Good day. Welcome to the Mesaieed Petrochemical Holding Company second quarter 2022 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. Okay. Thank you, Sergei. Hi. Hello, everyone. This is Bobby Sarkar, Head of Research at QNB Financial Services. I want to welcome everyone to Mesaieed Petrochemical Holding second quarter fiscal 2022 results conference call. On this call from QatarEnergy's Privatized Companies Affairs Group, we have Mohammed Al-Sulaiti, who is the Manager of Privatized Companies Affairs, Sami Mathlouthi, who is Assistant Manager in Financial Operations, Rashed Al Mohannadi, who is a Senior Financial Management Analyst, and Riaz Khan, who is the Investor Relations Officer. We will conduct this conference with management first reviewing the company's results, followed by a 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. No media representatives should be attending this call. Moreover, 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 the tenth of August, MPHC published its results for the six-months period ended 30 of June 2022. Today in this call, we will 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 MPHC's ownership structure, competitive strengths, and overall governance structure by covering slides five till 10 and slides 40 and 41. Secondly, Sami will brief you on MPHC's key operational and financial performance metrics. Later, I will provide you with insights on the segmental performance. Finally, we will open the floor for the Q&A session. To start with, as detailed on slide number five of the IR deck, the ownership structure of MPHC comprises of QatarEnergy with approximately 65.4% stake. 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 function through a service level agreement. The operations of MPHC's joint ventures are independently managed by the respective board of directors, along with the senior management team. In terms of competitive strengths, as detailed on slide number 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 the global markets. As detailed on slide 10, from competitive positioning perspective, MPHC ranks among top-tier companies in the regional chemical space across most of the matrices and specifically leads the charts in terms of profitability margins. 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. Starting with macroeconomic environment, as detailed on slide 12, remained uneven during the first half of 2022, where demand for certain downstream products slightly inched downward, mainly due to China COVID-linked lockdowns and cautious approach from buyers. On the other hand, supply side was affected by the Russian-Ukraine conflict, enforcing sharp rise in energy prices, challenging plant economics, specifically for the European producers. On an overall basis, commodity prices were essentially balanced during first quarter of 2022, except for the LAOs and caustic soda, where strength was noted on the back of elevated end product prices. During second quarter of 2022, despite uncertainties over recessionary fears, prices slightly improved on the back of persistent high energy prices and supply side constraints. Price trajectories on a year-on-year basis remained elevated, underpinned by better economic activity, resilient consumer spending, higher industrial output, robust GDP growth, and limited supply. For the six-month period under thirtieth of June 2022, MPHC recorded a net profit of QAR 1 billion, up by 14% versus the same period of last year, as detailed on slide number 16. The group improved financial performance for the current period was largely attributable to improved product prices, which on average increased by 18% and translated into an increase of QAR 324 million in group's net earnings, as you can see on slide 17. On the contrary, sales volumes declined by 7% versus same period last year, mainly driven by lowered plant operating rates, a mild large-scale turnaround carried at Q-Chem facilities during the current period. Decline in sales volumes translated into a decrease of 134 million QAR in MPHC net earnings. On the operational performance, MPHC operations continue to remain robust and resilient, with total production for the year reaching 548,000 metric tons. Current period production volumes declined by 7% versus first half of 2021, which is mainly due to large scale turnaround carried out at Q-Chem's facilities. Moving on to quarter-over-quarter performance, MPHC revenue inched higher by 17%, while net profit increased by 34%. Key contributors towards this improvement in revenue and net earnings were mainly linked to better sales volumes, which increased by 13%, and higher plant operating rates. Selling prices also increased during the second quarter of 2022, with a growth of 4% noted compared to the first quarter. On the back of persistently higher energy prices and supply side constraints, despite recent demand related concerns. 