Good day. Welcome to the Mesaieed Petrochemical Holding Q3 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, Diana. Hi. Hello, everyone. This is Bobby Sarkar, Head of Research at QNB Financial Services. I wanted to welcome everyone to Mesaieed Petrochemical Holding third quarter and nine months 2021 results conference call. On this call from QatarEnergy's Privatized Companies Affairs group, we have Sami Mathlouthi, who is the Assistant Manager, Financial Operations, and we have Riaz Khan, who's the Head of Investor Relations and Communications. We will conduct this conference with management first, briefly reviewing the company's results, followed by Q&A. I would like to turn the call over now to Riaz. Riaz, please go ahead. Thank you, Bobby. Good afternoon. Thank you all for joining us. Hope you are all doing great. Before we go into the business and performance updates, I would like to mention that this call is purely for the investors of MPHC, and no media representatives should be attending this call. Moreover, please note that this call is subject to MPHC's disclaimer statements as detailed on slide number two of the IR deck. Moving on to the call on 25th October, MPHC published its reserves for the nine-month period ended 30th of September 2021. Today in this call, we'll go through these results and provide you an update on key financial and operational highlights of MPHC. We have structured our call as follows. At first, I will provide you with a quick insight on MPHC ownership structure, its competitive strengths, and overall governance structure by covering slides five till 10 and slides 40 and 41. Secondly, Mr. Sami will brief you on MPHC's key operational and financial performance metrics. Later, I will provide you with insights on segmental performance. Finally, we will open the floor for the Q&A session. To start with, as detailed on slide five of the IR deck, the ownership structure of MPHC comprises of QatarEnergy with approximately 65.4% stake, and the rest is in the free float held by various domestic and international corporates and individuals. QatarEnergy, being the main shareholder of MPHC, provides most of the head office functions through a service level agreement. The operations of MPHC's joint venture are independently managed by their respective board of directors along with the senior management team. In terms of competitive advantages, as detailed on slide eight, all of the MPHC's group companies are strategically placed in terms of competitively priced and assured feedstock supply under long-term arrangements, solid liquidity position with a strong cash flow generation capability, and presence of most reputed JV partners. Additionally, its partnership with Muntajat acts as a catalyst for its access to global markets. As detailed on slide 10, from competitive positioning perspective, MPHC ranks amongst top-tier companies in the regional chemical space across most of the matrices, and specifically leads the charts in terms of profitability matrix. In terms of governance structure of MPHC, you may refer to slides 40 and 41 of the IR deck, which covers various aspects of MPHC's code of corporate governance in detail. I will now hand over to Sami. Thank you, Riaz. Good afternoon, and thank you all for joining us. To start with, as detailed on slide 12, in terms of macroeconomic dynamics, the momentum carried from the later part of last year on the back of satisfactory vaccination drive and easing out of geographic lockdown in major markets led to sequential recovery in demand for petrochemicals and chlor-alkali products, and positively reflected on selling prices. Industry-wide supply constraints and the global logistical bottlenecks also played a part in keeping the product prices favorable for the downstream producers. MPHC joint venture benefited from these strong economic sentiments, which resulted in improved price levels and translated into an improved set of financial results as detailed on slide 14. For the nine-month period ended 30 September 2021, MPHC recorded net profit of QAR 1.4 billion as compared to QAR 330 million for the same period last year. Up by 335% as detailed on slide number 16. Group improved financial performance for the first nine months as of 2021 was largely attributable to improved product prices, which on average increased by 56% and translated into an increase of around QAR 1.1 billion in group net earnings as you can see on slide 17. Sales volumes were also furthered by 20%, mainly on account of improved production volumes and contributed by QAR 307 million positively to the current period profitability versus same period last year. The positive trajectory in product prices and improved volumes was slightly offset by increase in variable costs, which contributed by QAR 263 million negatively towards the current period earnings in comparison to the first nine months of 2020. Current period net earnings were positively impacted by favorable variance amounting to QAR 33 million in relation to inventory differentials due to lesser drawdowns in comparison to the same period last year. MPHC operations continue to remain robust and resilient, with total production for the period reaching 891,000 metric tons, up by 22% versus last year. As detailed on slide 15. The overall increase in production volumes was mainly attributed to improved plant operating rates during the current year, as major plant turnaround and preventive maintenance shutdowns were carried out in certain MPHC joint venture facilities during the nine months of last year. Moving on quarter-by-quarter performance, MPHC revenue improved by 5% versus second quarter of 2021, while net profit remained flat compared to the previous quarter. The key contributors towards a growth in revenue, mainly as a result of improved sales volumes, which increased by 8%. However, selling prices declined by 3% during Q3 2021 compared to quarter two 2021, mainly on account of supply side ease outs, particularly for the petrochemical products. On overall basis, our base case strategy will be to continue our focus on the strategic drivers of operational reliability in terms of continued improvement in efficiency and achieving cost optimization, which would enable the group to contain costs while making strategic investments for unlocking further growth potential. I will now hand over to Riaz to cover the segmental performance. Thank you, Sami. Starting with the petchem segment, as