DOHA: Petrochemicals and metals company Industries Qatar (IQ) lifted first quarter net profit by over one third, beating analyst forecasts and joining other Gulf-based petrochemical firms in posting broadly positive earnings.
The Gulf’s second-largest chemical producer by market value after Saudi Arabia’s Saudi Basic Industries Co. (SABIC) reported net profit up 36.8 percent at 2.55 billion riyals ($ 714 million) for the first three months of 2013, versus 1.9 billion in the same period a year earlier.
It did not give any explanation for the increase.
Analysts polled by Reuters on average expected the company to post quarterly profit of 2.2 billion riyals.
“We continue to consider IQ our top pick among Qatari equities,” QNB Financial Services said in a research note after the results were announced.
“With major expansions now complete, significant cost-advantaged volume growth in fertilizers and petrochemicals should allow for decent earnings growth in 2013 even if economic conditions deteriorate.”
Shares in IQ closed 1 percent higher, prior to the results being announced.
Petrochemical prices have strengthened in recent years, but worries persist over the impact of a global slowdown on industry earnings in the region.
While many petchem producers in Saudi Arabia have seen falls in year-on-year net profit, most have beaten estimates except for when company-specific reasons have impacted, said Amer Khan, fund manager at Shuaa Asset Management in Dubai.
Yanbu National Petrochemical (Yansab) exceeded forecasts and SABIC was in line.
PetroRabigh reported a big loss after maintenance work disrupted production in the first quarter and Saudi International Petrochemical Co. (Sipchem) posted a 57.5 percent drop in net profit on plant shutdowns.
Qatar has embarked on a massive domestic building program in preparation to host the 2022 World Cup soccer tournament, with plans to spend $ 11 billion on a new international airport, $ 5.5 billion on a deepwater seaport and $ 1 billion for a transport corridor in the capital, Doha.
A year ago, IQ said the steel segment was expected to see “significant benefit from the progressive and wide-ranging infrastructure plans of the State of Qatar.”
