Industries Qatar (IQCD) Q2 2024 earnings summary

Executive summary

• Interim dividend of QAR 1.9 billion (QAR 0.31/share), representing 80% payout of net profit for H1 2024, was distributed for the first time, reflecting a strong commitment to shareholders while maintaining liquidity for CapEx and obligations.

• Incorporated in 2003, the group is a leading regional producer in petrochemicals, fertilizers, and steel, with strong market positioning and robust financials.

• Ranked #23 in Forbes' 2023 Top 100 Middle East companies, with a diversified revenue base and global market reach.

• Maintains a solid liquidity position, no long-term debt, and a history of strong dividend payouts.

• QAFAC became a subsidiary effective 10 June 2024, contributing QR 119 million in revenue and QR 31 million in profit post-acquisition.

Financial highlights

• Consolidated net profit for H1 2024 reached QAR 2.33 billion, up 12% year-over-year; EPS at QAR 0.39 vs QAR 0.35 in H1 2023.

• Group revenue for H1 2024 was QAR 8.3 billion, down 7% year-over-year due to lower selling prices and sales volumes.

• EBITDA was QAR 3.4 billion (31% margin), up from QAR 3.1 billion (35% margin) in H1 2023.

• Cash balance at QAR 12.4 billion as of June 30, 2024; no long-term debt; total assets QAR 41.5 billion, equity QAR 38.4 billion.

• Operating costs decreased by 11% year-over-year, driven by lower variable costs and favorable inventory movement.

Outlook and guidance

• CAPEX of QR 10.8 billion planned for 2024-2028, with major investments in fertilizer (QAFCO 7) and PVC projects.

• Blue Ammonia project (startup Q1 2026) and new PVC plant (completion mid-2025) to drive future growth.

• Fertilizer segment volumes expected to remain stable, with a planned Q4 shutdown; urea prices projected to fluctuate between $300-$340/ton barring exceptional events.

• Dividend policy for the second half will be reviewed based on market conditions and performance; historical payout ratios serve as a guide.

• No impact from global minimum tax as of reporting date; monitoring ongoing regulatory developments.