Industries Of Qatar Co. · QSE:IQCD
Industries Of Qatar — Industries Qatar — Q1 2020 Earnings Presentation
47 slides from Industries Of Qatar's earnings presentation, Mar 31, 2020
Slide 1: Industries Qatar Investor Relations Presentation
Industries Qatar Investor Relations Presentation 31 March 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 period ended 31 March 2020) 7. Dividends and market statistics 8. Segmental details 9. CAPEX and Cash flows (2020 – 2024) 10. Business upda
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) • 21.12% 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 rated diversified Strong Low cost fina
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 March 2020)
Results at a glance (For the period ended 31 March 2020) 11 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 11
Slide 12: Key Highlights
Key Highlights Production (MT’000) Production of 4.0 million MT’s, marginally up on Mar-19. Production not affected by COVID-19. The decline production as compared to Q4- 19 was attributed to lower operating days, due to maintenance shutdowns (specially in steel segment and fuel additives facilities
Slide 13: Key Highlights
Key Highlights Revenue (QR Billion) Decline in Group revenue driven by lower prices, lower sales volumes and changes to sales & operating arrangement of Qafco trains 1-4 (where revenue relating to Qafco trains 1-4 has not been recognized in IQ books, instead a gas processing fees has been recognized
Slide 14: Net Profit Variance Analysis
Net Profit Variance Analysis Net profit of QR 204 million, significantly down on Mar-19 ● driven by lower prices, adverse inventory movements, sales volumes, sales of expensive inventories from previous periods (reported within Other OPEX), partially offset by gas processing fees recognized, and dir
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 three month period ended 31 March 2020: QR 922 million 15 Industries Qatar, IR Presentation, Q1-20 15
Slide 16: Geographic analysis – IQ Group revenue
Geographic analysis – IQ Group revenue Asia remained the Group’s largest market, while its presence in Americas continued to be substantial Europe 4% Qatar North America Middle East 16% Asia 9% 20% 31% South America Africa Indian sub-continent 6% 4% 11% 16 Industries Qatar, IR Presentation, Q1-20
Slide 17: Dividend and market statistics
Dividend and market statistics 17 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 17
Slide 18: Dividend Record & Market Statistics (2003-2019)
Dividend Record & Market Statistics (2003-2019) 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 201
Slide 19: Segmental Details
Segmental Details 19 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 19
Slide 20: 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 21: Segmental Details (Petrochemical): Production & Selling Prices
Analysis of production & Segmental Details (Petrochemical) selling prices Production: Production up by 4% on Q1-19, as the segment had higher number of planned and unplanned maintenance shutdowns during 2019; Production remained flat during the Q1-20 compared to the Q4-19. Selling Prices: Down
Slide 22: Segmental Details (Petrochemical): Revenue & Net Profit
Segmental Details (Petrochemical) Analysis of segment revenue & net profit Revenue: QR 1.0 billion, down by 15% on Q1-19. Decrease due to lower prices and sales volumes across products; Revenue decreased by 9% as compared to 4th Quarter of 2019, due to declining sales volumes and selling prices
Slide 23: Segmental Details (Petrochemical): Segment Revenue Geography
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 Q1-20 Segment Revenue (%) Q1-19 Segment Revenue (%) 7% 1%
Slide 24: Segmental Details (Petrochemical): Key Products Analysis
Segmental Details (Petrochemical) Key segment products analysis LDPE LLDPE 1,007 1,040 961 907 896 979 990 896 829 821 151 138 150 142 152 60 71 68 47 43 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Sales volumes remained positive compared to the last Sales volumes declined as compare
Slide 25: 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 2,880 Urea 4,468 Melamine 26 Total 7,397 • The segment’s primary feedstock is methane gas (which is used for the product
Slide 26: Segmental Details (Fertilizer): Production & Selling Prices
Analysis of production & Segmental Details (Fertilizer) selling prices Production: Production increased by 6% compared to Q1-19, as first half of 2019 was affected by periodic maintenance shutdowns; Production remained flat in the Q1-20 compared to Q4-19, as there were minimal periodic planned m
