Market heavyweight Industries Qatar (IQ) – the holding entity of Qatar Petrochemicals, Qatar Fertilisers and Qatar Steel – has reported a 7% year-on-year jump in net profit to QR3.5bn in the first nine months (9M) of 2024.

The group’s operations continue to remain stable and reliable as production volumes for the current period improved versus 9M-23, largely driven by marginally stable operating rates, and plant availability across all the segments amid planned and unplanned maintenance across most segments together with additional capacity in the steel segment on account of Al-Qataria acquisition.

Group revenue for 9M-24 moderately declined year-on-year to QR12.7bn, primarily due to an overall decline in average selling prices.

Sales volumes for 9M-2024 rose marginally versus 9M-2023, driven by stabilisation of demand, resulting from gradual easing of macro-economic challenges and supply-bottlenecks. Despite ongoing regional uncertainties and variations in shipment timing across some segments, overall sales volumes improved. This positive trend was further supported by a year-on-year increase in production levels.

The Group’s financial position continues to remain robust, with robust proportionately accounted cash and bank balances as of September 30, 2024, after accounting for a dividend payout relating to 2023 of QR4.7bn and 2024 interim dividend amounting to QR1.9bn. Currently, the group has no long-term debt obligations.

The Group reported total assets and total group equity of QR40.9bn and QR36.9bn respectively. It generated positive operating cash flows of QR3bn, with free cash flows of about QR1.3bn during first nine months of 2024.

The petrochemicals segment reported a net profit of QR1.2bn for 9M-2024, showing an improvement of 2% on an annualised basis on account of higher segment’s revenue, while the segment successfully maintained its margins.

Despite challenging macroeconomic conditions, the segment witnessed some signs of recovery during the year, reflecting in marginally improved sales volumes, although average selling prices were slightly lower against the same period of last year.

Production levels remained "relatively stable" throughout this period. The segment ability to navigate these market conditions effectively, capitalising on slight improvement in macroeconomic factors and maintaining operational efficiency, contributed to the overall increase in profit.

The fertiliser segment reported a 14% growth in net profit to QR1.6bn for 9M-2024, driven by reduced operating costs. The improvement in operating costs was mainly associated with lower variable costs, owing to decreased feedstock prices and favourable inventory changes. Additionally, sales volumes marginally improved due to increased production volumes compared to the same period last year.

Despite the improved profitability, the segment’s revenue was down 2% to QR5.58bn in 9M-2024 due to lower selling prices, which was partially offset by improved sales volumes. Selling prices declined marginally as nitrogen fertiliser prices have stabilised to their long-term averages since peaking in 2021.

The steel segment reported a net profit of QR435mn, up 7% on an annualised basis, mainly on recognition of one-off other income related to reversal of a bank guarantee that was previously provided to one of its associates.

The segmental revenue declined 10% to QR2.94bn due to a combined effect of lower prices and volumes. Steel prices, on average, declined due to higher supply in the market and softening of both domestic and international demand.