Doha: Mesaieed Petrochemical Holding Company (“MPHC” or “the Group”; QE ticker: MPHC), yesterday announced a net profit of QR398m for the six-month period ended 30 June 2024, representing a decline of 32 percent compared to H1 2023.

Macroeconomic climate remained wavered during h1 2024, as market sentiment remains dedicated by uncertainty toward global economies recovery, in addition to recessionary fears linked to inflation related pressures and higher interest rate environment.

On overall, commodity prices for MPHC’s basket of products declined on a year-on-year basis mainly due to cautious approach from buyers amid macro-headwinds, coupled with comparatively lower energy prices. On quarter-on-quarter basis, prices have inched up as global economies are showing signs of gradual recovery.

MPHC’s operations continue to remain robust and resilient with total production for the current period reaching 554 thousand MTs. Production for H1 2024 increased by 4 percent versus H1 2023, mainly due to a maintenance turnaround carried out at QVC facilities during H1 2023 which affected production volumes of comparable period.

On a quarter-on-quarter basis production volumes for Q2 2024 declined marginally by 2 percent in comparison to Q1 2024, mainly due to a decline noted in production volumes from petrochemicals segment, linked to maintenance turnaround. MPHC reported a net profit of QR398m for the six-month period ended 30 June 2024, down by 32 percent compared to the last year. This decline in profitability was mainly linked to decline in selling prices by 13 percent resulting in lower revenue by 7 percent to reach QR1.4bn.

Drop in Group revenue was mainly linked to the decrease noted in average blended product prices, which declined by 13 percent compared to H1 2023, translating into a negative price variance of QR126m in MPHC’s current period net earnings as compared to the same period of last year. Subdued product demand amid macroeconomic uncertainties resulted in lowered commodity prices.

On the other hand, sales volumes increased by 8 percent versus H1 2023, mainly driven by higher sales volumes reported by the chlor-alkali segment partially offset by lower sales volumes reported by the petrochemicals segment. Positive movement in sales volumes translated into an increase of QR27m in MPHC’s H1 2024 net earnings versus the same period of last year.

While EBITDA for the current period amounted to QR 627 million noted a decline of 21% versus 1H-23, mainly due to lower revenue. EBITDA margins for 1H-24 reached 44% versus 52% achieved during 1H-23 mainly affected by the decline in selling prices.

MPHC’s bottom-line profitability increased by 5 percent versus Q1 2024, mainly due to higher revenue where an incline of 3 percent was noted on a quarter-on-quarter basis.

Increase in revenue was mainly linked to higher selling prices by 2 percent, and marginally higher sales volumes by 1 percent versus Q1 2024, as result of increased production volumes from Chlor-alkali segment fully offsetting the decline in Petrochemicals segment linked to maintenance turnaround during the quarter. This translating to a positive volume variance of QR5m.

Selling prices improved marginally by 2 percent compared to previous quarter, mainly on the backdrop of relatively enhanced supply-demand dynamics translating to a positive price variance of QR15m.

MPHC will host an IR earnings call with investors to discuss its results, business outlook and other matters on Sunday, 18 August 2024 at 1:30 p.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. MPHC’s bottom-line profitability declined by 35 percent versus Q2 2023, mainly due to lower revenue by 11 percent compared to the same quarter of last year.

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