Ladies and gentlemen, thank you for standing by. Hello, welcome to Mesaieed Petrochemical Holding Company. All lines have been placed on mute without any background noise. I would now like to turn the conference over to our moderator, Fabian. Please go ahead.
Thank you, Dustin. A good afternoon to you all, and thank you for joining us for Mesaieed Petrochemical Holding 4Q and FY 2025 Earnings Conference Call. On today's call from QatarEnergy Privatized Companies Affairs, we have Abdulla Yaqoob Al-Hay, who is the Manager of Privatized Companies Affairs. We have Rashid Hamad Al-Mohannadi, the Head of Investor Relations and Communications. We also have Sami Mathlouthi, Assistant Manager, Financial Operations. As usual, our call will have the speakers give us the numbers in the presentation first, then immediately afterwards, we'll have a Q&A session. I'll turn over the call to Rashid to begin. Over to you, sir. You can go ahead.
Thank you, Fabian. Good afternoon, and thank you all for joining us. Before we go into the business and performance updates, I would like to mention that this call is purely for investors of MPHC, and no media representatives should be attending this call. Kindly note that the MS Teams link is to display the IR deck on screen. In case you want to participate in the Q&A session, you must dial in through the telephone line on the phone provided as part of the invitation. Moreover, please note that this call is subject to MPHC disclaimer statement as detailed on slide number two of the IR deck. Now we can move on to the call. On Wednesday, 28th of January 2026, MPHC published its result for the year ended 31st December 2025.
Today in this call, we'll go through these results and provide you on the key operational and financial updates. Today in this call, along with me, I have Mr. Abdulla Yaqoob Al-Hay , manager for privatized companies affairs; Mr. Sami Mathlouthi, assistant manager for financial operations; and Mr. Saoud Ahmed, senior financial reporting analyst. We have structured our call as follows. At first, I will provide you a quick insight into MPHC ownership structure, its competitive strength, and overall governance structure by covering slides 5-10 and slide 42 and 41 of the IR deck. Secondly, Sami will brief you on the microenvironment updates, dividend proposal and brief you on MPHC financial and operational performance. Then Saoud will brief you on segmental performance. Then finally, we'll conclude the call with a Q&A session.
To start with, as detailed on slide number five of the IR deck, the ownership of MPHC structure comprises QatarEnergy with approximately 57.9% stake, and the rest is in the free float held by various domestic and international corporate individuals. QatarEnergy, being the main shareholder of MPHC, provides most of the head office function through our service level agreement. The operation 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 slide number eight, all of the MPHC group companies are strategically placed in terms of competitively priced and assured feedstock supply and the long-term arrangement, solid liquidity position with strong cash generation, presence of the most reputable joint venture partners. Additionally, its partnership with QatarEnergy Marketing acts as a catalyst for its global access.
As detailed on slide number 10 from competitive position and perspective, MPHC ranks among the top-tier companies in the regional chemical space across most of the matrices and specifically lead the charge in terms of profitability margins. In terms of governance structure of MPHC, you may refer to slide number 41 and 42 of the IR deck, which cover various aspects of MPHC code of corporate governance in more detail. Now I will hand over the call to Mr. Sami.
Thank you, Rashid. Good afternoon. Thank you all for joining. Let me begin with a quick look at the macroeconomic environment. The global petchem industry went through a very difficult year in 2025. The main challenges were too much supply, weak demand, and increasing regulatory and sustainability requirements. Large investments made after the pandemic added new capacity faster than demand could grow. As a result, production rates for key products stayed very low, putting pressures on prices and profits. Many producers responded by cutting production, shutting down plants, or closing high-cost assets. Demand recovery was slow and uneven, especially in construction and automotive sectors, while economic uncertainty and price volatility added further pressure.
Against this macroeconomic environment, which affected MPHC performance, the board proposes a dividend of QAR 0.016 per share for the second half of 2025, bringing the total annual dividend to QAR 0.042 per share. This represents 100% payout of net income, highlighting the company's ability to distribute all of its earnings despite market volatility and demonstrating its resilience. Comparing MPHC financial performance to 2025 versus the same period of last year, as referred to in slide 16, MPHC reported a net profit of QAR 533 million for the period under 31st of December 2025, which is down by 26% compared to last year. The decrease in profitability was primarily driven by lower average selling prices, which negatively impacted revenue. This price weakness was largely attributable to prevailing macroeconomic headwinds, softer global demand conditions, and overall market volatility.
