Industries Of Qatar Co. · QSE:IQCD
Industries Of Qatar — Industries Qatar — Q3 2020 Earnings Presentation
51 slides from Industries Of Qatar's earnings presentation, Sep 30, 2020
Slide 1: Industries Qatar Investor Relations Presentation
Industries Qatar Investor Relations Presentation 30 September 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 (2013 – 2019) 6. Results at a Glance (For the period ended 30 September 2020) 7. Dividends and market statistics 8. Segmental details 9. CAPEX and Cash flows (2020 – 2024) 10. Optim
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; • The issued share capital consists of 6.05 billion • Qatar
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) • 21.13% 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 (2013-2019)
Results at a glance (2013-2019) 8 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 8
Slide 9: Results at a Glance (2013-2019)
Results at a Glance (2013-2019) Production (M MT’s) Sales Volumes (M MT’s) Production grew from 16.3 million MT’s in 2013 and peaked to reach 17.4 million MT’s in 2015, thereafter continued to remain relatively stable ▪ The sales volume grew over the period and reached its highest in 2018 ▪ Selling
Slide 10: Results at a Glance (2013-2019)
Results at a Glance (2013-2019) 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 Total Assets (QR Bn) Net
Slide 11: Results at a glance (For the period ended September 2020)
Results at a glance (For the period ended 30 September 2020) 11 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 11
Slide 12: Key Highlights
Key Highlights Production (MT’000) • 9M-20 production volumes declined as compared to the same period last year, mainly due to periodic planned maintenance, unplanned shutdowns and moth-balling of certain steel facilities. This was partially offset by increase in volumes related to Qafco’s 25% acqui
Slide 13: Key Highlights
Key Highlights Revenue (QR Billion) • 9M-20 Group revenue down significantly on last year mainly driven by lower prices (PE, FA and fertilizers), lower sales volumes, temporary gas sales & operating arrangement in relation to Qafco trains 1-4. This was partially offset by the new GSPA relating to Qa
Slide 14: Net Profit Variance Analysis
Net Profit Variance Analysis Net profit (normalized) of QR 1.1 billion, significantly down on 9M-19 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 f
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 Free cash flows generated during nine months period ended 30 September 2020: QR 2.1 billion Acquisition of 25% stake in Qafco, with effect from 0
Slide 16: Robust EBITDA margins
Robust EBITDA margins Despite the adverse trends in commodity prices, IQ’s EBITDA margins remained robust 100 45% 40% 40% 40% 90 39% 40% 37% 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-18Q3-18 Oct-18Q4-18 Jan-19Q1-18 Ap
Slide 17: IQ's operating rates remained stable
IQ’s operating rates remained 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% 101.00% 98.10% 97.50% 97.3% 96.0% 95.2% 94.0% 93.9% 91.8% 91.80% 89.00% 88.5% 86.8% 86.6% 86.5% 82.9% 82.5% 73.3% 61
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 5% Qatar North America Middle East 15% Asia 11% 8% 34% South America Africa Indian sub-continent 9% 5% 13% 18 Industries Qatar, IR Presentation, Q3-2
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% 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 0.20 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 21: Segmental Details
Segmental Details 21 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 21
Slide 22: Segmental Details: Petrochemical
SegmentalDetails: Segmental Details Petrochemical • 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 m
Slide 23: Segmental Details (Petrochemical): production & selling prices
Analysis of production & Segmental Details (Petrochemical) selling prices Production: Production up by 2% compared to 9M-19, as the segment had lesser number of planned and unplanned maintenance shutdowns during 2020 compared to last year; Q3-20 Production volumes up on Q2-20, mainly as a result
Slide 24: Segmental Details (Petrochemical): revenue & net profit
Segmental Details (Petrochemical) Analysis of segment revenue & net profit Revenue: QR 2.7 billion, down by 18% compared to last year. This decline in revenue was mainly due to lowered product prices across the segment, slightly off-set by better sales volumes which increased by 2% compared to 9M-
Slide 25: Segmental Details (Petrochemical): geographical analysis
Geographical analysis of Segmental Details (Petrochemical) 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 9M-20 Segment Revenue (%) 9M-19 Segment Revenue (%) 6% 1%
Slide 26: Segmental Details (Petrochemical): key products analysis
Segmental Details (Petrochemical) Key segment products analysis LDPE LLDPE (contributed ~54% of the segment revenue in 9M-20) (contributed ~16% of the segment revenue in 9M-20) 1,007 1,040 961 907 896 940 979 990 823 896 829 821 811 722 151 138 150 142 152 159 160 60 71 68 47 43 46 65 Q1-19 Q2-19 Q3
Slide 27: Segmental Details: Fertilizer
Segmental Details: Fertilizer • 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 product