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 will enable the group to certain costs while making strategic investment 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 till 26. Here, the petrochemical segment reported a net profit of 665 million QAR for the first half of 2022, up by 2% versus the same period of last year. This marginal increase in profitability was primarily driven by marginal growth in segmental revenue, which increased by 1%, as higher selling prices were mainly offset by lowered sales volumes. Segmental sales volumes declined by 12% on a year-over-year basis as the segment carried out a large scale turnaround at the Q-Chem facilities during first quarter of 2022, and also affected segment's production volumes, which declined by 13%. On the contrary, product prices improved by 14% and offset the negative impacts relating to the lowered sales volumes to an extent. Selling prices improved mainly on account of continued momentum from positive macro drivers carried forward from the latter part of the last year. In terms of segment revenue by geography, as detailed on slide 25, Asia remains the main market for the segment, along with Indian subcontinent and Europe. Moving on to the Chlor-alkali segment, as detailed on slide 27 till 31. Chlor-alkali segment reported a net profit of 356 million QAR for the first half of 2022, increased significantly by 41% compared to the same period of last year. This notable growth was primarily driven by significant improvement in blended average selling prices, which increased by 32% versus the first half of 2021, complemented by strength from end product industries. Sales volumes remained flat compared to the first half of 2021. On overall basis, revenue grew by 32% within the segment, while the production volumes marginally rose by 2% versus the first half of 2021. In terms of segment revenue by geography, as detailed on slide 30, Indian subcontinent remains the main market for this segment. We will open the floor for the Q&A session. Thank you. Ladies and gentlemen, if you wish to ask a question at this time, please do so by pressing star one on your telephone keypad. Please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. Again, please press star one to ask your question. Our first question comes from Nihil Putane from CBFS. Please go ahead. Hi. Good afternoon, sir. Very good set of results for the second quarter. My question follows on caustic soda price trend, actually. We have seen of all your price trend, which you have shown in the graph, caustic soda has shown resilience in terms of following other product prices. Do you see this trend continuing as compared to first half 2022, much better in third and fourth quarter? If yes, why? Also, any idea in terms of any plant shutdowns during the second half of 2022 for all your products. The third question is got to do with your overall utilization rates for your HDPE plant. It looks like, yes, you have come back in terms of after turnaround, but still in terms of capacity utilization, it has fallen short of what I believe was there during 2021 in terms of utilization, which was around 115%-120%. Do we see again going back to that particular levels in the third and the fourth quarter? Thank you. Thank you. In terms of caustic soda, even across the board, the overall commodity line or the product line which we have, I think going forward, there are some positives and there are some negatives which we always have to take care. There is the Chinese market, which is again the biggest buyer of the commodities, is now coming back online slowly. Presumably they'll be fully online in September, October. There could be upside on that. In terms of higher interest rates and recessionary fears, that trend is also affecting the markets. That is something which we have to take care. Especially, with these recessionary fears and hawkish interest rates, the US dollar is becoming stronger. That is affecting the developing economies, predominantly the South Asians as well as the South Americans. Those with a very strong dollar, that is affecting their buying power. That is, again, affecting the demand. On the geopolitics side, we have the continued pressures on the markets from the Russian and the Ukraine war. That is, again, which is something which is like we are talking in unknown territories, how these things will resolve and how the markets will get the benefit from that. As of now, we stand with this Russian-Ukraine war. EU is getting affected significantly with very high energy prices. Given the very high energy price trends, Middle Eastern buyers on the other side are getting better set in terms of better spreads and better profitability with a very lower side of it. We are sitting on the lower side of the cost curve. These are the key themes which one needs to take care when assessing how the price trends will work. As of now, we stand maybe almost 45 days since, like, 30th of June, since the cutoff date. The trend specifically on the caustic soda has remained balanced to bearish, I would say, as per the markets. Going forward in the rest of the year, we need to wait and see how these key themes, which I just mentioned, evolve and how the key themes will look like. In terms of the rest of the two questions, I will hand over to Mr. Sami to brief you about those. I will start with the first part of the question, which is the plant shutdown. As you know, during the first quarter, Q-Chem had the largest turnaround in the history of the two companies, which entails around 39 days of turnaround. This has affected the production levels and utilization during the first half of 2022. Luckily, we didn't have any issue with the turnaround. Everything went as planned. In terms of budget, in terms of the man power, everything was planned. We are not expecting any plan turnarounds for the second half year for the petrochemicals and the Chlor-alkali. For the Chlor-alkali, we have normal plant shutdowns, which is on the average of two days or one day and a half per month. In total, it's around 27 days per year, and those days are spread on monthly basis. It will not affect the normal running of business because those