Slide 27: Segmental Details (Fertilizer): Revenue & Net Profit
Analysis of segment Segmental Details (Fertilizer) revenue & net profit Revenue: QR 780 million, down by 29% compared to Q1-19, mainly affected by decline in selling prices and change in the revenue recognition methodology due to the new sales & operating arrangement for Qafco trains 1-4; Revenu
Slide 28: Segmental Details (Fertilizer): Segment Revenue Geography
Geographical analysis of Segmental Details (Fertilizer) segment revenue Asia remains a main market for fertilizer segment Indian sub-continent is another key market for fertilizers along with North and South America Q1-20 Segment Revenue (%) Q1-19 Segment Revenue (%) 15% 21% 17% 28% 21% 23% 33%
Slide 29: Segmental Details (Fertilizer): Key Products Analysis
Segmental Details (Fertilizer) Key segment products analysis Urea 1058 1178 983 970 621 266 251 267 233 227 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Sales volumes declined due to the new recognition methodology under the new sales & operating arrangement for Qacfo trains 1-4. Selling prices declined significan
Slide 30: 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) Capacity DRI / HBI 2,300 Rebar 1,800 Billets 2,520 Coil 240 Total 6,860 • The segment’s primary raw material is oxide pellets and
Slide 31: Segmental Details (Steel): Production & Selling Prices
Analysis of production & Segmental Details (Steel) selling prices Production: Production down by 6% compared to Q1-19, affected by periodic planned maintenance shutdowns; Production decreased in Q1-20 by 17% compared to Q4-19, due to maintenance shutdowns. Selling Prices: Down on Q1-19 by 3%,
Slide 32: Segmental Details (Steel): Revenue & Net Profit
Analysis of segment Segmental Details (Steel) revenue & net profit Revenue: QR 1.3 billion, up by 3% on Q1-19. Increase primarily due to increased sales volumes (+6%) recorded during Q1-20; Revenue declined by 6% in Q1-20 compared to the Q4-19, due to reduced sales volumes (-13%) recorded during
Slide 33: Segmental Details (Steel): Segment Revenue Geography
Geographical analysis of Segmental Details (Steel) segment revenue Asia remains a key market for steel products Qatar remains a another key market for IQ’s steel products Q1-20 Segment Revenue (%) Q1-19 Segment Revenue (%) 20% 30% 31% 29% 39% 51% Asia Middle East Africa Qatar Indian-subcontinent
Slide 34: Segmental Details (Steel): Key Products Analysis
Segmental Details (Steel) Key segment products analysis Rebars 508 517 523 497 453 550 492 460 629 551 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Sales volumes remained stable compared to Q1-19 and declined compared to Q4-19 due to lesser production amid maintenance shutdowns. Selling price remained low compared
Slide 35: CAPEX & Cash flows (2020 – 2024)
CAPEX & Cash flows (2020 – 2024) 35 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 35
Slide 36: 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 / reliability related CAPEX of QR
Slide 37: Business Updates – going forward
Business Updates – going forward 37 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 37
Slide 38: Business updates – going forward
Business updates – going forward Key strategies and core objectives Output optimization: Petrochemical and Fertilizer segments are poised to ensure the optimum levels of plant utilization; Steel segment will resize the utilization levels, from Q2-20, to 0.8 million MT of rebar inline with the
Slide 39: COVID-19 – impact analysis
COVID-19 – impact analysis 39 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 39
Slide 40: 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 No impact performance established at each operating entity continued at all facilities to ensur
Slide 41: 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 growth/ a. Petrochemical segment most affected Negative impact performance industrial activity causing with revenue and net profit declined decline in prod
Slide 42: Governance Structure
Governance Structure 42 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 42
Slide 43: 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 44: 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 45: Sales and Marketing
Sales and Marketing 45 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 45
Slide 46: 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 47: 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