Industries Of Qatar Co. · QSE:IQCD
Industries Of Qatar — Industries Qatar — FY2020 Earnings Presentation
46 slides from Industries Of Qatar's earnings presentation, Dec 31, 2020
Slide 1: Industries Qatar Investor Relations Presentation
Industries Qatar Investor Relations Presentation 31 December 2020 “One of the region’s industrial giants with interests in the production of a wide range of petrochemical, fertilizer and steel products.” Publication Date: March […], 2015
Slide 2: Disclaimer
DISCLAIMER The Companies in which Industries Qatar Q.P.S.C. directly and indirectly owns investments are separate entities. In this presentation, “IQ” and “the Group” are sometimes used for convenience in reference to Industries Qatar Q.P.S.C. This presentation may contain forward-looking statements
Slide 3: Table of Content
Table of Content 1. About IQ 2. Group Structure 3. Board of Directors 4. Competitive advantages 5. Results at a Glance (2014 – 2020) 6. Results at a Glance (For the year ended 31 December 2020) 7. Dividends and market statistics 8. Segmental details 9. CAPEX and Cash flows (2021 – 2025) 10. Optimiza
Slide 4: About IQ
About IQ • Industries Qatar Q.P.S.C. (“IQ” or “the group”; QE • IQ is credit rated by Standard & Poor’s ticker: IQCD) was incorporated on April 19, 2003 (A+; stable) and Moody’s (A1; stable); and listed on the Qatar Stock Exchange in 2003; • IQ is the second largest company at Qatar • Qatar Petroleu
Slide 5: Group Structure
Group Structure • Through its group companies, IQ operates in 3 business segments - Petrochemical, Fertilizer and Steel; • Production facilities are principally located in the State of Qatar. Key shareholders of IQ: • 51.0% Qatar Petroleum (Parent) • 21.17% General Retirement and Social Insurance Au
Slide 6: Board of Directors
Board of Directors • The Board of Directors of the Group consists of: H.E. Mr. Saad Sherida Al-Kaabi Chairman and Managing Director Mr. Abdulaziz Mohammed Al-Mannai Mr. Abdulla Ahmad Al-Hussaini Vice Chairman Member Mr. Abdulrahman Mohammed Al- Dr. Mohammed Yousef Al-Mulla Suwaidi Member Member Mr.
Slide 7: Competitive Advantages
Competitive Advantages • Assured • Solid liquidity position feedstock supply • No debt • Strong cash flow • Economies of generation even under scale difficult conditions • Synergy benefits • Sound dividend record • Stable EBITDA margin • Operationally • A+ / A1 rating affirmed diversified Strong Low
Slide 8: Results at a glance (2014 - 2020)
Results at a glance (2014 - 2020) 8 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 8
Slide 9: Results at a Glance (2014 - 2020)
Results at a Glance (2014 - 2020) Production (M MT’s) Sales Volumes (M MT’s) Production steadily grew from 16.9 million MT’s in 2014 and peaked to reach 17.4 million MT’s in 2015. The decline in production in 2020 was mainly owed to mothballing decision of certain steel facilities and Qafco’s tempor
Slide 10: Results at a Glance (2014 - 2020)
Results at a Glance (2014 - 2020) Revenue (QR Bn) Net income (QR Bn) * Revenue trends moved in line with the selling prices ▪ Movements in revenue together with operating costs affected the net income growth ▪ Cash across the Group continued to grow and reached its peak in 2018. Decline in net cash
Slide 11: Results at a glance (For the year ended 31 December 2020)
Results at a glance (For the year ended 31 December 2020) 11 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 11
Slide 12: Key Highlights
Key Highlights • 2020 production volumes declined as compared to last year, mainly due to periodic Production (MT’000) planned maintenance, unplanned shutdowns and moth-balling of certain steel facilities. This was partially offset by increase in volumes related to Qafco’s 25% acquisition, effective
Slide 13: Key Highlights
Key Highlights Revenue (QR Billion) • 2020 Group revenue down on last year mainly driven by lower prices (petrochemicals and fertilizers), lowered sales volumes, temporary gas processing arrangement in relation to Qafco trains 1-4. This was partially offset by acquisition of 25% stake in Qafco with
Slide 14: Net Profit Variance Analysis
Net Profit Variance Analysis Net profit (normalized) of QR 2.1 billion, down on 2019 mainly driven by lower prices, sales volumes, sales of expensive inventories from previous periods (reported within OPEX). This was partially offset by recognition of Qafco’s gas processing fees for first seven mont
Slide 15: IQ Cash flow generation capability
IQ Cash flow generation capability Despite the challenging macroeconomic headwinds, IQ’s free cash flow generation capability remained robust QR ‘millions IAS 31 IAS 31 Free cash flows generated during the financial year ended 31 December 2020: QR 2.8 billion 25% stake in Qafco, acquired with effect
