Mesaieed Petrochemical Holding Company Q.s.c. · QSE:MPHC
Mesaieed Petrochemical Holding Company Q.s.c — Mesaieed Petrochemical Holding Company — Q2 2020 Earnings Presentation
45 slides from Mesaieed Petrochemical Holding Company Q.s.c's earnings presentation, Jun 30, 2020
Slide 1: Mesaieed Petrochemical Holding Company IR Presentation
Mesaieed Petrochemical Holding Company IR Presentation 30 June 2020 “one of the region’s premier diversified petrochemical conglomerates with interests in the production of olefins, polyolefins, alpha olefins and chlor-alkali products.”
Slide 2: Disclaimer
Disclaimer The companies in which Mesaieed Petrochemical Holding Company Q.P.S.C. directly and indirectly owns investments are separate entities. In this presentation, “MPHC” and “the group” are sometimes used for convenience in reference to Mesaieed Petrochemical Holding Company Q.P.S.C. This prese
Slide 3: Table of Content
Table of Content 1. About MPHC 2. Ownership Structure 3. Board of Directors 4. Competitive advantages 5. Results at a Glance (2015 – 2019) 6. Results at a Glance (For period ended 30 June 2020) 7. Dividends and market statistics 8. Segmental details 9. CAPEX (2020 – 2024) 10. Optimization updates 11
Slide 4: About MPHC
About MPHC 4
Slide 5: About MPHC
About MPHC Mesaieed Petrochemical Holding Company Through its group companies, MPHC Q.P.S.C. (“MPHC” or “the group”; QE ticker: operates in 2 business segments - MPHC) was incorporated on May 29, 2013 and Petrochemical (Q-Chem / Q-Chem II) was listed on the Qatar Stock Exchange on and Chlor-Alka
Slide 6: Ownership Structure
Ownership Structure ~65.5% Qatar Petroleum ~34.5% Free Float MPHC Q-Chem Q-Chem II QVC 49% (JV) 49% (JV) 55.2% (JV) Q-Chem Q-Chem II Ras Laffan Distribution Distribution Olefins Company Company Company (100% Q-Chem) (100% Q-Chem II) (53.31%) 6 Mesaieed Petrochemical Holding Company, IR Presentation,
Slide 7: Board of Directors
Board of Directors Mr. Ahmad Saif Al Sulaiti Chairman Mr. Mohamed Salem Alyan Almarri Mr. Abdulrahman Ahmad Al Shaibi Vice Chairman Member Mr. Abdulaziz Mohammed Al Mannai Mr. Abdulaziz Jassim Mohd Al Muftah Member Member Mr. Ali Nasser Telfat Mr. Mohammed Essa Al-Mannai Member Member 7 Mesaieed Pet
Slide 8: Competitive Advantages
Competitive Advantages • Assured feedstock supply. • Solid liquidity position. • Economies of scale. • Cash flow generation even • Synergy benefits. under stressed conditions. • Operationally diversified. • Sound dividend record. • Stable EBITDA margin. Strong Low cost Financial producer Position Ex
Slide 9: Results at glance (2015 to 2019)
Results at glance (2015 to 2019) 9
Slide 10: Results at a glance (2015 to 2019)
Results at a glance (2015 to 2019) Production (MT’000) Utilization (%) Production remained relatively stable since the incorporation of MPHC ▪ Utilization marginally improved in the backdrop of stable production ▪ Selling prices moved inline with the global commodity prices linked to macro-economic
Slide 11: Results at a glance (2015 to 2019)
Results at a glance (2015 to 2019) Revenue (Million QR) Net Profit (Million QR) In line with product prices, both revenue and net profit witnessed movements ▪ Total assets grew marginally, while the cash and cash equivalents increased over the period. Total Assets (Million QR) MPHC Head office Cash
Slide 12: Results at glance (For the period ended June 2020)
Results at glance (For the period ended 30 June 2020) 12
Slide 13: Key Highlights
Key Highlights For period ended 30 June 2020 (MPHC Share) Production (MT’000) • Production down on last year due to the planned maintenance shutdowns. • Production not affected by COVID-19. • Major shutdown include planned shutdowns completed in Q1-20. Sales Volumes (MT’000) • Sales volumes down on
Slide 14: Key Highlights
Key Highlights For period ended 30 June 2020 (MPHC Share) Revenue (QR million) • Group revenue down on last year due to the combined effect of reduced selling prices and sales volumes. • Q2-20 revenue declined by 11% compared to Q1-20 on the back of lowered selling prices. MPHC’s Net Profit (QR mill
Slide 15: Net Profit Variance Analysis
