Good day, welcome to the Industries Qatar Quarter Three 2021 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Bobby Sarkar. Please go ahead, sir. Thank you, Keane. Hi. Hello, everyone. This is Bobby Sarkar, Head of Research at QNB Financial Services. I wanted to welcome everyone to Industries Qatar's third quarter and nine months 2021 results conference call. On this call from QPs Privatized Companies Affairs Group, we have Mohammed Al-Sulaiti, who is the Manager in Privatized Companies Affairs. We have Abdulla Al-Hay, who is Assistant Manager in Financial Operations, and we have Riaz Khan, who is the Head of Investor Relations and Communications. We will conduct this conference with first management reviewing the company's results, followed by a Q&A. I would like to now turn the call over to Riaz. Riaz, please go ahead. Thank you, Bobby. Good afternoon, and thank you all for joining us. Hope you're all doing great. Before we go into the business and performance updates of IQ, I would like to mention that this call is purely for investors of IQ and no media representatives should be attending this call. Moreover, please note that this call is subject to IQ's disclaimer statements as detailed on slide number two of the IR deck. Moving on to the call on 25th of October, IQ published its reserves for the nine months period ended 13th of September 2021. Today in this call, we'll go through these results and provide you an update on key financial and operational highlights. We have structured our call as follows. At first, I will provide you with a quick insight on IQ's ownership structure, competitive advantages, and overall governance structure. Secondly, Abdulla will brief you on IQ's key operational and financial performance metrics. Later, I will provide you with an update on latest segmental performance. Finally, we will open the floor for the Q&A session. To start with, as detailed on slide five, the ownership structure of IQ comprises of QatarEnergy with 51% stake, and the rest is in free float held by various domestic and international corporates and individuals. IQ is credit rated by S&P with A+ and Moody's with A1 credit rating with a stable outlook. QatarEnergy, being the main shareholder of IQ, provides most of the head office functions through a service level agreement. The operations of IQ group companies are independently managed by its respective board of directors along with its senior management team. In terms of competitive strengths, as detailed on slide eight, the group is well-positioned with several competitive advantages it possesses strategically, operationally, as well as financially. These strengths include an efficient and well-maintained asset base, a qualified and highly trained workforce, a short supply of feedstock and competitively priced energy contracts, lower operating costs, a dedicated marketing team in form of Muntajat to market group's petrochemicals and fertilizer products, and most importantly, a well-experienced senior management team. As detailed on slide 10, from competitive positioning perspective, IQ ranks among top-tier companies within the regional downstream space across most of its matrices. In terms of governance structure of IQ, you may refer to slides 48 and 49 of the IR deck, which covers various aspects of IQ's code of corporate governance in detail. I will now hand over to Abdullah. Salam Alaikum. Thank you, Riaz. Good afternoon, and thank you all for joining us. During the first nine months of 2021, the group benefited from a strong economic recovery, coupled with supply constraints, resulted in improved price level, which translated into an improved set of financial results. For the nine-month period ended 30 September 2021, the group recorded a net profit of QAR 5.6 billion as compared to QAR 1.2 billion for the same period last year, up by 360% as detailed on slide number 16. Group's improved financial performance for the nine-month period of 2021 versus last year was largely attributed to the improved product price, which on an average inclined by 43% and translated into an increase of QAR 5.3 billion in the group bottom line earnings, as you can see on slide number 17. Sales volume furthered by 34% versus last year, mainly driven by sales volume relating to QAFCO trains one to four, which were fully reported as part of 2021 volumes and was not the case in last year, where QAFCO was operating under temporary gas processing arrangements for the first seven months of 2020. The improvements in the sales volumes were offset to an extent by the reduction in volumes during the current period due to the mothballing of steel facilities, commercial shutdowns in the fuel additive facilities, and unplanned shutdown at certain fertilizer facilities. As shown on slide number 17, the overall growth in sales volume contributed by QAR 1.7 billion positively to the current period bottom line earnings versus last year. The overall growth in selling price and sales volume led to an overall growth in revenue for the group, which increased by 76%. During the first nine months of 2021 versus the same period of last year, to reach QAR 14.1 billion. As detailed on slide number 15, the group production levels were down on last year by 3%. This decline mainly attributed to the mothballing of certain steel facilities, which started since mid of 2020. Periodic planned and unplanned maintenance shutdown at certain QAFCO facilities and commercial shutdown at MTBE facilities. Moving on quarter-on-quarter