covered in slides 22-26. The performance of the segment bounced back with a net profit of QAR 1 billion, with an increase of 327% compared to the nine months of last year. This notable increase was primarily driven by improved product prices, which increased by 49% on account of improved macroeconomic dynamics, coupled with supply constraints. Sales volumes also increased by 17% compared to the same period of last year, against a backdrop of higher operating days in the current period. The growth in product prices, coupled with sales volumes, led to an overall rise in revenue by 75% within the segment to reach QAR 2.1 billion for the current period. Production volumes increased by 21% versus the same period of last year, as the segment had planned periodic turnaround of Q-Chem II facilities during Q1 of 2020, which affected the overall operating rates for the last year. In terms of segment revenue by geography, as detailed on slide 25, Asia remains a main market for the segment, along with Indian subcontinent and Europe. Moving on to the chlor-alkali segment, as detailed on slides 27 till 31. The segmental performance recorded a significant recovery with a net profit of QAR 418 million, compared to a net profit of QAR 42 million reported for the first nine months of 2020. This notable growth was primarily driven by significant improvement in blended average selling prices, which increased by 85%, complemented by renewed product demand and supply side shortages. Sales volumes also increased by 11% compared to the same period of last year, against the backdrop of better utilization rates in the current period versus last year. Growth in product prices, coupled with sales volumes, led to an overall increase in revenue by 132% within the segment to reach QAR 874 million for the current period. Production volumes rose by 24% versus the same period last year, as the segment had more planned periodic shutdowns during quarter one of 2020. In terms of segment revenue by geography, as detailed on slide 30, Indian subcontinent remains a main market for this segment. I think we can open the floor for the Q&A session. Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. Once again, that is star one if you wish to ask a question. It appears there are no questions for now. Once again, that is star one if you wish to ask a question. We just got one question in from Leszek Baranski with Millennium. Please go ahead. Your line is open. Thank you very much for the conference call. Let me start maybe with the first question. I've got one or two additional questions as well. Yeah, if you look at all these news flow about logistical problems that even plastic producers potentially could have when delivering plastic to Asia or to Europe. Do you see any difficulties in this field or not much? Based on the latest results that we have until Q3 2021, we are seeing those issues, but we haven't been affected. We have good, let's say, good contribution and good support from Muntajat. Who are dealing with the sales and delivery of our products. We don't see even in the future those kind of impacts that will affect us. Okay. The second question refers to big discrepancy in prices between Europe and Asia. Basically European market, including even Turkey, they offer much higher prices, I guess. Are you able to use this opportunity and sell more into Turkey or Europe, or you keep selling to your standard client in Asia? I think we are majorly looking for the best outcome. We are looking for the best net prices, netbacks, and that's the strategy that we have. We have our partners dealing with those kind of sales. Our objective is always to look for the best for our shareholders. Okay, thank you very much. Another question referring to PVC and byproducts when you are producing PVC. Mesaieed has got quite visible exposure to this petrochemical chain. My question is, because this chain was quite profitable recently and probably still is, do you see this to continue going forward? Yeah, Leszek, first thing to clarify in terms of the production which we are doing, it's VCM which we are producing, which is a precursor to or acts like a feedstock to the PVC. In terms of the overall market dynamics, PVC for the next at least two quarters with the current constraints in the market, not only from China but also from Europe and thanks to this energy price trajectories as well as power rationing measures in China. We are expecting a positive trajectory or an upbeat in the prices hopefully with the current market dynamics. I cannot comment on exact pricing levels which it will reach. From overall what we see from the market consensus and from the experts which we hear, this is what the price trajectories looks like. Sitting now, right now here and estimating about how the price trajectories will move further down the line in midterm range, it will be very difficult to say because there is a lot of variables in the market, a lot of demand and supply variables in the market, I would say. On a short-term basis, next two, three, four months, five months down the line, it looks positive. In terms of exact percentile, exact pricing, exact levels, it is difficult to say because that is not something which is our policy. We always caveat ourselves by referring what the market says. This is what the market is saying, this is what the consensus towards a short-term outlook for the product. Understood. Yeah, it's very clear. I was asking about finance, you answered it very well. Another question is, you've got sister company, Industries Qatar. In case of Industries Qatar, the company started already to buy minority shares in subsidiaries. Basically, that's the way how to deploy cash. In case of Mesaieed, current macro environment is positive, dividends are not very substantial, and there is cash pile building on the company's balance sheet. What's the strategy for Mesaieed? Is it similar to Industries Qatar or it will be something different? For example, I know much higher dividend. Well, different company, they have different kind of strategies. We are not following IQ, it's two separate companies. Every company has its board, which is different and taking totally different strategic decisions. At the moment, we don't have anything on the pipeline. In terms of acquisition of minority shares, we are working with under joint ventures with our partners so far. The working with the partners is very good. We are in a win-win