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INVESTOR RELATIONS: Quarterly Financial Update For the period ended 31 March 2010. Release Date: 21 st July, 2010. Disclaimer & General Notes. Industries Qatar QSC:

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INVESTOR RELATIONS: Quarterly Financial Update For the period ended 31 March 2010

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Investor relations quarterly financial update for the period ended 31 march 2010

INVESTOR RELATIONS:

Quarterly Financial Update

For the period ended

31 March 2010

Release Date: 21st July, 2010


Investor relations quarterly financial update for the period ended 31 march 2010

Disclaimer & General Notes

  • Industries Qatar QSC:

  • The companies in which Industries Qatar QSC directly and indirectly owns investments are separate entities. In this presentation, “IQ” and “the group” are sometimes used for convenience in reference to Industries Qatar QSC.

  • Disclaimer:

  • This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Industries Qatar QSC. All statements other than statements of historical fact are deemed to be forward-looking statements, being statements of future expectations that are based on current expectations and assumptions, and involve known and unknown risks and uncertainties that could cause actual results, operations and business performance or events impacting the group to differ materially from those expressed or as may be inferred from these statements.

  • There are a number of factors that could affect the realisation of these forward-looking statements such as: (a) price fluctuations in crude oil and natural gas, (b) changes in demand or market conditions for the group’s products, (c) loss of market share and industry competition, (d) environmental risks and natural disasters, (e) changes in legislative, fiscal and regulatory conditions, (f) changes in economic and financial market conditions and (g) political risks. As such, results could differ substantially from those stated, or as may be inferred from the forward-looking statements contained herein. All forward-looking statements contained in this presentation are made as of the date of this presentation, as marked on the Cover page.

  • Industries Qatar QSC, its Directors, officers, advisors, contractors and agents shall not be liable in any way for any costs, losses or other detrimental effects resulting or arising from the use of or reliance by any party on any forward-looking statement and / or other material contained herein. Industries Qatar QSC, its subsidiary, joint ventures and associated companies are further in no way obliged to update or publish revisions to any forward-looking statement or any other material contained herein which may or may not be known to have changed or to be inaccurate as a result of new information, future events or any reason whatsoever. Industries Qatar QSC does not guarantee the accuracy of the historical statements contained herein.

  • General Notes:

  • IQ’s accounting year follows the calendar year. No adjustment has been made for leap years.

  • Where applicable, all values refer to IQ’s share.

  • Values expressed in QR billions and percentages have been rounded to 1 decimal point. All other values have been rounded to the nearest whole number.

  • Values expressed in US $’s have been translated at the rate of US $1 = QR3.64.

INDUSTRIES QATAR|Quarterly Financial Update |2


Investor relations quarterly financial update for the period ended 31 march 2010

Key Highlights

  • All group companies achieved Q1 budgets

  • Gross profit: +2%; Net profit: +15%

  • Revenue up on last year and last quarter

  • Revenue: +22% v Q1, 2009 and +3% v Q4, 2009

  • Total utilisation above 100%

  • However, impacted by unplanned MTBE shut-down in QAFAC for 38 days

  • Mixed price results

  • Petrochemical: Strong recovery; Fertiliser: Modest improvement; Steel: Marginal deterioration

  • Gross Margins improved on last year

  • Primarily due to improved prices and reduced input costs (especially iron ore)

  • Net Profit below last year by 14%

  • ‘Price difference’ claim of QR800m booked in Q1, 2009

  • Projects on track

  • RLOC / Qatofin: commercial production started in Q2, 2010; LDPE 3, QAFCO 5 and QAFCO 6 all on track