performance compared to the second quarter of 2021. The group revenue net profit remained relatively flat during Q3 of 2021. The benefits captured from improved selling price by 8% were almost offset by reduced sales volumes and lower plant operation rates, especially with fertilizer segments and lesser steel demand in domestic markets due to seasonal effects. Our robust business model and the strength of our global supply chain continued to leverage our resilience and provided flexibility to our operations, where our continued positioning of being a low-cost operator ensured our competitive edges and aided to generate one of the strongest quarterly performance since Q2 of 2012. As detailed on slide 19, IQ's EBITDA margin continued to remain robust. This is a testament of group cost management and cash conversion capabilities, which an ability to maintain its cash flow despite volatile trends and commodity prices. Also, we continued to build our strong financial position with improved cash flow generation capabilities, and the group generated QAR 5.6 billion in term of free cash flow during the first nine months of 2021, as detailed on slide 18. I will now hand over to Mr. Riaz to cover the segmental performance. Thank you, Abdulla. I will start with the petrochemical segment. As detailed on slide 25, performance of petchem segment improved with a net profit of QAR 2.2 billion for the first nine months of 2021, with an increase of 248% versus last year. This notable increase in profits was primarily driven by improved product prices on the back of improved demand for petrochemical products due to better macroeconomic conditions while supply remained constrained. Segment's blended product prices rose by 62% on a year-on-year basis, while sales volumes were up by 6% compared to the same period of last year. The growth in product prices, coupled with sales volumes, led to an overall rise in revenue by 72% within the segment to reach QAR 4.7 billion for the current period. Production volumes were up on last year by 6%, as segment had higher operating days during the current nine months period compared to that of last year's. As detailed on slide 26, segment's EBITDA margin continued to remain strong. In terms of segment revenue by geography, as detailed on slide 27, Asia remains the main market for PE and MTBE, whereas Indian subcontinent remains a key market for methanol and polyethylene. Moving on to the fertilizer segment, as detailed on slide 31. The segment reported a net profit of QAR 2.8 billion for the first nine months of 2021, with an increase of 436% versus last year. This increase was mainly driven by growth in revenues, which increased by 119% during the current period versus last year to reach QAR 6.5 billion. Selling prices improved by 69% versus the same period of last year, while sales volumes increased by 68%. On the other hand, production volumes within the segment remained unchanged versus last year. As detailed on slide 32, segment's EBITDA margins continued to remain robust. In terms of segment revenue by geography, as detailed on slide 33, North and South American markets remain key markets for fertilizers, along with Indian subcontinent and Asia. Let's discuss the steel segment, and you may refer to slides 35 till 40. During the latest nine months period, the steel segment continued its profit-making trajectory after having a difficult first half of last year following strategic restructuring initiatives implemented. Net profit for the current period amounted to QAR 629 million versus a net loss of QAR 1.4 billion during the first nine months of last year. On an overall basis, segmental revenue was up by 25%, mainly on the back of increasing selling prices, which actually increased by 31% on a year-on-year basis. The growth in selling prices was offset by a decline in sales volumes to an extent and declined by 6%. Mothballing of certain steel facilities allowed the segment to primarily focus on profitable domestic market, which led to adjust its cost base. Due to improvement in international prices, the segment was also able to sell some of the quantities outside the domestic market. By changing raw material mix, the segment reduced its production cost without affecting the quality of the final product. All of this led to a strong sequential recovery in EBITDA margins on a year-on-year basis, which is detailed on slide 38. We may open the floor for the Q&A session. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, press the star followed by the one to ask a question. We'll now pause for a moment to allow everyone an opportunity to signal for questions. Hi, Keane. This is Bobby again. While we are polling for questions, let me just get started with a couple of my own, if I could. I think you've discussed maintenance in the petrochemical segment for a couple of months in the fourth quarter and a couple of trains also in the fertilizer segment being offline for 30 days for planned maintenance. Could you please talk a little bit about how that would affect your outlook for sales volumes in the fourth quarter, if you could? Thank you so much. Yes. Hi, Bobby. Yes, as we have highlighted that during Q4, we have a shutdown activity at QAFCO, which is a planned one. The impact we're going to see it during the result of Q4, but this been planned too. The same, we have one train in the fertilizer under routine maintenance during Q3, actually, so it's been passed. However, QAFCO, we are going to have the maintenance during the