position, and which benefited the shareholder of MPHC in general. So far, we have distributed around QAR 6.8 billion dividend, which our dividend payout is ranging from 71%-81%. Last year the dividend payout was around 94%, which was exceptional due to the lower net profits. The company will try to manage the cash in the benefits of the shareholders. Either through distribution or looking for opportunities where the board believes that those opportunities will add value to the shareholders. Without taking a huge risks, but at the same time, we try to work in the benefit of our shareholders. Okay, understood. Maybe the last question. Most recently, there were very big changes in feedstock prices globally. Most people believe it's very temporary because of sudden undersupply of gas here or there globally. Should we expect that your formulas in Qatar, they should stay stable as they used to be? Because these formulas are for years or decades, not for months or quarters. Thank you for the question again. Looking back to our EBITDA margins, and especially, you will see that it's increasing, starting from Q1 2020, from 29%-58%. It's despite the increase that we have seen in the feedstock. Until Q3 2021, you will see in the bridge analysis that there is a negative impact coming from feedstock, which is in line with the increase in feedstock prices. We don't believe at the moment that the formulas will change. Those formulas are regulated by a joint venture agreement between the shareholders and between QatarEnergy. We believe those formulas take into consideration any variable increase in the market, which is taken into consideration in those indexations. We believe that we are trying to keep everything green where we can control our EBITDA margin and we can make profits for our shareholders. Here we just need to mention that in QVC, part of the feedstock is bought from external parties, and this part is representing around 25%-30% of the feedstock that is consumed at QVC. This will be basically variable and depending on the market condition and on the availability of those feedstocks on the market. Okay. Thank you very much. Thank you. We will now take the next question from Shabbir Karwala with Al Rayan Investment. Please go ahead. Your line is open. Thank you. Gentlemen, this is Shabbir from Al Rayan Investment. Do you have any planned outages for the remaining part of the year in full Q? Thank you, Shabbir, for the question. Yes, for Q4 2021, we have a big shutdown in QVC, that's around 90 days. The shutdown has already started, and this was a planned shutdown. It's communicated already to the market, so in our previous press releases. That's 90 days for QVC. We don't expect any shutdown for Q-Chem and Q-Chem II. If you look at the shutdown during until Q3 2021, you will see that the operating rates has increased a lot compared to last year, where we have only an average 15 days of shutdowns compared to more than 115 days last year. When is the shutdown going to be completed? It has already started, so beginning of October, and it will be completed by end of December. End of December. Okay. The entire quarter. Yes. During this period that there's a shutdown, do you have enough inventory for sales, or you not build any inventory, or inventory is less? Well, with the rates of sales that we have, you will see that most of the production is sold. We don't have a huge inventory at QVC level. The inventory that we have built, they're not enough for three months sales. Okay. Basically nothing will be sold in this quarter or? Yes 50% of what is. It's small quantity that is existing in the stock, but very minimal. Okay. The other question is, I lost my trail of thought. Yeah, sorry. Color the outlook for caustic soda. Caustic soda is The prices have jumped significantly. Could you give us some color on how do you see the pricing for this product going forward? Yeah. Thank you, Shabbir. Riaz here. Basically on the caustic soda, again, I'll caveat myself, this is a market consensus. It will be very difficult to comment anything from our side, which is not the policy or which has not been the policy historically even. Caustic soda, again, the supply-demand dynamics, it's very positive and it is supporting the prices. Supply remains very short. Demand is on a higher side. Caustic soda, as you are aware, almost like at very high level at the global scale, 30%-40% of caustic soda is used in alumina production. The pricings are a bit closely linked to alumina and then aluminum trajectories, and which is again very positive on the aluminum front. The rest is basically in the paper industry, which is predominantly linked to the office usage as well as in the schools and different areas. That is again, very strong. The demand is strong from that perspective because most of the economies are coming out of those lockdowns throughout the year and have remained open as unlike last year. The price trajectories for next two quarters are expected to be positive, with supply remained constrained. As far as exact numbers and exact percentiles and exact references from our pricing perspective, that is something which is not the policy where we caveat ourselves. This is again a market consensus, and this is what market thinks. Okay. Thank you. What is the current price of caustic? Is it still QAR 350? We can comment until Q3 2021. Basically we have seen a huge increase. Okay between Q1 2021 and Q3 2021 from QAR 196 to QAR 350. The last question is 31. As Riaz mentioned, I think the prices are still stable now and comparable to the latest prices that we have seen end of Q3 2021. We cannot comment on the future. Okay, thank you. My last question is, I know it's taken a lot of time, just on the QVC that you said will be shut down, it basically produces VCM and caustic soda, right? The volumes for both of these products will be offline, right? Yes. Okay. Sounds good. All right. Thank you. Thank you. It appears there are no further questions at this time, so I would like to turn the conference back to our speakers for any additional or closing remarks. Thank you, Diana. This is Bobby again from QNB FS. If there are no further questions, we can end the call for today. I want to thank Sami, I want to thank Riaz for taking the time to answer investors' questions, and we'll pick it up next quarter. Thank you very much. Thank you, everyone. Thank you. Thank you all. Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.