Mesaieed Petrochemical Holding Company Q.s.c. · QSE:MPHC

Mesaieed Petrochemical Holding Company Q.s.c — Mesaieed Petrochemical Holding Company — H1 2021 Earnings Presentation

44 slides from Mesaieed Petrochemical Holding Company Q.s.c's earnings presentation, Jun 30, 2021

  1. Slide 1: Mesaieed Petrochemical Holding Company IR Presentation

    CLASSIFICATION: C1 - CONTROLLED Mesaieed Petrochemical Holding Company IR Presentation 30 June 2021 “one of the region’s premier diversified petrochemical conglomerates with interests in the production of olefins, polyolefins, alpha olefins and chlor-alkali products.”

  2. Slide 2: Disclaimer

    CLASSIFICATION: C1 - CONTROLLED 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 Hol

  3. Slide 3: Table of Content

    CLASSIFICATION: C1 - CONTROLLED Table of Content 1. About MPHC 2. Competitive strengths 3. Regional peers review 4. Macroeconomic updates 5. MPHC results (For the six-month period ended 30 June 2021) 6. Segment results (For the six-month period ended 30 June 2021) 7. CAPEX (2021f – 2025f) 8. Dividen

  4. Slide 4: About MPHC

    CLASSIFICATION: C1 - CONTROLLED About MPHC 4

  5. Slide 5: MPHC at a glance

    CLASSIFICATION: C1 - CONTROLLED MPHC at a glance Overview • Mesaieed Petrochemical Holding Company • Qatar Petroleum provides most head office Q.P.S.C. (“MPHC” or “the Group”; QE ticker: functions through a comprehensive service- MPHC) was incorporated on May 29, 2013 and level agreement. was listed

  6. Slide 6: MPHC business segments at a glance

    CLASSIFICATION: C1 - CONTROLLED MPHC business segments at a glance Business segments overview Segments size by Revenue • Through its joint ventures companies, MPHC operates in two distinct business segments: 28.4% Petrochemical Petrochemical and Chlor-Alkali; Chlor-Alkali • Production facilities are

  7. Slide 7: Competitive strengths

    CLASSIFICATION: C1 - CONTROLLED Competitive strengths 7

  8. Slide 8: Competitive strengths

    CLASSIFICATION: C1 - CONTROLLED Competitive strengths • Assured feedstock supply Low cost • Economies of scale and operationally diversified producer • Synergy benefits Strong • Solid liquidity position financial • Strong cash flow generation with stable EBITDA margins position • Sound dividend reco

  9. Slide 9: Regional peers review

    CLASSIFICATION: C1 - CONTROLLED Regional peers review MPHC ranked #85 among “2021 Forbes List of Top 100 Companies in the Middle East” 9

  10. Slide 10: Competitive positioning versus regional peers

    CLASSIFICATION: C1 - CONTROLLED Competitive positioning versus regional peers Market Cap. (USD’ billion) Net profit (USD’ million) Peer 1 97.1 Peer 1 1,297 13% Peer 2 22.0 Peer 2 402 35% Peer 3 131 18% Peer 3 14.9 Peer 4 113 28% Net profit Peer 4 10.9 margin (%) Peer 5 112 24% Peer 5 7.5 Peer 6 110

  11. Slide 11: Macroeconomic updates

    CLASSIFICATION: C1 - CONTROLLED Macroeconomic updates 11

  12. Slide 12: Macroeconomic updates

    CLASSIFICATION: C1 - CONTROLLED Macroeconomic updates Petrochemicals 1250 • Economic momentum carried forward from the tail end 1150 of last year on the back of ongoing vaccination HDPE ($/MT) campaign and easing of lockdowns in major markets, 1050 allowed sequential recovery and led to a stronger 9

  13. Slide 13: MPHC results (six-month period ended June 2021)

    CLASSIFICATION: C1 - CONTROLLED MPHC results (For the six-month period ended 30 June 2021) 13

  14. Slide 14: 1H-21 results at a Glance

    CLASSIFICATION: C1 - CONTROLLED 1H-21 results at a Glance Growth vs. 1H-20 Revenue 97% EBITDA 122% Net profit 573% QR 1.92 billion QR 1.11 billion QR 909 million EBITDA Margin: 57.7% EPS: QR 0.072 RoAE: 8.2% • Ongoing sequential product price recovery, underpinned by improved macroeconomic environme

  15. Slide 15: Operational performance review

    CLASSIFICATION: C1 - CONTROLLED Operational performance review Production (MT’ 000) • 1H-21 production levels significantly up on 1H-20 due to lesser no. of days in relation to maintenance shutdowns during 1H-21 compared to same period last year. Major shutdowns were mainly conducted in Q1-20. • Pro

