Qatar: MPHC reports net profit of $302mln for 2023

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Doha, Qatar: Mesaieed Petrochemical Holding Company (“MPHC” or “the Group”; QE ticker: MPHC), yesterday announced a net profit of QR1.1bn for the year ended 31 December 2023, representing a decline of 39% compared to the year ended 31 December 2022.

This decline in profitability was mainly linked to lowered Group revenue, which declined by 21% and reached QR3.1bn.

Commenting on the financial and operational performance for the year ended 31 December 2023, Ahmad Saif Al Sulaiti, Chairman of the Board of Directors, MHPC, said: “In successfully navigating the challenges posed by our business dynamics, we achieved commendable financial results despite market volatility. Our teams worked tirelessly to safeguard operations, emphasizing our business strengths. On the sustainability front, we are actively reducing our environmental footprint, concurrently building our operations with a strong focus on energy efficiency and conservation pillars.

Also this year, QatarEnergy successfully fulfilled its IPO commitment by distributing the second and last tranche of incentive shares to eligible MPHC shareholders. This landmark achievement saw the transfer of 948 million ordinary shares from QatarEnergy ownership to eligible IPO shareholders, in accordance with the mechanisms set forth in the IPO Prospectus of MPHC. My sincere thanks to QatarEnergy’s leadership for their support and guidance in making this possible”

MPHC’s operations continue to remain robust and resilient with total production for the current period reaching 1,137 thousand MTs .Production for year ended 31 December 2023flat in comparison to last year. Production remains flat despite the maintenance turnaround carried out at QVC facilities during 1Q-23.

On a quarter-on-quarter basis production volumes for 4Q-23decreased by 4%in comparison to 3Q-23, mainly due to a decline noted in production volumes from Petrochemicals segment.

The decline in Group revenue is primarily attributed to the decrease observed in average blended product prices, which fell by 19% compared to the same period last year. This decline translated into a QR832m decrease in MPHC’s net earnings for this year comparison to last year. The subdued commodity demand, driven by macroeconomic headwinds and exacerbated by surplus supply, led to a decrease in commodity prices.

Sales volumes also declined marginally by 2% versus the same period last year, mainly driven by lowered sales volumes reported by the chlor-alkali segment, being partially offset by higher volumes reported by the petrochemicals segment on the back of higher operating days compared to last year. Negative movement in sales volumes translated into a decline of QR24m in MPHC’s net earnings for the period ended 31 December 2023 net earnings versus last year.

EBITDA for the current period amounted to QR1,526m with a decline of 26% versus the same period last year, mainly due to lower revenue. EBITDA margins for the year ended 31 December 2023 reached 52% versus 55% achieved during the same period last year.

Compared to 3Q-23, MPHC revenue increased by 8% and net profit declined by 11%. Key contributor towards the upward trend in revenue was mainly the higher selling prices realized during 4Q-23 versus 3Q-23. Incline in selling prices was mainly linked to upward trajectories noted in commodity prices hinting at the gradual recovery phase gaining momentum. Sales volumes also increased by 3% compared to 3Q-23 predominantly linked to higher volumes reported by the chlor-alkali segment.

After reviewing Group’s current year financial performance, with present and potential liquidity position, and considering the current and future macroeconomic conditions, business outlook, CAPEX, investing and financing requirements of the Group, the Board of Directors proposed a total annual dividend distribution of ~ QR1.1bn for the year ended 31 December 2023, subject to the approval of General Assembly, representing a payout ratio of 100% of current year’s net earnings. A dividend of QR0.086 per share represent a dividend yield of ~ 5% on the closing share price as of 31 December 2023.

MPHC will host an IR earnings call with investors to discuss its results, business outlook and other matters on Thursday, 15 February 2024 at 1:30p.m. Doha Time. The IR presentation that accompanies the conference call will be posted on the ‘financial information’ page within the Investor Relations section at MPHC’s website.