Industries Of Qatar Co. · QSE:IQCD
Industries Of Qatar — Industries Qatar — FY2022 Earnings Presentation
55 slides from Industries Of Qatar's earnings presentation, December 2022
Slide 1: Industries Qatar Investor Relations Presentation
CLASSIFICATION: C0 - NON-CONFIDENTIAL Industries Qatar Investor Relations Presentation 31 December 2022 “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
CLASSIFICATION: C0 - NON-CONFIDENTIAL 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
Slide 3: Table of Content
CLASSIFICATION: C0 - NON-CONFIDENTIAL Table of Content 1. About IQ 2. Competitive strengths 3. Regional peer review 4. Macroeconomic updates 5. Group results (For the year ended 31 December 2022) 6. Segment results (For the year ended 31 December 2022) 7. CAPEX (2023F – 2027F) 8. Dividends and marke
Slide 4: About IQ
CLASSIFICATION: C0 - NON-CONFIDENTIAL About IQ 4 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 4
Slide 5: IQ at a Glance
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ at a Glance Overview • Industries Qatar (IQ) was incorporated and • QatarEnergy provides most head office listed on the Qatar Exchange in 2003. functions through a comprehensive service- • IQ is the second largest company at Qatar level agreement. Exchange by
Slide 6: IQ business segments at a glance
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ business segments at a glance Business segments overview Segment size by Revenue • Through its group companies, IQ operates 16.5% in three distinct business segments: 27.1% Petrochemicals Petrochemical, Fertilizer and Steel; Fertilizers • Production facilitie
Slide 7: Competitive strengths
CLASSIFICATION: C0 - NON-CONFIDENTIAL Competitive strengths 7 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 7
Slide 8: Competitive strengths
CLASSIFICATION: C0 - NON-CONFIDENTIAL Competitive strengths • Assured feedstock supply Low-cost • Economies of scale and operationally diversified producer • Synergy benefits Strong • Solid liquidity position, with no long-term debt financial • Strong cash flow generation with stable EBITDA margins
Slide 9: Regional peer review
CLASSIFICATION: C0 - NON-CONFIDENTIAL Regional peer review IQ ranked #24 among “2022 Forbes List of Top 100 Listed Companies in the Middle East” 9 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 9
Slide 10: Competitive positioning versus regional peers
CLASSIFICATION: C0 - NON-CONFIDENTIAL Competitive positioning versus regional peers Market Cap. (USD’ billion) Total Assets (USD’ billion) Peer 1 71.3 Peer 1 84.7 IQ 21.3 IQ ranks #2 IQ 11.8 IQ ranks #2 Peer 2 20.7 Peer 2 10.3 Peer 3 16.2 Peer 3 8.1 Peer 4 9.6 Peer 4 6.8 Note: Data as of 31-Dec-22 N
Slide 11: Macroeconomic updates
CLASSIFICATION: C0 - NON-CONFIDENTIAL Macroeconomic updates 11 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 11
Slide 12: Macroeconomic updates
CLASSIFICATION: C0 - NON-CONFIDENTIAL Macroeconomic updates Petrochemicals LDPE ($/MT) 1650 LLDPE ($/MT) • Prices for petrochemicals declined on a quarter-on-quarter basis, on account of persistently cautious consumer demand 1150 linking to macro-headwinds, coupled with comparatively lower crude pri
Slide 13: Group results
CLASSIFICATION: C0 - NON-CONFIDENTIAL Group results (For the year ended 31 December 2022) 13 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 13
Slide 14: YE-22 results at a Glance
CLASSIFICATION: C0 - NON-CONFIDENTIAL YE-22 results at a Glance Growth vs. YE-21 Revenue 28% EBITDA 7% Net profit 9% QR 25.8 billion QR 11.0 billion QR 8.8 billion EBITDA Margin: 43% EPS: QR 1.46 RoAE: 21.5% ▪ IQ sets another record with highest net earnings since incorporation in 2003, despite an u
Slide 15: Operational performance review
CLASSIFICATION: C0 - NON-CONFIDENTIAL Operational performance review Production (MT’ 000) Production (MT’000) • YE-22 vs YE-21: production volumes increased, mainly driven by higher volumes from (a) fuel additives facilities (commercial shutdown during 1Q-21); (b) higher steel volumes due to restart
