with a quarterly profit of QR1.62 billion in the same period a year earlier, according to data compiled by the news agency.

This means the Middle East’s second-biggest petrochemicals company by market value has posted falling profits in nine of the past 11 quarters.

Sico Bahrain and QNB Financial Services had forecast IQ would deliver a quarterly profit of QR1.16 billion and QR1.11 billion respectively.

IQ’s results are closely tied to oil prices and global economic growth because its products are used extensively in construction, agriculture, industry and manufacturing.

The group’s annual profit in 2015 was QR4.4 billion, down from QR6.3 billion in 2014, according to a company statement that revealed last year’s sales volumes rose about 10 per cent year-on-year to reach a record high.

But sales prices tumbled over the same period. IQ said petrochemical prices fell 28 per cent due to the sustained slump in oil prices and fertiliser prices were 15 per cent lower because of excess supply. Steel prices also fell following a construction slowdown in most of IQ’s export markets.

The company’s board has proposed a cash dividend for 2015 of QR5 per share, according to the statement. This is less than the QR7 the company paid for 2014.

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