Mesaieed Petrochemical Holding Company (MPHC) - a holding company of QChem, QChem II and Qatar Vinyl Company - has inherent strengths to guard against the current unfavourable economic scenario, even as it plans further cost optimisation this year to enhance efficiency and shareholders’ value.
The group benefits from access to competitively priced feedstock under long-term supply agreement and also enjoys several synergies through integrated production and export operations, its chairman Ahmad Saif al-Sulaiti yesterday.
Moreover, through its marketing agent Muntajat, it has access to a diverse base of worldwide clients, and most importantly the group’s all production facilities are located within Qatar, a country with political and economic stability, he told the shareholders at the annual general assembly, which approved a total annual dividend of QR879.4mn, equivalent to QR0.7 per share and representing 80.9% of earnings-per-share.
Asserting that it can build on these core strengths to mitigate the risks and challenges from the current economic meltdown, al-Sulaiti said MPHC is confident that it is “well-positioned to withstand” the challenging times ahead.
Cognisant of the expected impact of falling oil prices on the group’s product prices and profitability in particular, a committee was established in 2015 to review the cost across all its group companies with an aim to identify potential cost savings and optimisation across the entire value chain, including review of operational assets and processes without compromising the quality, health, safety and environment, he said.
Highlighting that these efforts have resulted in approximate savings in costs of QR132mn in 2015; al-Sulaiti said “the group companies have plans to optimise the costs further in the forthcoming year.” MPHC closed the year ended 2015 with a net profit of QR1.1bn, a decrease of QR0.7bn, or 39.5 % over the same period in 2014, while the fourth-quarter earnings of QR300.8mn were down 21.5%, over the third quarter of 2015.
Due to unfavourable conditions experienced during the year, the group closed the year with 9.6% less than the budgeted profit, said the board of directors report.
Following the decline in crude oil prices during 2015, the product prices of the company declined in 2015, which affected not only MPHC but many companies across the globe, MPHC managing director Khalid Mohamed al-Subaey said.
Highlighting that the results for 2015 did not “significantly” affect on factors within its control, he said “in this regard, we initiated cost-optimisation measures amongst the group companies. With the continuous co-ordination with and co-operation from the group companies, we were able to optimise costs and pose good results for 2015.”