Slide 16: Financial performance review
CLASSIFICATION: C0 - NON-CONFIDENTIAL Financial performance review Revenue Revenue(QR’ million) (QR Billion) • YE-22 vs YE-21: Group revenue increased significantly, mainly on account of overall increase in blended selling prices and higher sales volumes. • 4Q-22 vs 3Q-22: Group revenue declined due
Slide 17: Net profit variance analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Net profit variance analysis YE-22 vs YE-21 IQ continue to benefit from higher product prices coupled with better sales volumes reflected in Group’s bottom-line profitability Amounts in QR ‘millions 4Q-22 vs 3Q-22 Profitability improved on account of lower OPEX
Slide 18: IQ cash flow generation
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ cash flow generation IQ’s free cash flow generation capability continue to remain robust Amounts in QR ‘millions IAS 31 IAS 31 Free cash flows generated during the year ended 31 December 2022: QR 8.8 billion Free cash flows generated during 4Q-22: QR 1.9 bill
Slide 19: Robust EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL Robust EBITDA margins Despite the volatile trends in commodity prices, IQ’s EBITDA margins continue to remain robust 140 60% 52% 53% 51% 120 Oil price (USD/bbl), brent 50% IQ EBIDTA Margins (%) 45% 46% 46% 100 40% 41% 41% 39% 37% 40% 80 30% 60 22% 20% 40 20 10%
Slide 20: IQ's plant operating rates
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ’s plant operating rates IQ’s plant operating rates remained stable 114.8% 113.5% 113.0% 110.8% 109.6% 109.1% 109.1% 105.7% 105.1% 103.2% 102.9% 102.6% 102.3% 101.0% 100.9% 100.9% 100.3% 99.5% 99.4% 99.1% 99.1% 99.0% 98.9% 97.6% 97.1% 96.8% 96.4% 95.8% 93.3% 9
Slide 21: Geographic analysis – IQ Group revenue
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographic analysis – IQ Group revenue Asia remained Group’s largest market, while its presence in Americas and Middle East continued to be substantial Europe 7% Qatar North America Middle East 9% Asia, ex. ISC 11% 16% 35% South America Africa Indian sub-contine
Slide 22: Segment results
CLASSIFICATION: C0 - NON-CONFIDENTIAL Segment results (For the year ended 31 December 2022) 22 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 22
Slide 23: Segmental Details: Petrochemicals
CLASSIFICATION: C0 - NON-CONFIDENTIAL 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 •
Slide 24: Results: Petrochemicals – production & selling prices
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & Results: Petrochemicals selling prices ▪ Production: Production volumes up by 15% compared to YE-21, mainly due to a largescale turnaround carried out at PE facilities during 4Q-21 which affected last year’s production volumes. Also, bet
Slide 25: Results: Petrochemicals – revenue & net profit
CLASSIFICATION: C0 - NON-CONFIDENTIAL Results: Petrochemicals Analysis of segment revenue & net profit ▪ Revenue: QR 7.0 billion, up by 17% compared to YE-21. This increase in revenue was mainly linked to better sales volumes (+14%) along with higher product prices (+2%). Growth in sales volumes was
Slide 26: Results: Petrochemicals – EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL Results: Petrochemicals Analysis of segment EBITDA margins Segment’s EBITDA margins continue to remain strong 1200 70% 58% 1000 49% 60% 54% 53% 47% 45% 50% 44% 45% 800 42% 41% 36% 40% 600 1,017 27% 983 30% 830 828 750 741 400 20% 575 529 460 455 200 Q2 315 10% 2
Slide 27: Results: Petrochemicals – geographical analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of Results: Petrochemicals segment revenue ▪ Asia remains a main market for IQ for Polyethylene (LDPE and LLDPE) and MTBE YE-22 Segment Revenue (%) YE-21 Segment Revenue (%) 9% 1% 4% 6% 8% 14% 37% 39% 9% 8% 15% 13% 18% 19% Asia, ex. ISC Afr
