Qurain Petrochemical Industries Company posts net profit of KD 18.16 million for the first quarter of 2011
April 27, 2011
Kuwait City, 27th April, 2011: Qurain Petrochemical Industries Company (QPIC) posted strong financial results for the first quarter ended 31 March 2011 with net profit of KD 18.16 million.
Announcing the results, Chairman Sheikh Mubarak Alabdullah Almubarak Alsabah said that QPIC Board of Directors approved on 27 April 2011, the financial statements of the company for first quarter ended 31 March 2011, and the company posted net profits of KD 18,160,921 compared with net profits of KD 3,251,537 for the same quarter in 2010.
The increase is 459% higher than the profits of same quarter last year with a difference of KD 14,909,384.
Earnings per share for the quarter stood at 16.58 fils per share, compared with earnings per share of 2.97 fils for the same quarter in 2010.
The Company received excellent dividends from Equate and TKOC totaling to KD 14.20 million during first quarter of 2011.
Also, as a result of booming Paraxylene and Styrene prices during the first quarter, Kuwait Aromatics Company (KARO) has shown significant profit for the period. This is 200% higher than the profit shown for the similar period last year.
It is to be noted, although Kuwait Aromatics Company has shown significant profit for the period, the Paraxylene Project is still threatened and is simply going through a temporary phase of high prices for Paraxylene material globally, which has seen an increase from $ 700 to $ 1400 per ton. But that can be described as an external factor for the projects and it will be threatened once the prices come back to the earlier levels. The main reasons for the projects problems are; lack of proper support, like enjoyed by other projects, the high cost of establishment which is very high in comparison with other similar projects globally, and finally the high operating costs compared to its equivalents globally.
The total assets of the Company stood at KD 211.22 million at 31 March 2011 as compared to KD 193.22 million at 31 December 2010 an increase of 9.3%, KD 17.99 million. Also, Investment in associates has gone up by 14 % (KD 5.72 million during this period).
Talking about the petrochemical sector, Sheikh Mubarak says that this sector in Kuwait is still emerging although there are a lot of excellent opportunities, but the urgent need for lands and infrastructure is halting the progress in such field. He added Kuwait is in need to establish specific industrial area dedicated for petrochemical sector industries where proper infrastructure is in place and which will be the main factor to encourage a sustainable development in this sector.
He also added, that the government has to place more efforts towards supporting the development of such projects, against those advantages available in other Arab and gulf economies such as availabilities of cheap inputs are not sufficient for the developments, there is a need for investment promotion and better planning from the authorities to increase the activates in this vital sector.
Regarding pricing, he stated that KPC is in need to price the production’s inputs in a way that would encourage these industries and this was achieved successfully in other countries as in Saudi Arabia where they made efficient pricing policies and led to excellent results from the petrochemical sector, which reflected on the economy as a whole.
Regarding the company’s future plans, he stated that the cooperation with global companies is an essential matter in order to develop more technologies and gain new experiences in the petrochemical sector, and QPIC is looking forward to have a partnership with well reputed entities and always looking for such investment opportunities in different markets whether local or in the middle east or in north Africa.
The major investment for the company are Kuwait Aromatics Company and Kuwait Paraxylene Products Company which QPIC holds 20% with an annual capacity of 830,000 tons of paraxylene and 370,000 tons of benzene, QPIC Also owns 11.5% indirectly through KARO in The Kuwait Styrene Company with an annual capacity of 450,000 tons of Styrene Monomer, the company’s investment through Equate with stake of 6% with capacity of 830,000 tons of poly ethylene, and 600,000 tons of ethylene glycol, And finally the company’s investments through The Kuwait Olefins company which QPIC holds stake of 6% with capacity of 850,000 tons of ethylene and 700,000 tons of ethylene glycol.
Regarding Algerian Methanol Project, The Algerian partner Sonatrach requested significant changes to the framework agreement. Therefore, QPIC is re-evaluating its position in the project which aims to produce one million tons of methanol in Algeria. The project is worth US$ 700-800 million.