Mesaieed Petrochemical Holding Company (MPHC) on Monday announced a net profit of QR1.9 billion for 2021, representing an increase of 250 percent compared to last year.
Group’s revenue improved by 62 percent to reach QR4 billion as compared to QR2.4 billion for the financial year 2020. Earnings per share (EPS) amounted to QR0.148 for 2021, compared to QR0.042 for last year.
During the year, average blended product prices increased by 52 percent compared to 2020, translating into an increase of QR1.3 billion in MPHC’s net earnings, as compared to last year. Renewed product demand supplemented by supply constraints resulted in improved commodity prices. Sales volumes increased by 7 percent against last year, driven by improved plant operating rates and healthy product demand. The overall growth in sales volumes translated into an increase of QR191 million in MPHC’s net earnings.
Positive trajectory in product prices and improved volumes were slightly offset by an increase in variable costs, which contributed QR 282 million negatively towards MPHC’s current year’s net earnings in comparison to last year.
The current year’s net earnings were positively impacted by a favourable variance amounting to QR43 million, in relation to inventory differentials, due to lesser inventory drawdowns during the year in comparison to last year.
Commenting on the financial and operational performance, MHPC Chairman Ahmad Saif Al Sulaiti said, “The main highlight for this year was a sequential macroeconomic recovery which led us to report one of the strongest set of financial results. Despite global supply-chain headwinds, our marketing and logistics team came out strongly to steer us and insulated our activities from any operational disruptions. While macroeconomic sentiments remained positive, we continued our journey to capitalize on our robust business strategies and build our reputation of delivering solid results in achieving operational excellence.”
Going forward, Sulaiti said, “We will continue to focus on productivity and achieving efficiency gains, while selectively investing in capital projects that would increase our competitiveness and create shareholder value.”
During the year, accelerated global GDP recovery on the back of positive macro drivers led to an increase in demand for downstream commodities. Industry supply remained tight on account of weather calamities in the US, higher energy prices in Europe, dual policy measures in China. Global supply chain challenges remained evident throughout the year. All of these factors led to wider supply-demand imbalances across commodities and resulted in elevated commodity prices for the year.
MPHC’s operations continue to remain robust and resilient with total production for the period reaching 1,135 thousand MTs, up by 9 percent against 2020. The overall increase in production volumes was mainly attributed to improved plant operating rates during 2021, despite a planned preventive maintenance shutdown which was carried out at the Chlor-alkali facilities during the fourth quarter of 2021.
On a quarter on quarter basis, a decline of 20 percent in production volumes was mainly attributed to chlor-alkali segment’s planned plant maintenance.
MPHC demonstrated superior operational agility by achieving its production targets while ensuring HSE standards remained buoyant. Q-Chem and Q-Chem II improved safety processes while logging a 14th consecutive year without a single recordable incident of heat stress. At MPHC’s Chlor-alkali segment, the QVC venture completed a challenging maintenance shutdown with excellent safety results.
Liquidity remained robust with cash and bank balances at QR3.9 billion as of 31 December 2021. Total assets at the end of 2021 amounted to QR17.4 billion and total equity amounted to QR17.1 billion.
The petrochemicals segment reported a net profit of QR1.4 billion for 2021, up by 201 percent against 2020. This notable increase in profitability was primarily driven by improved product prices owing to improved macro environment and supply shortages.
Sales volumes also increased by 11 percent, compared to last year, against a backdrop of higher plant operating days during the current year versus 2020. The increase in product prices coupled with improved sales volumes led to overall growth in revenues by 60 percent within the segment, to reach QR2.9 billion for the current year.
Production volumes increased by 14 percent against 2020, as the segment had a planned periodic turnaround of Q-Chem II facilities during the first quarter of 2020, which affected the overall operating rates for last year.
The Chlor-alkali segment reported a net profit of QR 476 million for 2021, increased significantly by 281 percent compared to last year. This notable growth was primarily driven by a significant improvement in blended average selling prices, which increased by 71 percent against 2020, complemented by renewed demand of end products on the back of constructive macroeconomic drivers and supply shortages.
Sales volumes marginally declined by 1 percent compared to last year. On an overall basis, revenue grew by 70 percent within the segment and marginally surpassed QR1 billion for the current year. Production volumes marginally rose by 2 percent against 2020, despite a planned periodic shutdown carried out during the fourth quarter of 2021.
After reviewing the current year’s financial performance, with present and potential liquidity position, and considering the current and future macroeconomic conditions, business outlook, CAPEX, investing and financing needs of the Group, the board of directors proposed a cash dividend of QR 0.11 per share, equating to 11 percent of the nominal share value, with a payout ratio of 74 percent of 2021 net earnings.