Q4, where the impact going to be not a huge impact on the sales volume. The production volumes will go down by 130,000 metric ton during the year, related to the LLDPE product production. Okay, great. Thank you. We can open up for other questions. We can now take the next question from Faysal Al-Azmeh from Goldman Sachs. Hi, thanks for the opportunity to ask questions. Just a few on my end, maybe starting off with the steel business, just trying to understand the volume trajectory there and why effectively have sales come down in Q3 versus what we saw in the first half of the year. If you can, in terms of volume sales, I think you've booked around 220,000 versus what we saw well above 300 in the first and second quarter. My second question really relates to the petchem margins. If you look at the EBITDA margin forecast, or, sorry, the realized margins that you have in the slide deck. Despite higher prices achieved in Q3 versus the first quarter of this year and not the second quarter, your margins are lower than what you've realized in the first quarter. I'm just trying to get a sense of your cost structure and whether you've had any inflationary pressure from what's happening globally on the feedstock side, and does it impact you in any way? The third question just relates to the utilization rates chart that you have in the slide deck, slide 20. Just looking at QAFCO's levels. You operated at 95.8%, that assumed somewhat of a 6% decline in volumes. When taking into consideration the shutdown in Q4, does that keep you flat on a utilization rate basis versus Q3, given that you've had also a shutdown in Q3, or should we assume somewhat of a decline versus what you've achieved in Q3? Thanks. Yes. We'll start with the steel sales volume. Actually, the sales volume impacted due to the construction activity happening locally, where it's basically impacted by the seasonal activities. That's what we have highlighted in our report. We hope the activity will come back to its normal level as Q1 during also the upcoming months in the Q4 and in the first quarter of 2022. Related to the EBITDA margin. Yes. Should we assume somewhat volumes in Q4 to be close to what they were in the first half on average, or do you think it takes time for volumes to recover? Just trying to get a sense from- I think for the Q4, it's going to be remaining as Q3. Okay Based on the business picking up and based on the market situation, hopefully it's going to be normalized back as Q1 of 2021. The only maybe just to add on to that, Faisal, the seasonality of Q3 is mainly due to the summer months of the year. The only impact that we may see in Q4 may be related to the Arab Cup. We expect that during the 30 days of the Arab Cup being in Qatar, that construction could be on a slowdown. That's one month out of the three months of the quarter, which we expect to be slightly slow locally in Qatar. However, apart from that, we expect it to be as compared to Q1 and Q2 of this year. Got it. Faisal. Yeah. In terms of EBITDA margins, if you will notice on slide 38, the EBITDA margins have slightly become a bit moderated, I would say, because they were on a higher side with 28%. As you know, we started to realize high-priced iron ore, which was bought in the first half of this year. That really got translated into the cost in Q3, that's how you're seeing a slight moderation in the EBITDA margins. I believe he's asking about the petchem, correct? Yes. I'm just asking whether there's a link on the cost structure with what's happening with the Asian LNG prices. Yeah. Riaz, he was just explaining the EBITDA margin related to the steel segment. Right now, if you can just take us, Riaz. In terms of petchems, what you're seeing, the adjustment, normally we have been crossing the range of more than 50%, I would say. The end product prices at times, they play a part when they affect your feedstock costing. That is something that's why you slightly see a slight squeeze in terms of the EBITDA margins. On overall basis, it's still, we believe these EBITDA margins are very strong and very competitive. Okay. Related to the I hope we answered the first question. Okay. Related to the utilization of the QAFCO, the utilization level, we probably going to see also a further slight reduction on that utilization level, which is basically due to the plant shutdown activity in one of the trains. Thank you very much. You're welcome. We can now take the next question from Alex Comer from J.P. Morgan. Yeah. First of all, I didn't quite follow on from Bobby's question in terms of, I think you said that the sales tonnes would not be down much in the petrochemical division, but then I think you said production was going to be down 130 tonnes. Could you just confirm what expectations you have for sales in terms of tonnes in the petrochemical business in Q4 and also, if you could, the fertilizer business? That's my first question. Secondly, you obviously had a very good year, so congratulations. In Q4, if we look at where particularly where urea prices are, it's going to be very strong. Any guidance you can give us on the dividend, and how you'll be thinking about that going forward, particularly sort of payout ratio, et cetera? That's my second question. I'll let other people ask some, and then I may come back with a couple more later. Okay, thanks. All right. Maybe I will take the first part, and the second part can be taken care of by Mohammed. The sales of the petrochemical and the fertilizer, it will be a reflection