are yearly plant shutdowns for the Chlor-alkali facilities. We are not expecting any big turnaround for the second half of 2022. The next big turnaround that we are planning will be during the year 2026, relating to Q-Chem II, which had its turnaround in 2020. That's the first part of the question. In terms of utilization in the petrochemical facilities, I think you can see that from the graph in Slide 18. The utilization has increased in Q2 2022 to 109%, compared to 80% in Q1 2021. This had a good impact. It's around 37% increase in terms of production. Yes, in some quarters, we reached to the 116 levels, I think we believe 109%, it's still higher compared to the normal utilization rates. We will do our best during the second half year to reach the highest levels. We believe at 109% and 110% are good utilization rates for the petrochemical facilities. Okay. Yeah. Thank you. I think quite detailed mentioned about all this. Just one quick question in terms of understanding of the utilization rates which the company provides and which is being calculated. That is quite an obvious difference. Maybe I think we can have a call, I mean, separate call on this. Thank you. Thanks for the presentation. Thanks for the questions, sir. Thank you. Answers. You can mention that. Excuse me. We can have another call in terms of this utilization, but I think there is a big difference between the nameplate capacity. That's the capacity that the production facility has. The reported capacity, it's based on what the companies are able to achieve. We can have another call in detail to explain this. Yeah. Wonderful. Thank you. Thank you for your detailed answers, sir. Thank you. Our next question comes from Jay Pasunuri from NBK Capital. Hey, thanks a lot for taking my call, and congratulations on good set of numbers. Can you please remind me the demand drivers for Chlor-alkali products such as the caustic soda, VCM, and EDC? What is the drive for the product prices going up or down? Any specific industries, products, end products? If you can remind me that would be great. Caustic soda is basically, if you see, it's predominantly used to an extent in the alumina production when you convert the bauxite into alumina. That's where the caustic soda gets used. Over and above, it's one of the key ingredients as part of the detergent industry. The key drivers, when you go and assess the markets, you have to look into the end product prices, because these are the end users, or they act as a precursor to these products. When we talk about the EDCs and the VCMs, they are predominantly the precursor to the PVC. PVC is a big industry. That demand is basically linked to wherever the PVC gets consumed, predominantly in the construction sectors. These are how I can tell you from a reference perspective for the EDCs and the VCMs. I think PVC as well as the construction and those kinds of drivers. In terms of caustics, predominantly it's the aluminum, alumina industry to an extent, as well as the detergents, which is generic retail consumptions. Okay, great. Thank you. As a reminder, to ask a question, please signal by pressing star one. Our next question comes from Hisham Kabbani from ADIA. Please go ahead. Hello. Just a quick one on the Chlor-alkali division. I remember there was a project for PVC. Just wondering what's the latest on there. How much of CapEx do you expect to spend on that? Will that be funded by the subsidiary or will it entail a capital injection from the Mesaieed level? Just some color on that. Thank you. Sure. Thank you so much for the question. The PVC project, I think we have announced already this during the second quarter of 2022. This would be under QVC. The project cost will be around $239 million. That's the project in itself, million US dollar. With completion by mid 2025. At the moment, as you can see in the financial statements of MPHC, we have already contributed by around our portion of $20 million. It's around $11.5 million, and this has been registered as advance to the PVC project. We will continue to contribute by our portions of the $239 million, and this will be registered as advance in the beginning. As you know, we are using the equity method of accounting, at this stage, we cannot use this as part of our investment in joint venture. This will be done lately. The capacity of the PVC facility will be around 350,000 metric tons. This will be based on basically linked to our VCM production. It will have a great benefit for QVC in itself and for MPHC shareholders as the transportation of VCM is very risky, so compared to its logistics. It will help as well to grow the PVC business locally and in the region as well. We believe that it will have a positive impact on MPHC shareholders. Thank you. Basically, you're not expected to fund that through debt just by capital injections? Or does QVC have the cash to take it on? No, no, it will be through MPHC. As I said, in the beginning, MPHC will fund that project based on its percentage of ownership, which is 55.2%. Okay. Thank you. Thank you. As there are no further questions in the queue, I'd like to hand the call back over to our speakers for any additional or closing remarks. Hi, this is Bobby Sarkar again. If there are no further questions, we can end the call for today. I want to thank Sami and Riaz for taking the time to answer investors' questions, and we will pick this up again next quarter. Thank you so much. Thank you so much. Thank you, everyone. Thank you. This concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.