  16. Slide 16: Financial performance review

    CLASSIFICATION: C1 - CONTROLLED Financial performance review Revenue (QR’ million) • 1H-21 Group revenue up on 1H-20 driven by higher prices and sales volumes. • Q2-21 revenue up on Q1-21 by 15%, on account of improved product prices. There was a slight offset due to decline in sales volumes. Net pr

  17. Slide 17: Net Profit Variance Analysis

    CLASSIFICATION: C1 - CONTROLLED Net Profit Variance Analysis QR ‘millions Net profits increased by QR 774 million due to: Favorable variance • Higher selling prices 57%; • Higher sales volumes 26%; • Favorable inventory differential due to lesser drawdowns. Unfavorable variance • Higher variable cos

  18. Slide 18: MPHC operating rates

    CLASSIFICATION: C1 - CONTROLLED MPHC operating rates Operating rates of MPHC segments remained stable 120% 115% 112% 111% 109% 109% 105% 104% 104% 102% 102% 97% 96% 93% 90% 90% 87% 85% 85% 84% 81% 75% 75% 70% 64% 63% 57% Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Petrochemicals Chlor-Alka

  19. Slide 19: Geographic analysis – MPHC Group revenue

    CLASSIFICATION: C1 - CONTROLLED Geographic analysis – MPHC Group revenue Asia remained MPHC’s largest market, while its presence in Europe continued to be substantial Europe 24% Qatar Middle East 4% Asia, ex. ISC 3% 29% Africa Indian sub-continent 7% 33% 19 Mesaieed Petrochemical Holding Company, IR

  20. Slide 20: Robust EBITDA margins

    CLASSIFICATION: C1 - CONTROLLED Robust EBITDA margins Despite the volatile trends in commodity prices, MPHC’s EBITDA margins continue to remain robust 80 70% 64% 70 61% 65% Oil price (USD/bbl), brent MPHC EBITDA Margins (%) 58% 60% 60 54% 55% 50 47% 50% 40 46% 45% 30 40% 20 35% 10 30% Jan-20 Q1-20 A

  21. Slide 21: Segment results (six-month period ended June 21)

    CLASSIFICATION: C1 - CONTROLLED Segment results (For the six-month period ended 30 June 2021) 21

  22. Slide 22: Segmental Details: Petrochemicals

    CLASSIFICATION: C1 - CONTROLLED Segmental Details: Petrochemicals  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 o

  23. Slide 23: Segmental Details: Petrochemicals – production & selling prices

    CLASSIFICATION: C1 - CONTROLLED Analysis of production & Segmental Details: Petrochemicals selling prices  Production: Production up by 33% compared to 1H-20, as the segment had planned periodic turnaround of Q-Chem II facilities during Q1-20, which affected the overall operating rates for 1H-20 in

  24. Slide 24: Segmental Details: Petrochemicals – revenue & net profit

    CLASSIFICATION: C1 - CONTROLLED Segmental Details: Petrochemicals Analysis of segment revenue & net profit  Revenue: QR 1.38 billion, up by 85% as compared to 1H-20 due to higher product prices (+51%) and enhanced sales volumes (+23%);  Q2-21 revenue up by 23% compared to Q1-21 on the back of impr

  25. Slide 25: Segmental Details: Petrochemicals – geographical analysis

    CLASSIFICATION: C1 - CONTROLLED Geographical analysis of Segmental Details: Petrochemicals segment revenue  Asia remains a main market for Petrochemical segment  Europe and Indian sub-continent remain other key markets 1H-21 Segment Revenue (%) 1H-20 Segment Revenue (%) 5% 4% 2% 2% 6% 9% 39% 45% 3

  26. Slide 26: Segmental Details: Petrochemical key segment products

    CLASSIFICATION: C1 - CONTROLLED Segmental Details: Petrochemical Key segment products analysis HDPE (contributed ~64% of the segment revenue in 1H-21) 1,301 1,008 1,070 925 817 832 906 773 718 115 111 112 88 97 109 133 110 109 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 NAO (contributed ~2

  27. Slide 27: Segmental Details: Chlor-Alkali

    CLASSIFICATION: C1 - CONTROLLED 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 product

  28. Slide 28: Segmental Details: Chlor-Alkali – production & selling prices

    CLASSIFICATION: C1 - CONTROLLED Analysis of production & Segmental Details: Chlor-Alkali selling prices  Production: Production increased by 32% as compared to 1H-20, as 1H-20 was mainly affected by a major planned shutdown (specifically during Q1-20);  Production increased during the Q2-21 by 14%