of the production. Just to confirm, again, 130,000 metric ton of the petrochemical impact during Q4. Fertilizer, there will be a slight impact due to the one train of the plant shutdown as well, and this definitely going to have a reflect on the sales volume. However, all these maintenance are planned maintenance, and it's in our schedule. Related to the dividends, maybe Bujaber. Yeah. Answer the question on the dividends, I think you've mentioned great results this year. You're also mentioning strong prices and good prices in Q4. There's no doubt that it's an exceptional year in 2021 in terms of prices and in terms of financial results. It's very difficult for me to be able to comment on what a dividend payout would be. That would be really dependent on how the next two months prevail and what our expectations for prices are in 2022 and the future years, which we're currently in the process of finalizing. We're in the process of looking at or preparing our budget and business plan. It would be very dependent on what kind of assumptions we have for future years, what kind of maintenance schedules we have for the future years as well. That would drive the discussion at the board level and then the dividend discussion as well as the decision. I would refrain from making any statement on the dividends. As I said, it's an exceptional year. It's very difficult for me to make a statement that I can stick to. Thank you. Maybe I could just ask one more quick question. There's been a lot of interest in blue and green ammonia, and you guys are obviously very well-placed, given your position on the cost curve and also access to gas and fields, and also very low solar costs. Any planning at the minute to look at this and develop this for IQ going forward? That's being looked at by various, I'd say, relevant or related departments within QatarEnergy, so it's a part of the pipeline of, I'd say, market development or product development. Again, it's at different phases of reviews and discussions. It's in the pipeline and in the plans, but nothing to be announced or shared with the shareholders as of yet. Okay, thank you. Once again, if you would like to ask a question, please press star one now. We can now take the next question from Mikhail Futain from the Commercial Bank of Qatar. Yeah. Hi, sir. Thanks for the excellent results that you have got. I just want one question on your mothballing facilities, which you did in 2020. Given the excellent better prices that you are realizing and given the product mix is now shifting out of Qatar, overall, we could be seeing prices still prevailing given the last few weeks, do you see that you could increase your capacity in your steel segment in the coming year, 2022? Thanks. It's on continuous review. While we mothball a good part of the steel facilities, the intention is, of course, at the time to stop the bleeding and make sure that the steel contributes positively to the group without having that negative net back from international sales. The domestic and regional sales, I think with current capacity is reasonable. We continuously monitor whatever demand we see. We expect that there will be demand coming in some parts of the regional markets. However, any decision would require to be supported by a midterm view, strong midterm view on steel demand. Okay. The sales so far year to date were not only done in the region. We've sold a good portion as well in some parts of Asia. We've done jurisdictions like Singapore and others. I would not get carried away by the quantities that are sold, assuming that it's all domestic or regional. Okay. Just a follow-up question on your CapEx, sir. Just wanted to know, given the fact that 2022, also you're not going to be seeing an increase in CapEx and going forward. Do we, again, just coming back to the point on dividend, do we see that dividends payout rate will be seeing an increase, given the excellent results likely to be seeing in 2021? I'd go back and say it's difficult for me to make a statement on dividends, trust me, if it was entirely left to me, I'd rather pay the whole lot to you guys. It would really be dependent on what we see in terms of capital expenditure over the year. It would be very reliant as well on the price assumptions that we have for our basket of products in 2022 and beyond. As you'd appreciate, we'd always want to have a consistent dividend to be paid to our shareholders while we make sure that we keep a good buffer for any potential CapEx, whether that's maintenance related or anything that we may see in the pipeline in terms of investments. That, the board is in a better position to make that decision, and would be made early next year once our results have been finalized for this year, and while we have an outlook for the future. An updated, refreshed outlook for the future. Thank you. Thank you. Thank you, sir. Thanks. I appreciate your feedback. One final reminder, that is star one to ask a question. It appears there are no further questions at this time. I'd like to now turn the call back to your host for any additional or closing remarks. Hi, this is Bobby Sarkar again from QNBFS. If we have no further questions on the line, we can end the call for today. I wanted to thank Mohammed, Abdulla, Riaz for taking the time and answering our questions, and we will pick this up next quarter. Thank you very much. Thank you all. Thanks for joining. Thanks a lot. This concludes today's call. Thank you for your participation. You may now disconnect.