Renewed demand for commodity led to IQâs robust recovery: Kaabi
Qatar Tribune
Satyendra Pathak Doha Renewed demand for downstream products led to a robust recovery in Industry Qatarâs financial performance for 2021 from the previou...
Satyendra Pathak Doha Renewed demand for downstream products led to a robust recovery in Industry Qatarâs financial performance for 2021 from the previous years, Minister of State for Energy Affairs and Industries Qatar Chairman and Managing Director HE Saad Sherida Al Kaabi said on Thursday.Addressing the annual general assembly meeting of Industries Qatar (IQ) on Thursday, Kaabi said, âThe year 2021 was marked by improvement in conditions at the macroeconomic level, and a progression of societal reopening which led to a renewed demand for our downstream products. This year also witnessed shortages in supply and logistical obstacles. This demand recovery along with limited supply allowed commodity prices to recover notably from last yearâs troughs.âMoreover, he said, the recent energy crisis and power rationing measures in key markets have also supported elevated price trajectories for commodities.âAll of this led to a robust recovery in IQâs financial performance for the year 2021 from the previous years, and the Group recorded a net profit of approximately QR 8.1 billion for the current year,â Kaabi said.With macroeconomic sentiments remaining positive during 2021, he said, âWe continued our efforts towards achieving operational excellence by focusing on our people, ensuring plant reliability and our commitment to HSE. We remained successful, during the current year, in realising financial and operational benefits of all the strategic decisions taken last year in order to create and preserve long-term shareholder value.ââOur strategic investment of $1 billion to take full ownership in QAFCO has served us well, with results in excess of our expectations. Similarly, mothballing certain steel facilities during 2020 allowed us to focus on more profitable domestic and selective international markets, and benefited the Group with improved profitability and better plant reliability,â he said.âThe Group continued its maintenance programmes as planned to ensure safe, efficient, and reliable operations with consistent production and carried out various planned shutdowns required at different facilities,â he said.With the current supply chain crunch situation and seized global markets throughout the year, he said, the Groupâs marketing and logistics arm worked closely with relevant producing entities to steer Group entities through these challenging times, while ensuring our volumes remained unaffected without disrupting operations.âGiven the current short and medium-term economic outlook and our CAPEX related outlays, the board proposes the distribution of 100 percent of the nominal value of the share, which is equivalent to QR1 per share, and a pay-out ratio of 75 percent of Groupâs net earnings,â he said.Speaking on the occasion, Manager Privatized Companies Affairs Dept at QatarEnergy Mohammed Jaber Al Sulaiti said, âThe year 2021 has turned out to be one of the most successful years for the Group since inception, after witnessing an unprecedented challenging time during last year being impacted by adversities of COVID-19. Undoubtedly, the economic recovery that from the latter part of 2020, backed by societal reopening and recovery of markets in light of government spending aided greater consumer participation and led to a notable increase in demand for downstream commodities.âOn the other hand, he said, âIndustry supply remained constrained, coupled with supply chain bottlenecks at a global scale affecting most of the seaborne export-oriented industries throughout the year. These factors created a wider supply-demand imbalance across most of the commodities and played a vital role in persistent inflationary price trends.As the Group benefitted from a momentous economic recovery, he said, âWe continued to consolidate our position of being a low-cost operator which contributed to our competitive edge and supported us in achieving one of the strongest results. During the year, we started to realize results from the strategic decisions taken during a pandemic year, which has not only enhanced our competitiveness but also positioned us with stronger footings for any future challenges.âDuring the meeting, shareholders approved the boardâs recommendation for a dividend payment of QR1 per share for 2021, representing 100 percent of the nominal share value.The overall growth in revenue during the current year was mainly driven by higher product prices amid constructive macroeconomic drivers.The Group net profits increased by 321 percent compared to the last year to reach QR 8.1 billion for the year ended 31 December 2021. The overall growth in profitability was mainly linked to improved revenues with better margins.IQâs EBITDA margins remained robust and increased to reach 51 percent during 2021 against 36 percent during last year. This was mainly due to elevated product price trajectories which prevailed throughout the current year, coupled with competitive feedstock pricing.