Slide 16: Robust EBITDA margins
Robust EBITDA margins Despite the adverse trends in commodity prices, IQ’s EBITDA margins remained robust 100 41% 45% 40% 40% 39% 40% 90 37% 40% Oil price (USD/bbl), brent IQ EBIDTA Margins (%) 80 35% 70 30% 28% 27% 30% 60 22% 25% 50 20% 40 30 15% 20 10% 10 5% 0 0% Jul-18 Oct-18 Q3-18 Jan-19 Q4-18 A
Slide 17: IQ's operating rates continue to remain stable
IQ’s operating rates continue to remain stable Despite the adverse macroeconomic conditions, the operating rates remained stable 114.1% 114.0% 110.7% 107.6% 106.6% 106.4% 106.3% 103.90% 103.70% 102.9% 101.00% 99.7% 99.40% 98.10% 97.50% 96.6% 93.9% 93.9% 92.2% 91.80% 91.3% 90.7% 89.00% 88.5% 86.8% 86
Slide 18: Geographic analysis – IQ Group revenue
Geographic analysis – IQ Group revenue Asia remained the Group’s largest market, while its presence in Americas and continued to be substantial Europe 4% Qatar North America Middle East 14% Asia 12% 15% 29% South America Africa Indian sub-continent 8% 5% 13% 18 Industries Qatar, IR Presentation, YE
Slide 19: Dividend and market statistics
Dividend and market statistics 19 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 19
Slide 20: Dividend Record & Market Statistics
Dividend Record & Market Statistics Payout Ratio (%) Dividend per share 83% 100% 91% 94% 89% 60% 55% 82% 52% 72% 69% 67% 68% 70% 55% 54% 54% 1.10 40% 0.80 0.85 0.75 0.70 0.55 0.60 0.50 0.50 0.50 0.50 0.35 0.35 0.40 0.40 0.40 0.33 0.20 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 21: Segmental Details
Segmental Details 21 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 21
Slide 22: Segmental Details: Petrochemicals
SegmentalDetails: Segmental Details Petrochemicals • The companies in the Petrochemical segment (Qapco, Qatofin, Qafac and QVC) are engaged in the production of: Product (in 000 MT PA) Capacity1 Ethylene 920 LDPE 600 LLDPE 280 Methanol 500 MTBE 305 Total 2,605 • The segment’s primary feedstocks are
Slide 23: Segmental Details: Petrochemicals production and prices
Analysis of production & Segmental Details: Petrochemicals selling prices Production: Production up by 4% compared to 2019, as the segment had lesser number of planned and unplanned maintenance shutdowns during 2020 compared to last year; Q4-20 production volumes slightly down on Q3-20, mainly a
Slide 24: Segmental Details: Petrochemicals revenue and net profit
Segmental Details: Petrochemicals Analysis of segment revenue & net profit Revenue: QR 4.0 billion, down by 9% compared to last year. This decline in revenue was mainly due to lowered product prices which was slightly off-set by better sales volumes which increased by 3% compared to 2019; Q4-20
Slide 25: Segmental Details: Petrochemicals geographical analysis
Geographical analysis of Segmental Details: Petrochemicals segment revenue Asia remains a main market for IQ for Polyethylene (LDPE and LLDPE) and MTBE Indian sub-continent remains a key market for Polyethylene (LDPE & LLDPE) and Methanol 2020 Segment Revenue (%) 2019 Segment Revenue (%) 4% 1% 7
Slide 26: Segmental Details: Petrochemicals key products analysis
Segmental Details: Petrochemicals Key segment products analysis LDPE LLDPE (contributed ~54% of the segment revenue in 2020) (contributed ~16% of the segment revenue in 2020) 979 990 896 900 1,007 1,040 1,124 829 821 722 811 961 907 896 823 940 151 138 150 142 152 159 160 167 60 71 68 47 43 46 65 66
Slide 27: Segmental Details: Fertilizers
Segmental Details: Fertilizers • Qatar Fertiliser Company has six ammonia and six urea production trains all of which are located in Qatar. Product (in 000 MT PA) Capacity1 Ammonia 3,840 Urea 5,957 Melamine 60 Total 9,922 • The segment’s primary feedstock is methane gas (which is used for the produc
Slide 28: Segmental Details: Fertilizers production and prices
Analysis of production & Segmental Details: Fertilizers selling prices Production: Production increased by 34% compared to 2019, as result of additional volumes being added, amid acquisition of 25% stake in Qafco with effect from 01 Jan 2020; Q4-20 production increased by 8% compared to Q3-20 du
Slide 29: Segmental Details: Fertilizers revenue and net profit
Analysis of segment Segmental Details: Fertilizers revenue & net profit Revenue: QR 4.4 billion, up by 3% compared to 2019, mainly due to accounting for revenues from Qafco at 100% with effect from 01- Jan-20, due to acquisition of the additional 25% minority stake in Qafco. This was slightly offs
Slide 30: Segmental Details: Fertilizers geographical analysis
Geographical analysis of Segmental Details: Fertilizers segment revenue Americas remains a main market for fertilizer segment Asia is another key market for fertilizers along with Indian sub-continent 2020 Segment Revenue (%) 2019 Segment Revenue (%) 19% 17% 24% 28% 24% 29% 18% 23% 2% 5% 4% 1% 6
