Hello everyone. Welcome to Mesaieed Petrochemical Holding conference call. Please note that this call is being recorded. Also, please note that there will be no question and answer session for today's session. Thank you. I would now like to hand the call over to Dana from QNB. Please go ahead.
Hello, everyone. This is Dana Al Sowaidi from QNB Financial Services. I would like to welcome everyone to Mesaieed Petrochemical Holding Company's first quarter 2026 financial results conference call. On this call from QatarEnergy's Privatized Companies Affairs, we have Abdulla Yaqoob Al-Hay, Manager, Rashid Hamad Al-Mohannadi, Head of Investor Relations and Communications, and Sami Mathlouthi, Assistant Manager of Financial Operations. We will conduct this conference call with the management reviewing the company's results. I will now turn the call over to Rashid. Please go ahead.
Thank you, Dana. Good afternoon. Thank you all for joining us. Before we go into the business and performance update, I would like to mention that this call is purely for investors of MPHC. No media representatives should be attending this call. Please note that this call is subject to MPHC disclaimer statement as detailed on slide number two of the IR deck. We can move to the call. On Thursday, 13th of April 2026, MPHC published its results for the three-month period ending 31st of March 2026. Today in this call, we will go over these results and provide you on key updates on financial and operational highlights. Today on this call along with me, I have Mr. Abdulla Al-Hay, Manager for Privatized Companies Affairs, and Mr. Sami Mathlouthi, Assistant Manager for Financial Operations. We have structured our call as follow.
First, I will provide you with a quick insight of MPHC ownership structure, its competitive strength. Overall governance structure. Sami will brief you on MPHC financial operation and operational performance. Finally, also, Sami will brief you on segmented performance. To start with, as detailed on the IR deck, the ownership structure of MPHC comprises of QatarEnergy with approximately 57.9% stake. The rest is in the free float held by various domestic and international corporates and individuals. QatarEnergy, being the main shareholders of MPHC, provide most of the head office function through a service level agreement. The operations of MPHC joint venture are independently managed by their respective Board of Directors along with senior management team.
In terms of the competitive advantages as detailed on the IR deck, all of the MPHC group companies are strategically placed in terms of competitively priced and assured feedstock supply under long-term arrangement, solid liquidity position with strong cash flow generation capability, and the presence of well-established joint venture partners. Additionally, its partnership with QatarEnergy Marketing acts as a catalyst for its access to the global market. In terms of the governance structure of MPHC, you may refer to the IR deck, which cover various aspects of MPHC Code of Corporate Governance in more details. I will now hand over to Sami. Over to you, Sami.
Thank you, Rashid. Good afternoon, everyone, and thank you for joining us. In line with MPHC previous announcement, the group implemented production suspensions and reductions for selected products. Accordingly, MPHC operational performance during this period declined, with overall production levels decreasing across both segments. The ongoing regional conflict further impacted overall operation conditions, contributing to heightened uncertainty, supply chain disruption, and volatility in energy and feedstock markets. These factors collectively weighed on production stability and performance during the current period. On a quarterly basis, production decreased in both operating segments. Moving on to financial performance, MPHC reported a net loss of QAR 1 million for the three-month period ending 31st of March 2026, reflecting a 101% decline compared to the same period of last year. The decrease in profitability was mostly driven by 7% lower average selling prices, which negatively impacted revenue.
This price weakness was largely attributable to prevailing macroeconomic headwinds, softer global demand conditions, overall market volatility, and the ongoing regional conflict. Consistent with the reduction in product sales prices, MPHC experiences lower sales volume during first quarter of 2026 by 27%, driven by the ongoing regional conflict, which affected the operational performance across both segments and consequently attributed to the overall decline. EBITDA for the period declined by 61% compared to first quarter 2025, largely due to weaker top-line performance. Margin compression was also observed in first quarter 2026, driven by lower average selling prices across both segments. MPHC's bottom line profitability reported a net loss compared to the previous quarter, mainly due to lower group revenue across both segments.
Decline in selling prices across both the petrochemical and chloralkali segments, together with lower sales volumes by 21% under pressure from external challenges linked to weaker macroeconomic conditions, resulted in margin compression during the period. The Petchem segment was primarily affected by subdued demand for high-density polyethylene products amid persistent global oversupply. At the same time, the chloralkali segment experiences weaker downstream demand driven by slower construction activity, reduced industrial consumption, and elevated inventory levels. Overall, the combined impact of revenue decline by 20% and margin compression led to a significant drop in quarterly profitability. Now moving to segmental performance and starting with Petchem segment. The petrochemical segment delivered a net profit of QAR 12 million for the current period, posting a 92% decline compared to the same period of last year.
Weaker operational performance characterized by lower production by 25% and sales volumes by 24% negatively impacted the overall performance. At the same time, commodity prices remained under downward pressure amid continued global oversupply, subdued demand in key end markets, and persistent macroeconomic uncertainty. These factors adversely affected margins during the period. On a sequential quarterly basis, segmental profitability declined by 33%, largely due to softer revenue by 17%, resulting from lower selling prices by 4% and reduced sales volumes by 13%. The weakness in pricing was driven by subdued demand for high-density polyethylene products amid continued global oversupply. The prior quarter was characterized by unusually lower production output due to the plant turnaround. Moving on to chloralkali segment.
The chloralkali segment reported a net loss of QAR 33 million for the first quarter of 2026, marking a sharp decline of 336% compared to the same period of last year. Performance was adversely affected by a continuous decline in average selling prices by 11%. Pricing pressure stems from ongoing macroeconomic headwinds, weak downstream demand, and a slowdown in construction and industrial activity. High global inventory levels alongside declining crude oil prices further darkened market sentiment. On a quarter-on-quarter base, the segment reported a net loss for the fourth consecutive quarter. In comparison to fourth quarter of 2025, the downward trend intensified during the period, driven primarily by a sharp contraction in sales volumes by 30%, while selling prices remained sequentially stable.
The pronounced drop in volumes led to a significant reduction in revenue by 29%, which in turn resulted in materially higher segment losses compared to the previous quarter and weighed heavily on the group overall performance. With that, we conclude our call. We would like to thank our investors for their continued trust and support, and we look forward to speaking with you again during the next earnings.
Ending today's call. You may now disconnect. Goodbye