Industries Of Qatar Co. · QSE:IQCD
Industries Of Qatar — Industries Qatar — H1 2021 Earnings Presentation
53 slides from Industries Of Qatar's earnings presentation, Jun 30, 2021
Slide 1: Industries Qatar Investor Relations Presentation
CLASSIFICATION: C0 - NON-CONFIDENTIAL Industries Qatar Investor Relations Presentation 30 June 2021 “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 six-month period ended 30 June 2021) 6. Segment results (For the six-month period ended 30 June 2021) 7. CAPEX and Cash flows (2021F
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 • Qatar Petroleum 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. Exchang
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 in three distinct business segments: 24.1% Petrochemical, Fertilizer and Steel; 34.0% Petrochemicals • Production facilities are princi
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 #28 among “2021 Forbes List of Top 100 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 97.1 Peer 1 79.5 IQ 22.0 IQ ranks #2 IQ 9.8 IQ ranks #2 Peer 2 14.9 Peer 2 9.0 Peer 3 10.9 Peer 3 6.5 Peer 4 7.5 Peer 4 5.3 Note: Data as of 30-Jun-21 Not
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 • Economic momentum carried forward from the tail end of last 1650 year on the back of ongoing vaccination campaign and easing LDPE ($/MT) of lockdowns in major markets, allowed sequential recovery and LLDPE ($/MT) led to a s
Slide 13: Group results
CLASSIFICATION: C0 - NON-CONFIDENTIAL Group results (For the six-month period ended 30 June 2021) 13 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 13
Slide 14: 1H-21 results at a Glance
CLASSIFICATION: C0 - NON-CONFIDENTIAL 1H-21 results at a Glance Growth vs. 1H-20 Revenue 69% EBITDA 188% Net profit 391% QR 9.2 billion QR 4.5 billion QR 3.5 billion EBITDA Margin: 48.6% EPS: QR 0.58 RoAE: 14.2% Group reported the highest quarterly profit since 2013, on the back of constructive ma
Slide 15: Operational performance review
CLASSIFICATION: C0 - NON-CONFIDENTIAL Operational performance review Production (MT’ 000) Production (MT’000) • 1H-21 production volumes declined as compared to 1H-20, mainly due mothballing of certain steel facilities which started since mid of 2020, periodic maintenance shutdowns at certain Qafco
Slide 16: Financial performance review
CLASSIFICATION: C0 - NON-CONFIDENTIAL Financial performance review Revenue Revenue (QR’ billion) (QR Billion) • 1H-21 Group revenue increased significantly versus 1H-20, mainly on the back of overall increase in blended selling prices and enhanced sales volumes. • Q2-21 Group revenue increased in co
Slide 17: Net profit variance analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Net profit variance analysis Net profit of QR 3.5 billion, up by 391% on 1H-20, mainly driven by higher product prices and sales volumes. This was partially offset by the negative movements due to absence of QP processing fees. OPEX was higher mainly driven by i
Slide 18: IQ cash flow generation
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ cash flow generation IQ’s free cash flow generation capability remained robust Amounts in QR ‘millions IAS 31 IAS 31 Free cash flows generated during six-month period ended 30 June 2021: QR 3.4 billion Free cash flows generated during three-month period ended
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 100 60% 90 51% Oil price (USD/bbl), brent 50% IQ EBIDTA Margins (%) 80 46% 40% 41% 70 40% 39% 37% 40% 60 30% 28% 27% 50 30% 40 22% 30 20% 20 10%
Slide 20: IQ's plant operating rates
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ’s plant operating rates 114.1% IQ’s plant operating rates remained stable 114.0% 107.6% 106.6% 106.4% 106.3% 105.1% 103.9% 103.7% 102.9% 102.3% 101.0% 100.9% 99.7% 99.5% 99.4% 99.1% 99.1% 98.1% 93.9% 93.3% 92.2% 91.8% 91.3% 88.5% 86.8% 86.5% 82.7% 80.2% 80.0%
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 4% Qatar North America Middle East 12% Asia, ex. ISC 14% 9% 35% South America Africa Indian sub-contine
Slide 22: Segment results
CLASSIFICATION: C0 - NON-CONFIDENTIAL Segment results (For the six-month period ended 30 June 2021) 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: 1H-21 results: Petrochemicals – production and prices
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & 1H-21 results: Petrochemicals selling prices Production: Production up by 8% compared to 1H-20, as the segment had lesser number of planned and unplanned maintenance shutdowns during 2021 compared to last year; Q2-21 production volum
Slide 25: 1H-21 results: Petrochemicals – revenue and net profit
CLASSIFICATION: C0 - NON-CONFIDENTIAL 1H-21 results: Petrochemicals Analysis of segment revenue & net profit Revenue: QR 3.1 billion, up by 83% compared to the same period last year. This increase in revenue was mainly linked to higher product prices (+69%) and better sales volumes (+8%); Q2-21
Slide 26: 1H-21 results: Petrochemicals – EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL 1H-21 results: Petrochemicals Analysis of segment EBITDA margins Segment’s EBITDA margins continued to remain on a positive trajectory 1200 70% 58% 1000 60% 54% 47% 50% 800 44% 42% 40% 600 1,017 27% 30% 750 400 20% 575 455 200 Q2 315 10% 253 0 0% Q1-20 Q2-20 Q3-
Slide 27: 1H-21 results: Petrochemicals – geographical analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of 1H-21 results: Petrochemicals 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 1H-21 Segment 1H-21 Seg
Slide 28: 1H-21 results: Petrochemicals – key products
CLASSIFICATION: C0 - NON-CONFIDENTIAL 1H-21 results: Petrochemicals Key segment products analysis LDPE LLDPE (contributed ~53% of the segment revenue in 1H-21) (contributed ~18% of the segment revenue in 1H-21) 1,292 1,083 896 900 1,397 1,609 829 821 722 811 961 907 896 940 1,124 823 150 142 160 167
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: 1H-21 results: Fertilizers – production and prices