  • Significant PUD investment YTD

  • Incremental spend of QR1.4bn in QAFCO 5 and QAFCO 6

  • Positive Free Cash Flow position

  • Free Cash Flow of QR0.2bn during Q1, 2010

INDUSTRIES QATAR|Quarterly Financial Update |3


Investor relations quarterly financial update for the period ended 31 march 2010

Q1 Performance v Budget

  • All key budget lines achieved

  • All companies achieved budget

  • Full year budget appears achievable

  • Revenue up primarily due to better than expected petrochemical prices

  • G&A controlled, Finance Cost savings due to low LIBOR rates

INDUSTRIES QATAR|Quarterly Financial Update |4


Investor relations quarterly financial update for the period ended 31 march 2010

Revenue, Net Profit By Quarter

  • Revenue up - year on year and quarter on quarter

  • Revenue up +22% on Q1, 09 and +3% on Q4, 09

  • All segments reported revenue growth on last year

  • Petrochemicals: +56%; Fertiliser: +21%; Steel +1%

  • Other Income decreased in Q1, 2010

  • ‘Price Difference’ claim of QR800m reported in Q1, 2009

  • Net Profit down although Operating Profit nearly doubled

  • Operating profit up by QR532m, partially offset Other Income reduction

INDUSTRIES QATAR|Quarterly Financial Update |5


Investor relations quarterly financial update for the period ended 31 march 2010

Price / Volume Variance Bridge

  • Revenue improvement principally due to product prices

  • Petrochemicals: QR437m; Fertiliser: QR87m; Steel: QR-69 m

  • Aided by improved fertiliser / steel volumes

  • Petrochemicals: QR-95m; Fertiliser: QR31m; Steel: QR78m

  • Petrochemical volumes affected by unplanned shut-down

  • Unplanned MTBE plant shutdown for 38 days

INDUSTRIES QATAR|Quarterly Financial Update |6


Investor relations quarterly financial update for the period ended 31 march 2010

Mixed price performances

Sustained petrochemical product prices recovery

Modest fertiliser price recovery

Steel prices still deteriorating

INDUSTRIES QATAR|Quarterly Financial Update |7


Investor relations quarterly financial update for the period ended 31 march 2010

Utilisation Rates By Plant / Product

  • MTBE plant’s low utilisation due to unplanned shut-down

  • MTBE plant had an unplanned shut-down of 38 days

  • LDPE and Urea plants, and Bar Mills had planned shut-downs in Q1, 2010

  • Planned MTBE shut-down in Q2, 2010

INDUSTRIES QATAR|Quarterly Financial Update |8


Investor relations quarterly financial update for the period ended 31 march 2010

Gross Margin By Segment

  • Gross Margin improved by 15%

  • Petrochemical margins improved mainly due to prices

  • LDPE and MTBE prices up by more than 70%

  • Fertiliser margins flat YoY

  • Steel segment benefited due to reduced iron ore costs

INDUSTRIES QATAR|Quarterly Financial Update |9


Investor relations quarterly financial update for the period ended 31 march 2010

Summary Profit & Loss

  • Gross Profit improved by QR549m or 78%

  • Increase in Selling Expenses mainly due to increased revenues

  • G&A controlled

  • Other affected by reduced Other Income (QS ‘Price Difference’ claim booked in Q1, 2009) but aided by improved performance of Associates (QVC and GIIC).

INDUSTRIES QATAR|Quarterly Financial Update |10


Investor relations quarterly financial update for the period ended 31 march 2010

Summary Balance Sheet

  • Increase in Total Assets mainly due to investments in projects

  • QR1.4bn invested since Dec, 09 mainly in QAFCO V and QAFCO VI

  • Working Capital improved

  • Working Capital improved by QR441m

  • Strong financial position

  • Credible quick ratio (Q1=3.61 v Q4, 09=4.1) and Debt to Equity ratio (Q1, 10=33.0%, Q4, 09= 31.6%)

INDUSTRIES QATAR|Quarterly Financial Update |11


Investor relations quarterly financial update for the period ended 31 march 2010

Summary Cash Flow Statement

  • Significant spend in PUD

  • QR1.4bn invested since 12/2009 mainly in QAFCO V and QAFCO VI

  • Positive Free Cash Flow position

  • Free Cash Flow of QR0.2bn during Q1, 2010

  • Drawdown on loans

  • Principally attributable to QAPCO QIB drawdown of QR728m

INDUSTRIES QATAR|Quarterly Financial Update |12


Investor relations quarterly financial update for the period ended 31 march 2010

About Industries Qatar QSC

Industries Qatar QSC:

Industries Qatar QSC (“IQ”) was incorporated as a Qatari joint stock company on April 19, 2003. The business operations of the company comprise the direct holding of shares in the following subsidiary and joint venture companies: (i) Qatar Steel Company QSC (“QS”), a wholly-owned subsidiary, engaged in the manufacture and sale of steel billets and reinforcing bars; (ii) Qatar Petrochemical Company Limited QSC (“QAPCO”), a joint venture owned 80% by IQ, engaged in the production and sale of ethylene, low-density polyethylene (“LDPE”), linear low-density polyethylene (“LLDPE”) and sulphur; (iii) Qatar Fertiliser Company SAQ (“QAFCO”), a joint venture owned 75% by IQ, engaged in the manufacture and sale of ammonia and urea; (iv) Qatar Fuel Additives Company Limited QSC (“QAFAC”), a joint venture owned 50% by IQ, is engaged in the production and export of methanol and methyl-tertiary-butyl-ether (“MTBE”); and (v) Fereej Real Estate Company, a joint venture owned 34% by IQ, engaged in investing in residential and commercial buildings, and the provision of facilities management and construction project management services.