Slide 28: Results: Petrochemicals – key products analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Results: Petrochemicals Key segment products analysis LDPE LLDPE (contributed ~44% of the segment revenue in YE-22) (contributed ~17% of the segment revenue in YE-22) 1,292 1,180 1,262 1,222 1,328 1,083 1,069 949 900 1,397 1,609 1,480 1,551 1,547 1,626 1,261 1,1
Slide 29: Segmental Details: Fertilizers
CLASSIFICATION: C0 - NON-CONFIDENTIAL 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 met
Slide 30: Results: Fertilizers – production & selling prices
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & Results: Fertilizers selling prices ▪ Production: YE-22 production volumes slightly improved by 1% versus last year; ▪ 4Q-22 production improved by 2% compared to 3Q-22, mainly on account of comparatively better plant utilization rates a
Slide 31: Results: Fertilizers – revenue & net profit
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of segment Results: Fertilizers revenue & net profit ▪ Revenue: QR 14.5 billion, up by 41% compared to YE-21, mainly due to positive growth in product prices (+34%) along with higher sales volumes (+5%); ▪ Revenue improved by 8% during 4Q-22 compared to
Slide 32: Results: Fertilizers – EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL Results: Fertilizers Analysis of segment EBITDA margins Segment’s EBITDA margins continue to remain robust 3000 80% 68% 70% 2500 53% 53% 57% 60% 50% 50% 2000 49% 47% 46% 50% 44% 43% 1500 35% 40% 2,546 2,004 30% 1,821 1000 1,538 1,456 1,191 20% 1,119 847 500 Q2 6
Slide 33: Results: Fertilizers – geographical analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of Results: Fertilizers segment revenue ▪ Asia is a key market for fertilizers along with Americas and Indian sub-continent YE-22 Segment Revenue (%) YE-21 Segment Revenue (%) 5% 16% 23% 19% 40% 11% 29% 20% 2% 6% 17% 3% 2% 7% Asia, ex. ISC
Slide 34: Results: Fertilizers – key products analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Results: Fertilizers Key segment products analysis Urea (contributed ~86% of the segment revenue in YE-22) 1,408 1,474 1,407 1,501 1,359 1,405 1,433 1,281 1,171 1,043 714 773 661 702 579 446 531 249 316 361 221 240 2Q-20 3Q-20 4Q-20 1Q-21 2Q-21 3Q-21 4Q-21 1Q-22
Slide 35: Segmental Details: Steel
CLASSIFICATION: C0 - NON-CONFIDENTIAL 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 ca
Slide 36: Results: Steel – production & selling prices
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & Results: Steel selling prices ▪ Production: Production increased by 31% compared to YE-21, as the segment restarted larger DR-2 facility during 1Q-22, as against smaller DR-1 which was operational until the end of 2021; ▪ Production volu
Slide 37: Results: Steel – revenue & net profit
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of segment Results: Steel revenue & net profit ▪ Revenue: QR 4.3 billion, up by 10% on YE-21 amid increase in sales volumes (+14%), partially offset by slightly lower selling prices (-4%); ▪ Revenue decreased by 29% during 4Q-22 compared to 3Q-22, due t
Slide 38: Results: Steel – EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL Results: Steel Analysis of segment EBITDA margins EBITDA margins recovered following segment’s mothballing decision 450 40% 35% 400 35% 350 28% 30% 24% 24% 25% 300 22% 25% 250 19% 20% 409 200 16% 13% 13% 15% 313 300 280 150 10% 201 173 100 163 128 104 50 5% 71 Q
Slide 39: Results: Steel – geographical analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of Results: Steel segment revenue ▪ Starting from 2Q-20, the Group decided to temporarily resize capacity of domestic operations within the Steel segment to 0.8 million MT per annum of rebar (applicable to Qatar Operations) with an intent t
Slide 40: Results: Steel – key products analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Results: Steel Key segment products analysis Rebars (contributed ~69% of the segment revenue in YE-22) 704 781 719 724 823 734 547 555 621 623 530 228 235 244 342 307 220 250 356 247 279 237 2Q-20 3Q-20 4Q-20 1Q-21 2Q-21 3Q-21 4Q-21 1Q-22 2Q-22 3Q-22 4Q-22 Selli