Slide 31: Segmental Details: Fertilizers key products analysis
Segmental Details: Fertilizers Key segment products analysis Urea (contributed ~90% of the segment revenue in 2020) 1,408 1,058 1,178 1,043 983 970 828 714 266 251 267 233 227 221 240 249 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Sales volumes during 2020 were affected due to the recognition m
Slide 32: Segmental Details: Steel
Segmental Details: Steel • Qatar Steel Company Q.S.C. produces a number of intermediate steel products. The production capacity of the plants are: Product (in 000 MT PA) Capacity1 DRI / HBI 2,300* Rebar 1,800* Billets 2,520 * Coil 240 Total 6,860 1 Production capacity reflect IQ’s share in the respe
Slide 33: Segmental Details: Steel production and prices
Analysis of production & Segmental Details: Steel selling prices Production: Production down by 54% compared to 2019, due to the management’s decision to mothball certain facilities; Production decreased in Q4-20 by 8% compared to Q3-20, due to maintenance shutdown during Q4-20. Selling Prices
Slide 34: Segmental Details: Steel revenue and net profit
Analysis of segment Segmental Details: Steel revenue & net profit Revenue: QR 3.0 billion, down by 41% on 2019 amid decline in sales volumes due to management’s decision to cater only local demand of steel starting from Q2-20; Revenue increased by 23% in Q4-20 compared to Q3-20 due to better pri
Slide 35: Segmental Details: Steel geographical analysis
Geographical analysis of Segmental Details: Steel segment revenue Starting from the second quarter of 2020, the Group has decided to temporarily resize the capacity of domestic operations within the Steel segment to 0.8 million MT per annum of rebar with an intent to cater local sector demand pred
Slide 36: Segmental Details: Steel key products analysis
Segmental Details: Steel Key segment products analysis Rebars (contributed ~79% of the segment revenue in 2020) 508 517 523 530 547 555 497 453 550 492 460 629 551 228 235 244 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Selling price improved starting from Q2-20 as the management decided to conc
Slide 37: CAPEX & Cash flows (2021 – 2025)
CAPEX & Cash flows (2021 – 2025) 37 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 37
Slide 38: CAPEX and Cash Flows (2021 - 2025)
CAPEX and Cash Flows (2021 - 2025) o CAPEX / PUD spend of QR 5.2 billion across CAPITAL EXPENDITURE (in QR Billion) 2021 2022 2023 2024 2025 all segments doe 2021-2025 ▪ No capacity Capital Spares 0.1 0.1 0.0 0.0 0.0 related CAPEX and mostly related to reliability Catalysts 0.0 0.0 0.0 0.0 0.0 and H
Slide 39: Optimization updates
Optimization updates 39 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 39
Slide 40: Optimization updates
Optimization updates • Given the current difficult market and macroeconomic outlook, the Group has further added an additional layer of optimization measures to withstand the Group against external pressures. • Major areas focused by the Group companies to further optimize the overall cost structure
Slide 41: Governance Structure
Governance Structure 41 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 41
Slide 42: Governance Structure
Governance Structure Board Structure Governance and Compliance • IQ Board of Directors consists of seven (7) • IQ is firmly committed to implementing the Directors, all of whom were appointed by the principles of good governance set out in the Special Shareholder, which is Qatar Petroleum. QP Govern
Slide 43: Governance Structure
Governance Structure Remuneration Disclosure and Transparency Board of Directors • The Board ensures that all disclosures are made in • The Company has developed a periodically revisited accordance with the requirements set by regulatory remuneration policy for Board members. The policy has authorit
Slide 44: Sales and Marketing
Sales and Marketing 44 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 44
Slide 45: Sales and Marketing
Sales and Marketing • Qatar Chemical and Petrochemical Marketing and Distribution Company Q.J.S.C. (“Muntajat”), a wholly-owned company of the government of the State of Qatar, has the exclusive rights to purchase, market, sell and distribute the State’s production of Petrochemical and Fertilizer re
Slide 46: For further information, Industries Qatar can be contacted
For further information, Industries Qatar can be contacted as follows: Telephone: (974) 4013 2080 Fax: (974) 4013 9750 Email: iq.investorrelations@qp.com.qa or iq@qp.com.qa Address: PO Box 3212, Doha, State of Qatar Please refer to www.iq.com.qa for the latest information, publications, press releas