The drop in group revenue was mainly linked to the decrease noted in average blended product prices, which declined by 10% compared to 2024. This translated into a negative price variance of QAR 216 million in MPHC current net earnings compared to last year. Subdued product demand amid macroeconomic uncertainties resulted in lower commodity prices. On the other hand, blended sales volumes increased by 4% compared to 2024, mainly driven by higher sales volumes reported by the Chlor-Alkali segment. This positive movement in blended sales volumes translated into an increase of QAR 51 million in MPHC 2025 net earnings compared to last year. EBITDA for the current year noted a decline versus 2024, mainly due to lower revenues. Furthermore, EBITDA margins narrowed during 2025, reflecting the impact of reduced average selling prices across both segments. However, the EBITDA margin declined marginally from 42% - 38% in the current year.
These factors collectively contributed to the decreased financial performance observed in year ending 31st of December 2025. Regarding the financial position as shown on slide 15, liquidity remained robust, with cash and bank balances standing at QAR 3.5 billion as of 31st of December 2025. However, these balances inclined slightly during the period, despite the distribution of final dividend for the year 2024, the interim dividend for first half 2025, and MPHC financial contributions towards the PVC project. This increase was also supported by robust cash flow generation throughout the current period. I will now hand over to Saoud to cover segmental review.
Thank you, Sami. Moving to the segmental review, we will start with the petrochemical segment as covered in slides 21 to 25. The segment recorded a net profit of QAR 494 million, lower than last year due to difficult market conditions. Global polyethylene markets remained oversupplied with weak demand, putting pressure on prices and margins. Sales volume were mostly flat year-on-year as maintenance activities and scheduled turnaround at Q-Chem offset the impact of last year's shutdowns. While strong operational performance and cost discipline helped limit the impact. Softer prices, flat volumes, and maintenance downtime weighted on overall profitability during the period. On a quarter-on-quarter basis, segmental profits declined by 88%, reaching QAR 19 million in Q4 2025. This was mainly due to a 6% drop in selling prices, reflected a soft demand for high-density polyethylene, and oversupply in global markets.
Additionally, a 12% decrease in sales volume were linked to planned major turnarounds in Q-Chem facilities, impacting production. Combined with weakening polyethylene market demand and contributed to compress the segment quarterly margins. Moving on to the Chlor-Alkali segment, as detailed on slides 26 to 30. The Chlor-Alkali segment reported a net loss of QAR 41 million for the year ended 31st of December 2025, representing a significant decline of 215% compared to last year. This downturn was primarily driven by 14% driven drops in average selling prices, which fell to levels last seen during the peak of the COVID-19 pandemic. Price weakness was worsened by persistent macroeconomic pressures, slow downstream demand, and reduced construction and industrial activities. Elevated global inventory levels and declining crude prices further damping market outlooks. Sales volume inclined by 9%, in line with higher production supported by improved plant availability and strong operational performance.
Severe market challenges pushed the segment into a net loss position, further compressing margins. On a quarter-on-quarter basis, the segment posted a third consecutive net loss of QAR 27 million in Q4 2025 compared to Q3 2025. The downward trend intensified, primarily reflecting continued margin compression despite a modest sequential improvement in both sales volume and average selling prices. While prices showed signs of stabilization during the quarter, they remained near their lowest level since the COVID-19 pandemic, limiting revenue recovery and adversely impacting profitability. I will now hand over to Rashid.
Thank you, Sami. Thank you, Saoud, for presenting the presentation to us. I think it's the time to start the Q&A session.
Thank you. Before we start the Q&A session, if you'd like to ask a question, please press star and the number one on your telephone keypad to enter the queue. Again, that is star and the number one on your telephone keypad to enter the queue. We will take our first question from Waleed Jimma from Insight Capital Management. Please go ahead.
Hello. Good afternoon, thank you for taking my question. Just wanted to ask you if there were any one-off expenses that were recorded during the quarter that we should be aware of. If you could just help quantify if there were any and in which segment were they booked. Thank you.
In terms of one-off, accounting-wise, we are not aware of any one-offs, but what happened in the petrochemical segment that drove the profitability decline is basically that the petrochemical segment went into a plant turnaround that happens every four to five years, and it's alternating. The last one we had was in one of the Q-chem. We have Q-chem I and Q-chem II. Last month we had, it was in 2021, and this one is happening in 2026, and the next one will happen in, I think, 2031. This is a major turnaround. The plant would be under shutdown for 45 to 60 days off. That takes away a lot of production, takes away a lot of potential sales volume. It's coupled with the decreased trend in terms of polyethylene prices. We've noticed that the profitability for Q4 was heavily impacted.
This is the one-offs that I can think of in terms of the indicator that impacted the profitability during the quarter.
Okay. Very clear. Just one more from my end, if possible. Where do you expect margins to trend into next quarter?