Net Profit Variance Analysis QR ‘millions Performance lowered by QR 170 million due to: Unfavorable variance • Reduced selling prices 24% and sales volumes 17%; • Unfavorable inventory differential due to huge inventory drawdowns on account of turnaround and shutdowns; • Other negative variance aris
Slide 16: MPHC operating rates remained stable
MPHC operating rates remained stable Despite the adverse macroeconomic conditions, operating rates of MPHC segments remained stable 110.6% 109.4% 107.8% 104.0% 100.74% 99.18% 94.09% 93.9% 92.0% 85.57% 85.3% 84.80% 75.5% 73.6% 70.9% 63.91% 62.9% 55.4% Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Petrochemical
Slide 17: Geographic analysis – MPHC Group revenue
Geographic analysis – MPHC Group revenue Asia remained the Group’s largest market, while its presence in Indian sub- continent and Europe continued to be substantial Europe 24% Qatar Middle East 2% Asia 4% 39% Africa Indian sub-continent 5% 26% 17 Mesaieed Petrochemical Holding Company, IR Presentat
Slide 18: Dividends & Market Statistics
Dividends & Market Statistics 18
Slide 19: Dividends & Market Statistics (2013-2019)
Dividends & Market Statistics (2013-2019) Payout Ratio (%) Dividend per share 0.12 85% 0.1 81% 81% 77% 80% 0.08 76% 74% 0.06 72% 0.11 75% 72% 0.04 0.07 0.07 0.07 0.06 0.08 70% 0.02 0.04 0 65% 2013 2014 2015 2016 2017 2018 2019 Market Capitalization (QR billion) 31.6 37.1 24.4 25.4 19.9 15.8 18.9 201
Slide 20: Segment Details
Segment Details 20
Slide 21: Segmental Details: Petrochemical
Segmental Details: Petrochemical Q-Chem and Q-Chem II are both owned 49% by MPHC, 49% by Chevron Phillips Chemical International Qatar Holdings L.L.C., and 2% by QP; Q-Chem II also has an effective ownership of 53.85% in Ras Laffan Olefins Company Limited which owns an ethane cracker which provi
Slide 22: Segmental Details: Petrochemical
Analysis of production & Segmental Details: Petrochemical selling prices Production: Production down by 22% as compared to 1H-19, affected by maintenance shutdowns; Production increased during the Q2-20 by 34% compared to Q1-20, due to lesser planned maintenance shutdowns in Q2-20. Selling Pri
Slide 23: Segmental Details: Petrochemical
Segmental Details: Petrochemical Analysis of segment revenue & net profit Revenue: QR 743 million, down by 38% as compared to 1H-19 due to lowered product prices against a backdrop of challenging macroeconomic conditions and decline in sales volumes due to reduced production volumes amid planned m
Slide 24: Segmental Details: Petrochemical
Geographical analysis of Segmental Details: Petrochemical segment revenue Asia remains a main market for Petrochemical segment Europe and Indian sub-continent remains other key markets 1H-20 Segment Revenue (%) 1H-19 Segment Revenue (%) 1% 4% 2% 3% 3% 6% 9% 40% 45% 31% 27% 12% 17% Asia Africa Am
Slide 25: Segmental Details: Petrochemical
Segmental Details: Petrochemical Key segment products analysis HDPE Sales Volumes (MT ‘000) (contributed ~68% of the segment revenue in 1H-20) Selling price ($/MT) 1,005 1,008 925 817 773 718 114 115 111 112 88 97 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 NAO (contributed ~25% of the segment revenue in 1H
Slide 26: Segmental Details: Chlor-Alkali
Segmental Details: Chlor-Alkali Qatar Vinyl Company Limited Q.S.C. (“QVC”) is owned 55.2% by MPHC, 31.9% by Qapco and 12.9% by QP; QVC’s operations have been integrated with Qapco, bringing additional synergies to the group. The segment is engaged in the production of a range of chlor-alkali p
Slide 27: Segmental Details: Chlor-Alkali
Analysis of production & Segmental Details: Chlor-Alkali selling prices Production: Production down by 16% as compared to 1H-19, affected by planned maintenance shutdowns; Production improved during the Q2-20 by 33% compared to Q1-20, due to lesser planned shutdowns. Selling Prices: Declined a
Slide 28: Segmental Details: Chlor-Alkali
Segmental Details: Chlor-Alkali Analysis of segment revenue & net profit Revenue: QR 232 million, down by 34% as compared to 1H-19 due to lower product prices and sales volumes; Revenue for Q2-20, down by 44% compared to Q1-20 on the back of decline in sales volumes and selling prices. Net pro
Slide 29: Segmental Details: Chlor-Alkali