Slide 28: Segmental Details (Fertilizer): production & selling prices
Analysis of production & Segmental Details (Fertilizer) selling prices Production: Production increased by 36% compared to 9M-19, as result of acquisition of 25% stake in Qafco, with effect from 01 Jan 2020; Q3-20 production declined by 6% compared to Q2-20 amid slight maintenance shutdowns. S
Slide 29: Segmental Details (Fertilizer): revenue & net profit
Analysis of segment Segmental Details (Fertilizer) revenue & net profit Revenue: QR 3.0 billion, down by 6% compared to 9M-19, mainly affected by a decline in selling prices and change in the revenue recognition methodology due to the temporary sales & operating arrangement for Qafco trains 1-4 ap
Slide 30: Segmental Details (Fertilizer): geographical analysis
Geographical analysis of Segmental Details (Fertilizer) segment revenue Americas remains a main market for fertilizer segment Asia is another key market for fertilizers along with Indian sub-continent 9M-20 Segment Revenue (%) 9M-19 Segment Revenue (%) 20% 13% 27% 33% 25% 26% 16% 1% 2% 5% 5% 7%
Slide 31: Segmental Details (Fertilizer): key products analysis
Segmental Details (Fertilizer) Key segment products analysis Urea (contributed ~92% of the segment revenue in 9M-20) 1058 1178 1043 983 970 828 714 266 251 267 233 227 240 221 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Sales volumes declined during 2020, due to the recognition methodology under the t
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 & selling prices
Analysis of production & Segmental Details (Steel) selling prices Production: Production down by 50% compared to 9M-19, due to the management’s decision to mothball certain facilities; Production increased in Q3-20 by 26% compared to Q2-20, due to lesser shutdowns in Q3-20. Selling Prices: rem
Slide 34: Segmental Details (Steel): revenue & net profit
Analysis of segment Segmental Details (Steel) revenue & net profit Revenue: QR 2.3 billion, down by 37% on 9M-19 amid decline in sales volumes due to management’s decision to cater only local demand of steel starting from Q2-20; Revenue increased by 10% in Q3-20 compared to Q2-20 due to better p
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 onl
Slide 36: Segmental Details (Steel): key products analysis
Segmental Details (Steel) Key segment products analysis Rebars (contributed ~81% of the segment revenue in 9M-20) 508 517 523 530 547 497 453 550 492 460 629 551 228 235 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Selling price continued the declining trend, although prices improved starting from Q2-2
Slide 37: CAPEX & Cash flows (2020 – 2024)
CAPEX & Cash flows (2020 – 2024) 37 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 37
Slide 38: CAPEX and Cash Flows (2020 - 2024)
CAPEX and Cash Flows (2020 - 2024) CAPITAL EXPENDITURE (in QR Billion) o Cumulative CAPEX / PUD spend of ~QR 4.6 2019 2020 2021 2022 2023 2024 billion across all segments; Capital Spares 0.1 0.1 0.1 0.1 0.0 0.0 o Qapco Catalysts 0.0 0.0 0.0 0.0 0.0 0.0 Turnaround Turnaround / reliability related C
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: COVID-19 – impact analysis
COVID-19 – impact analysis 41 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 41
Slide 42: COVID-19 impact analysis
COVID-19 impact analysis Business Measures taken / key impacts & Results at the Group level Overall impact aspects: observations at the Group level Operational a) Crisis management committees a) Uninterrupted production Limited impact performance established at each operating continued at all facili
Slide 43: COVID-19 impact analysis
COVID-19 impact analysis Business Key impacts / observations Results at the Group level Overall aspects: impact at the Group level Supply a) Several countries enforced a) Due to restrictions in certain regions, No impact till chain and greater restrictions on the limited the access was available to
Slide 44: COVID-19 impact analysis
COVID-19 impact analysis Business Key impacts/ Results at the Group level Overall impact at aspects: observations the Group level Financial a) Slowdown in GDP a) Petrochemicals segment most Negative impact performance growth/ industrial affected with revenue and net profit activity causing declined,
Slide 45: COVID-19 impact analysis
COVID-19 impact analysis Business Key impacts / observations 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. remaine
Slide 46: Governance Structure
Governance Structure 46 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 46
Slide 47: 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 48: 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 49: Sales and Marketing
Sales and Marketing 49 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 49
Slide 50: Sales and Marketing
Sales and Marketing • Qatar Chemical and Petrochemical Marketing and Distribution Company Q.J.S.C. (trading as “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 Fe
Slide 51: For further information, Industries Qatar can be contacted as follows
For further information, Industries Qatar can be contacted as follows: Telephone: (974) 4013 2080 Fax: (974) 4013 9750 Email: 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 releases and presentations about Industr