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & 1H-21 results: Fertilizers selling prices Production: Production declined by 3% compared to 1H-20, as Qafco trains 1-4 underwent a maintenance shutdown with higher no. of days during Q1-21; Q2-21 production increased by 10% compared
Slide 31: 1H-21 results: Fertilizers – revenue and net profit
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of segment 1H-21 results: Fertilizers revenue & net profit Revenue: QR 3.8 billion, up by 99% compared to 1H-20, mainly due to positive growth in product prices (+55%) and sales volumes (+85%); Revenue increased by 38% in Q2-21 compared to the Q1-21
Slide 32: 1H-21 results: Fertilizers – EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL 1H-21 results: Fertilizers Analysis of segment EBITDA margins Segment’s EBITDA margins continued to remain robust 1400 53% 60% 53% 50% 49% 1200 47% 50% 44% 1000 40% 800 30% 1,191 600 20% 847 400 692 496 457 441 Q2 200 10% 0 0% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21
Slide 33: 1H-21 results: Fertilizers – geographical analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of 1H-21 results: Fertilizers segment revenue Americas remains a main market for fertilizer segment Asia is another key market for fertilizers along with Indian sub-continent 1H-21 1H-21 SegmentRevenue Segment Revenue (%) (%) 1H-20Segme
Slide 34: 1H-21 results: Fertilizers – key products
CLASSIFICATION: C0 - NON-CONFIDENTIAL 1H-21 results: Fertilizers Key segment products analysis Urea (contributed ~86% of the segment revenue in 1H-21) 1,408 1,474 1,178 1,281 970 1,043 828 714 267 233 227 249 316 361 221 240 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Sales volumes during 2020 w
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: 1H-21 results: Steel – production and prices
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & 1H-21 results: Steel selling prices Production: Production down by 24% compared to 1H-20, due to management’s decision to mothball certain facilities starting from April’20; Production volumes remained flat in Q2-21 compared to Q1-21
Slide 37: 1H-21 results: Steel – revenue and net profit
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of segment 1H-21 results: Steel revenue & net profit Revenue: QR 2.2 billion, up by 23% on 1H-20 amid increase in selling prices (+27%), offset by decline in sales volumes (-23%) owing to the mothballing of certain steel facilities starting from Q2-20
Slide 38: 1H-21 results: Steel – EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL 1H-21 results: Steel Analysis of segment EBITDA margins Steel segment’s EBITDA margins continue to incline following the mothballing decision 350 28% 30% 24% 300 25% 250 20% 200 16% 13% 15% 300 280 150 10% 100 5% 104 50 71 Q2 -1% -2% 0% 0 -16 -12 -50 -5% Q1-20 Q
Slide 39: 1H-21 results: Steel – geographical analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of 1H-21 results: Steel segment revenue Starting from the second quarter of 2020, the Group decided to temporarily resize capacity of domestic operations within the Steel segment to 0.8 million MT per annum of rebar with an intent to prim
Slide 40: 1H-21 results: Steel – key products
CLASSIFICATION: C0 - NON-CONFIDENTIAL 1H-21 results: Steel Key segment products analysis Rebars (contributed ~71% of the segment revenue in 1H-21) 704 453 547 555 621 523 497 530 460 629 551 228 235 244 342 307 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Selling price improved starting from Q2-2
Slide 41: CAPEX & Cash flows (2021F – 2025F)
CLASSIFICATION: C0 - NON-CONFIDENTIAL CAPEX & Cash flows (2021F – 2025F) 41 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 41
Slide 42: CAPEX and Cash Flows (2021F – 2025F)
CLASSIFICATION: C0 - NON-CONFIDENTIAL CAPEX and Cash Flows (2021F – 2025F) o CAPEX / PUD spend of QR 5.2 billion across CAPITAL EXPENDITURE (in QR Billion) 2021 2022 2023 2024 2025 all segments doe 2021-2025 ▪ No capacity Capital Spares 0.1 0.1 0.0 0.0 0.0 related CAPEX and mostly related to reliabi
Slide 43: Dividend and market statistics
CLASSIFICATION: C0 - NON-CONFIDENTIAL Dividend and market statistics 43 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 43
Slide 44: Dividend Record & Market Statistics
CLASSIFICATION: C0 - NON-CONFIDENTIAL Dividend Record & Market Statistics Payout Ratio (%) Dividend per share 83% 100% 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 0.33 0.20 2003 2004 2005 2006 2007 20
Slide 45: Historical performance (2014 - 2020)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Historical performance (2014 - 2020) 45 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 45
Slide 46: Results at a Glance (2014 - 2020)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Results at a Glance (2014 - 2020) Production (M MT’s) Sales Volumes (M MT’s) Production steadily grew from 16.9 million MT’s in 2014 and peaked to reach 17.4 million MT’s in 2015. The decline in production in 2020 was mainly owed to mothballing decision of certa
Slide 47: Results at a Glance (2014 - 2020)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Results at a Glance (2014 - 2020) 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
Slide 48: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL Governance Structure 48 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 48
Slide 49: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL 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 Shareholde
Slide 50: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL 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
Slide 51: Sales and Marketing
CLASSIFICATION: C0 - NON-CONFIDENTIAL Sales and Marketing 51 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 51
Slide 52: 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 53: 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@qp.com.qa or iq@qp.com.qa Address: PO Box 3212, Doha, State of Qatar Please refer to www.iq.com.qa for the latest i