  29. Slide 29: Segmental Details: Chlor-Alkali – revenue & net profit

    CLASSIFICATION: C1 - CONTROLLED Segmental Details: Chlor-Alkali Analysis of segment revenue & net profit  Revenue: QR 547 million, up by 136% as compared to 1H-20 due to higher product prices (+82%) and sales volumes (+30%);  Revenue for Q2-21, slightly down by 2% compared to Q1-21 mainly on the b

  30. Slide 30: Segmental Details: Chlor-Alkali – geographical analysis

    CLASSIFICATION: C1 - CONTROLLED Geographical analysis of Segmental Details: Chlor-Alkali segment revenue  Indian sub-continent and Asia remain a main market for Chlor-Alkali segment 1H-21 Segment Revenue (%) 1H-20 Segment Revenue (%) 2% 1% 7% 5% 2% 4% 2% 2% 1% 22% 80% 72% Asia, excl. ISC Africa Ind

  31. Slide 31: Segmental Details: Chlor-Alkali key segment products

    CLASSIFICATION: C1 - CONTROLLED Segmental Details: Chlor-Alkali Key segment products analysis Vinyl Chloride Monomer (VCM) (contributed ~43% of the segment revenue in 1H-21) 1,108 1,122 891 672 691 699 715 601 448 33 33 46 39 30 47 56 53 46 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Caust

  32. Slide 32: CAPEX (2021f – 2025f)

    CLASSIFICATION: C1 - CONTROLLED CAPEX (2021f – 2025f) 32

  33. Slide 33: CAPEX (2021f – 2025f) – MPHC share

    CLASSIFICATION: C1 - CONTROLLED CAPEX (2021f – 2025f) – MPHC share CAPITAL EXPENDITURE (in QR Million) o Cumulative CAPEX spend of QR 1.1 billion across all segments during 2021-2025; 2021 2022 2023 2024 2025 New o QChem/QChem II Furnance 59.9 41.0 26.8 - - • CAPEX of QR 879 million planned during N

  34. Slide 34: Dividends & Market Statistics

    CLASSIFICATION: C1 - CONTROLLED Dividends & Market Statistics 34

  35. Slide 35: Dividends & Market Statistics

    CLASSIFICATION: C1 - CONTROLLED Dividends & Market Statistics Payout Ratio (%) Dividend per share 0.12 77% 94% 100% 81% 76% 81% 72% 74% 0.1 72% 80% 0.08 60% 0.06 0.11 40% 0.04 0.07 0.07 0.07 0.06 0.08 20% 0.02 0.04 0.04 0 0% 2013 2014 2015 2016 2017 2018 2019 2020 Market Capitalization (QR billion)

  36. Slide 36: Historical performance (2015 – 2020)

    CLASSIFICATION: C1 - CONTROLLED Historical performance (2015 – 2020) 36

  37. Slide 37: Historical performance (2015 – 2020)

    CLASSIFICATION: C1 - CONTROLLED Historical performance (2015 – 2020) Production (MT’000) Utilization (%) Production and sales volumes remained relatively stable since the incorporation of MPHC ▪ Utilization moved in line with the production levels ▪ Selling prices reflected cyclical movements inline

  38. Slide 38: Historical performance (2015 – 2020)

    CLASSIFICATION: C1 - CONTROLLED Historical performance (2015 – 2020) 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 (M

  39. Slide 39: Governance Structure

    CLASSIFICATION: C1 - CONTROLLED Governance Structure 39

  40. Slide 40: Governance

    CLASSIFICATION: C1 - CONTROLLED 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,

  41. Slide 41: Governance

    CLASSIFICATION: C1 - CONTROLLED 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 divi

  42. Slide 42: Sales and Marketing

    CLASSIFICATION: C1 - CONTROLLED Sales and Marketing 42 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 42

  43. Slide 43: Sales and Marketing

    CLASSIFICATION: C1 - CONTROLLED Sales and Marketing • Qatar Chemical and Petrochemical Marketing and Distribution Company (“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 petroche

  44. Slide 44: For further information, MPHC can be contacted

    CLASSIFICATION: C1 - CONTROLLED For further information, Mesaieed Petrochemical Holding Company can be contacted as follows: Telephone: (+974) 4013 2080 Fax: (+974) 4013 9750 Email: mphc.investorrelations@qp.com.qa or mphc@qp.com.qa Address: PO Box 3212, Doha, State of Qatar Please refer to www.mphc

Mesaieed Petrochemical Holding Company — H1 2021 Earnings Presentation on 6ix