MPHC net profit jumps 250% to QR 1.9 billion in 2021

Doha: Mesaieed Petrochemical Holding Company (MPHC or the Group), yesterday announced a net profit of QR 1.9 billion for the financial year ended December 31, 2021, an increase of 250% compared to last year.

Commenting on the financial and operational performance for 2021, Ahmad Saif Al Sulaiti, Chairman of the Board of MHPC, said: “The main highlight of this year has been a sequential macroeconomic recovery which has led us to report one of the strongest sets of financial results. results. Despite the headwinds in the global supply chain, our marketing and logistics team has been strongly mobilized to guide us and insulate our business from any operational disruption.”

“While macro sentiment remained positive, we continued our journey to capitalize on our robust business strategies and build our reputation for delivering strong results in achieving operational excellence. Going forward, we will continue to focus on productivity and realizing efficiencies, while selectively investing in capital projects that would increase our competitiveness and create shareholder value,” he added.

Group revenue improved 62% to QR 4 billion from QR 2.4 billion in FY20. Earnings per share (EPS) was QR 0.148 for the year. year ended December 31, 2021, compared to QR 0.042 for the previous year. year.

During the year, the accelerated recovery in global GDP on the back of positive macroeconomic factors led to increased demand for downstream commodities. Industry supply remained tight due to weather disasters in the United States, rising energy prices in Europe and dual policy measures in China. Global supply chain challenges remained evident throughout the year. All of these factors led to broader supply and demand imbalances among commodities and drove commodity prices higher for the year.

MPHC’s operations continue to remain robust and resilient, with total production for the period reaching 1,135,000 MT, up 9% from 2020. The overall increase in production volumes was mainly attributed to improved plant operating rate in 2021, despite a scheduled preventative maintenance shutdown that was performed at the chlor-alkali facilities during Q4-21. Quarter-on-quarter, the 20% decline in production volumes was primarily attributed to planned plant maintenance in the chlor-alkali segment.

MPHC has demonstrated superior operational agility in meeting production targets, while ensuring that HSE standards remain dynamic. Q-Chem and Q-Chem II improved safety processes while recording a 14th consecutive year without a single recordable heat stress incident. In the chlorine-akali segment of MPHC, the QVC company achieved a difficult maintenance shutdown with excellent safety results.

During the year, the average prices of mixed products increased by 52% compared to 2020, resulting in an increase of QR 1.3 billion in the net profit of MPHC, compared to l ‘last year.

Renewed product demand, complemented by supply constraints, has led to improved commodity prices. Sales volumes were up 7% year-on-year, driven by improved plant operating rates and healthy product demand. The overall sales volume growth resulted in a QR 191 million increase in MPHC’s net profit.

The positive product price trajectory and volume improvement were slightly offset by an increase in variable costs, which contributed negatively QR 282 million to MPHC’s net profit for the current year compared to last year. ‘last year. Net profit for the current year was positively impacted by a favorable variance amounting to QR 43 million, related to inventory differentials, due to lower inventory draws during the year compared to last year. ‘last year.

Compared to Q3-21, MPHC revenue was down 12%, while net profit fell 20%. The main contribution to the decline in sales and net profit is mainly due to lower sales volumes which decreased by 20%, in the context of a planned large-scale maintenance shutdown at the chlorine facilities -alkali carried out during Q4-21, which affected the Group’s production and sales volumes. . However, selling prices increased by 10% in Q4-21 compared to Q3-21 mainly due to higher energy prices and firm demand. Liquidity remained robust with cash and bank balances at QR 3.9 billion as of December 31, 2021. Total assets as of December 31, 2021 stood at QR 17.4 billion and total equity at QR 17. .1 billion QR.

The petrochemical segment recorded a net profit of QR 1.4 billion for 2021, up 201% compared to 2020. This notable increase in profitability is mainly due to improved product prices due to improving macro environment and supply shortages. Sales volumes were also up 11% year-on-year, amid higher plant operating days in the current year compared to 2020. product pricing coupled with improved sales volumes resulted in overall revenue growth of 60% within the segment. , to reach 2.9 billion QR for the current year. Production volumes increased by 14% compared to 2020, as the segment had planned a periodic overhaul of Q-Chem II facilities during Q1-20, which affected overall operating rates for the year last.

Q4-21 segment profitability fell slightly by 0.1%. However, segment revenue improved 2%, primarily due to higher selling prices which rose 2%, amid inflated energy prices supporting downstream commodities, coupled with a demand for healthy products. However, sales volumes remained stable compared to last quarter.

The chlor-alkali segment recorded a net profit of QR 476 million for 2021, a significant increase of 281% compared to last year. This notable growth was mainly driven by a significant improvement in average mixed selling prices, which increased by 71% compared to 2020, supplemented by renewed demand for finished products (PVC, alumina/aluminum, polymers) thanks to engines constructive macroeconomics and supply shortages. . The sales volume decreased slightly by 1% compared to the previous year. On an overall basis, revenue grew 70% within the segment and slightly exceeded QR 1.0 billion for the current year. Production volumes increased slightly by 2% compared to 2020, despite a planned periodic shutdown carried out during Q4-21.

On a quarterly basis, profitability decreased by 65%, mainly due to lower sales volumes which decreased by 50%. Selling prices for Q4-21 remained higher and an 8% increase was seen compared to Q3-21, amid continued positive macroeconomic factors coupled with higher energy prices.

After reviewing the current year’s financial performance, with the current and potential liquidity position, and considering current and future macroeconomic conditions, business outlook, CAPEX, Group investment and financing needs, the Board of Directors has proposed a total annual dividend distribution of QR 1.38 billion. for the year ended December 31, 2021, representing a payout ratio of 74% of current year net income. A dividend of QR 0.11 per share representing a dividend yield of 5.3% on the closing price of the share as of December 31, 2021. MPHC will host an IR earnings call with investors tomorrow at 1:30 p.m. Doha.

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