Slide 41: CAPEX (2023F – 2027F)
CLASSIFICATION: C0 - NON-CONFIDENTIAL CAPEX (2023F – 2027F) 41 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 41
Slide 42: CAPEX (2023F – 2027F)
CLASSIFICATION: C0 - NON-CONFIDENTIAL CAPEX (2023F – 2027F) o CAPEX / PUD spend of QR 11.0 billion ▪ major capacity CAPITAL EXPENDITURE BY TYPE addition in fertilizer segment (QR 4.4 bn in Qafco 7), QR Mn 2023 2024 2025 2026 2027 Total PVC in QAPCO (via QVC) ▪ other CAPEX include Turnaround 0.56 0.2
Slide 43: Blue Ammonia Project
CLASSIFICATION: C0 - NON-CONFIDENTIAL Blue Ammonia is produced when the CO2 Blue Ammonia Project generated during conventional Ammonia production is captured and stored Key Highlights Strategic Partnership with QERS1 Building World’s largest Blue Ammonia facility Product Solar Power certification fr
Slide 44: New PVC Project & QVC restructuring
CLASSIFICATION: C0 - NON-CONFIDENTIAL New PVC Project & QVC restructuring Key Highlights of New PVC project First PVC plant in the State of Qatar Nameplate EPC awarded Source feedstock IQ will fund Project fully Construction capacity of valued at (i.e., Vinyl 44.8% of the USD 239 million/ integrated
Slide 45: Dividends and market capitalization
CLASSIFICATION: C0 - NON-CONFIDENTIAL Dividends and market capitalization 45 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 45
Slide 46: Dividends & Market Capitalization
CLASSIFICATION: C0 - NON-CONFIDENTIAL Dividends & Market Capitalization Payout Ratio (%) Dividend per share 83% 75% 100% 75% 91% 94% 89% 60% 55% 82% 52% 72% 69% 67% 68% 70% 55% 54% 54% 1.10 1.10 40% 1.00 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 2
Slide 47: Historical performance (2016 - 2022)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Historical performance (2016 - 2022) 47 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 47
Slide 48: Historical performance (2016 - 2022)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Historical performance (2016 - 2022) Production (M MT’s) Sales Volumes (M MT’s) ▪ Production volumes and utilization rates remained steady since 2016 ▪ Movement sales volumes remained inline with the overall movement in production volumes ▪ Selling prices were i
Slide 49: Historical performance (2016 - 2022)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Historical performance (2016 - 2022) Revenue (QR Bn) Net income (QR Bn) * * Normalized profits ▪ Revenue trends moved in line with the selling prices ▪ Movements in revenue together with operating costs affected the net income growth ▪ Cash flow generation for t
Slide 50: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL Governance Structure 50 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 50
Slide 51: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL Governance Structure Board Structure Governance and Compliance • IQ Board of Directors consists of eight (8) • IQ is firmly committed to implementing the Directors, of whom seven (7) were appointed by principles of good governance set out in the the Special Shar
Slide 52: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL Governance Structure Remuneration Board of Directors Disclosure and Transparency • The Company has developed a periodically revisited • The Board ensures that all disclosures are made in remuneration policy for Board members. The policy accordance with the requi
Slide 53: Sales and Marketing
CLASSIFICATION: C0 - NON-CONFIDENTIAL Sales and Marketing 53 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 53
Slide 54: Sales and Marketing
CLASSIFICATION: C0 - NON-CONFIDENTIAL 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 product
Slide 55: For further information, Industries Qatar can be contacted
CLASSIFICATION: C0 - NON-CONFIDENTIAL For further information, Industries Qatar can be contacted as follows: Telephone: (974) 4013 2080 Fax: (974) 4013 9750 Email: iq.investorrelations@qatarenergy.qa or iq@qatarenergy.qa Address: PO Box 3212, Doha, State of Qatar Please refer to www.iq.com.qa for th