Geographical analysis of Segmental Details: Chlor-Alkali segment revenue Indian sub-continent and Asia remains a main market for Chlor-Alkali segment 1H-20 Segment Revenue (%) 1H-19 Segment Revenue (%) 2% 2% 3% 1% 4% 2% 16% 22% 3% 72% 73% Asia Africa Americas Indian sub-continent Middle East Europ
Slide 30: Segmental Details: Chlor-Alkali key products analysis
Segmental Details: Petrochemical Key segment products analysis Vinyl Chloride Monomer (VCM) Sales Volumes (MT ‘000) Selling price ($/MT) (contributed ~41% of the segment revenue in 1H-20) 715 672 691 699 715 448 47 33 33 46 39 30 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Caustic Soda (contributed ~38% of
Slide 31: CAPEX (2020 – 2024)
CAPEX (2020 – 2024) 31
Slide 32: CAPEX (2020 - 2024) – MPHC share
CAPEX (2020 - 2024) – MPHC share CAPITAL EXPENDITURE (in QR Million) o Cumulative CAPEX spend of QR 1.2 billion 2020 2021 2022 2023 2024 across all segments during 2020-2024; New Furnance 49.0 93.8 25.2 - - o QChem/QChem II NAO Tanks • CAPEX of QR 996 million planned during upgrade 12.0 6.8 3.6 13.8
Slide 33: Optimization updates
Optimization updates 33 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 33
Slide 34: Optimization updates
Optimization updates • Given the current difficult market and macroeconomic outlook, the Group has further strengthen on its optimization initiatives to withstand the Group against external pressures and decisions were made to optimize cost; • Major areas focused by the Group companies includes: • M
Slide 35: COVID-19 – impact analysis
COVID-19 – impact analysis 35
Slide 36: COVID-19 impact analysis
COVID-19 impact analysis Business Measures taken / key impacts Results at the Group level Overall impact at aspects: the Group level Operational a) Crisis management committees a) Uninterrupted production Limited impact performance established at each operating continued at all facilities entity to
Slide 37: COVID-19 impact analysis
COVID-19 impact analysis Business Measures taken / key Results at the Group level Overall impact at aspects: impacts the Group level Supply chain a) Several countries a) Due to restrictions in certain No impact till date; and enforced greater regions, limited the access was but remained distribution
Slide 38: COVID-19 impact analysis
COVID-19 impact analysis Business Key impacts Results at the Group level Overall impact at aspects: the Group level Financial a) Slowdown in GDP a) Revenue and net profit declined. Negative impact performance growth/ industrial b) Product prices across all the activity causing segments were impacted
Slide 39: COVID-19 impact analysis
COVID-19 impact analysis Business Key impacts Results at the Group level Overall impact at aspects: the Group level Liquidity a) Decline in interest rates. a) Strong liquidity profile with No impact; but profile & credit b) Liquidity remained robust. robust financial position. remained cautious risk
Slide 40: Governance Structure
Governance Structure 40
Slide 41: Governance
Governance Board Structure Board Committees MPHC Board of Directors consists of seven (7) The Board of Directors established Board Committees Directors, all of whom were appointed by the Special and Special Committees to carry out specific tasks. The Shareholder, which is Qatar Petroleum. QP app
Slide 42: Governance
Governance Remuneration • Board of Directors Shareholders rights The Company has developed a periodically The Company’s Articles of Associations provide for the rights revisited remuneration policy for Board of shareholders, particularly the rights to receive dividends, members. The policy has f
Slide 43: Sales and Marketing
Sales and Marketing 43 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 43
Slide 44: 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 regulated product
Slide 45: For further information, Mesaieed Petrochemical Holding Company can be contacted
For further information, Mesaieed Petrochemical Holding Company can be contacted as follows: Telephone: (974) 4013 2080 Fax: (974) 4013 9750 Email: mphc@qp.com.qa Address: PO Box 3212, Doha, State of Qatar Please refer to www.mphc.com.qa for the latest information, publications, press releases and p
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