Qatar Petroleum, the largest shareholder, provides all of the head office functions for IQ through a comprehensive service directive. The operations of the subsidiaries and joint venture remain independently managed by their respective Boards of Directors and senior management teams.

Fereej Real Estate Company

Incorporated in 2008 as a joint venture, Fereej is currently owned by IQ (34%), Qatar Real Estate Investment Company (33%) and Al-Koot Insurance And Re-Insurance Company (33%). The company’s activities are focused on investing in residential and commercial buildings, and the provision of facilities management and construction management services.

Qatar Fertiliser Company SAQ

Qatar Fertiliser Company SAQ (“QAFCO”) is the world’s largest single site producer of urea and ammonia. It was incorporated in 1969 and is currently a joint venture between Industries Qatar QSC (“IQ”) [75%], Fertiliser Holdings AS (10%) and Yara Netherland BV (15%). QAFCO is engaged in the manufacture and sale of ammonia and urea, which are sold primarily in the Indian sub-continent, and urea formaldehyde condensate.

INDUSTRIES QATAR|Quarterly Financial Update |13


Investor relations quarterly financial update for the period ended 31 march 2010

About Industries Qatar QSC

Qatar Petrochemical Company Limited QSC

Incorporated in 1974 as a joint venture, Qatar Petrochemical Company Limited QSC (“QAPCO”) is currently owned by Industries Qatar QSC (“IQ”) [80%] and TOTAL Petrochemicals (France) [20%]. QAPCO has two joint ventures, Qatofin Company Limited QSC and Ras Laffan Olefins Cracker Company, and two associated companies, Qatar Vinyl Company Limited QSC and Qatar Plastic Products Company WLL.

QAPCO was established with the aim of utilising the associated and non-associated ethane gas from petroleum production. QAPCO is one of the leading producers of ethylene and variable grade low-density polyethylene (“LDPE”) [under the brand name “Lotrene”] in the Middle East, with sulphur being its by-product. The LDPE is marketed in over 75 countries, with the main markets being the Middle East, Far East, Africa and the Indian sub-continent. A substantial part of the ethylene produced is used in the LDPE production process, with the remainder being supplied to QAPCO’s associate, QVC, to meet its feed requirements. In 2009, QAPCO commenced production of linear low-density polyethylene (“LLDPE”).

Qatar Fuel Additives Company Limited QSC

Incorporated in 1991 as a joint venture, Qatar Fuel Additives Company Limited QSC (“QAFAC”) is currently owned by Industries Qatar QSC (“IQ”) [50%], OPIC Middle East Corporation [20%], International Octane Limited [15%] and LCY Middle East Corporation [15%]. The company was established as part of Qatar’s strategic plan to diversify its petrochemical base and expand its downstream industries. It is recognised as a producer and exporter of high quality methanol and methyl-tertiary-butyl-ether (“MTBE”). Its primary markets are the Far East, Europe and the Gulf region.

Qatar Steel QSC

Qatar Steel QSC (“QS”) was the first integrated steel producing company in the GCC region and is Qatar’s sole steel producer. Originally incorporated in 1974 as a joint venture between the State of Qatar, Kobe Steel and Tokyo Boeki, QS was subsequently wholly-acquired by Industries Qatar QSC (“IQ”) in 2003. QS is engaged in the manufacture and sale of steel bars, billets and reinforcing bars, which are sold primarily in the local and GCC markets.

INDUSTRIES QATAR|Quarterly Financial Update |14


Investor relations quarterly financial update for the period ended 31 march 2010

  • For further information, Industries Qatar can be contacted as follows:

  • Email: [email protected]

  • Telephone: (974) 4430-8681

  • Fax: (974) 4429-3750

  • Mail: PO Box 3212, Doha, State of Qatar

  • Please refer to www.iq.com.qa for the latest information, publications, press releases and presentations about Industries Qatar and the IQ group.

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