Industries Qatar sees Q1 profit dip by 9.5%

Industries Qatar (IQ) has posted a 9.5 percent dip in first-quarter net profit on declining petrochemical revenue but beat analysts' expectations thanks to strong fertiliser and steel sales. The Gulf's second-largest chemical producer by market value behind Saudi Basic Industries (SABIC) made a net profit of QR1.9bn ($521.8m), a company statement said, compared with QR2.1bn a year earlier. Analysts polled by Reuters on average expected the company to post quarterly profit of QR1.8bn. The company posted first-quarter revenue of QR4.4bn, compared to QR4bn a year ago, the statement said. Petrochemical revenue fell 8 percent during the quarter compared to the same period last year, the statement said. First-quarter steel revenue was QR1.7bn, a 22.1 percent increase over the same period last year. Steel was the group's largest revenue contributor, accounting for almost 40 percent of total sales. The steel segment saw its second highest quarterly revenue since the company's founding in 2003, the statement said. It said the steel segment was expected to "significantly benefit from the progressive and wide-ranging infrastructure plans of the state of Qatar". Qatar has embarked on a massive domestic building programme in preparation to host the 2022 World Cup soccer tournament, with plans to spend $11bn on a new international airport, $5.5bn on a deepwater seaport and $1bn for a transport corridor in the capital, Doha. In February IQ inaugurated Qafco 5, a 1 million tonne urea facility. Sales from the plant amounted to approximately QR80m, the statement said. The company sold 44,000 metric tons of urea during the quarter, with Qafco 5 operating at 86 percent capacity, the statement said. The plant is expected to ramp up to full capacity in the second quarter. Petrochemical prices have returned to near pre-crisis levels, but worries persist over how a potential double-dip global recession may impact petrochemicals companies' earnings in the world's top oil exporting region. In December IQ said it had sold its stake in a local real estate firm for $44m, as the property sector faced low demand and growing supply. IQ had held a 34-percent stake in Fereej Real Estate Company, which was set up in 2008 in a joint venture with a Gulf International Services unit and Qatar Real Estate Co. (Alaqaria). The latter had 33 percent stakes each. IQ shares closed up 0.85 percent on Thursday before the results were announced.