Basically, right now we have the petrochemical segment. I think they went fully back online. Right now we expect based on the prices. You need to follow the SDB prices and the way they evolve. This year, I think SDB price has been among one of the commodity that was worst impacted compared to others. However, the demand in future growth in terms of demand on automotive sector, demand from construction sector, we'll see a growth as well in our profitability. The impact on the production side is already concluded during this quarter. Next quarter, inshallah, you'll have the full capacity back online for the Q-chem. Hopefully the prices. You need to build your projection around the prices to see how the performance will underpin in the next quarter.
The other segment, which is Chlor-Alkali, it's been suffering for the last three quarters. The Chlor-Alkali specifically has been under a lot of constraints. Right now we have the PVC project. The PVC project already initiated at the end of this year, and that will take all of your production of EDC back or VCM, EDC to PVC. Once we have the project integrated going forward in terms of ramping up, et cetera, you'll start to see more of a diversion in the profitability for QVC. Going forward, [Non-English content], we hope that QVC will perform better. We hope that petrochemical prices will, [Non-English content] , take better footing into next year. All it will be driven by how we perform in terms of our production, et cetera.
I think QVC this year, they have recorded one of the best years in terms of production numbers. This year was the best year in terms of the uptime for production. I think going forward, the focus will be on petrochemical and how it will evolve in terms of pricing.
Clear. Thank you very much.
Thank you. Our next question comes from the line of Rabih Moussa from QIC Asset Management. Please go ahead.
Hi. Thanks for the call, and thank you for taking my question. Two questions from my side. Can you provide an update on the status of the suspension PVC plan? When do you expect to be fully operational and the estimated utilization rates for year 2026 and 2027? Are there any planned shutdowns for year 2026? If so, can you share some details on the days, assets, and how much production will be offline? My final question is regarding the new salt project. When will construction start, and what is the timeline do you expect on it? This QAR 290 million of CapEx—this is the total CapEx for the project, correct?
I will start with the first one in terms of the PVC project capacity and the integration of the PVC plant onto the VCM and the EDC. By the end of this year, 2025, we started the production of the PVC, and the first shipment has been already done. That's a testing shipment. During next year, we expect that the company will ramp up the production slowly until the full integration, probably by the end of next year or by 2027. We are still in the testing phase. Testing the quality of the products, testing the integration of the equipment. Then we will update you once we get more clarity from the operating team in terms of the capacity introduction. For 2026, for the petchem, there is no planned turnarounds during 2026.
As Rashid mentioned during the first question, that we had already one of the companies, one for plant shutdown last year. The next one will be planned on 2028. For Q-chem I, then for Q-chem II, the unplanned shutdown took place during Q4 2025. The next one will be planned during 2030, 2031. For the petchem, we don't expect any planned shutdown. However, for the Chlor-Alkali segment, 2026, we normally have one planned shutdown that should be for around 30 days. Then normally we always plan one to two shutdowns per month for those plants, which will take probably the unavailability of the plant during the year 2026 for another 24 days. I think that's in terms of the shutdowns. For the salt project, we have already announced, I think, the cost of the project.
Again, that's still an initial, let's say, estimation of the project cost because we haven't yet arrived to the selection of the contractor and the selection of the, let's say, of the project itself. The total cost of the project will be around QAR 1 billion. That's the total cost. We announced that there are some restructure in terms of the shareholding of that project, where MPHC will be holding 60% and QIMC will be holding 40% of that project. We are still at the feasibility study and at the studies of that project from technology selection of contractors, selection of completion of the studies. We will announce any further development during the next phase.
Thank you. Our next question comes from the line of Kaushal Shah from DBAC. Please.
Yeah. Hi. Thank you for the opportunity. My question is regarding, can you clarify the nature of the finance income in Q-chem II asset? Any additional clarity would be grateful. My second question is, what is the price dynamic do you see for medium term? Considering all the effects and capacity closure and capacity rationalization, your thought would be very helpful. Thank you.
Can you repeat your first question?
Yeah. It's regarding the nature of finance income in Q-chem II.
You mean whether Q-chem II has financing?
Finance income in Q-chem II business. What is the nature of finance income?
Sorry, the question is not clear. Is it about the capacity, the plant shutdown that took place in Q-chem II, or something else?
No, no. My question is regarding the finance income in Q-chem II financials.
Yeah, there is no financial requirements.
Okay.
So if you—
Hello?
Yeah. The finance income, it's relating to a portion of tax that is due to be paid to MPHC. In total, there is an amount of QAR 671 million, which was standing at the books of Q-chem I and Q-chem II, and those are to be paid to MPHC. These are generating finance income on those fixed deposits. In addition to any available cash which is sitting at Q-chem II level, that will be generating some income at the books of Q-chem I and Q-chem II. Out of that, we take 49%, which is our shareholding in these companies.
Okay.
Yeah. For your second question, I'll take it. In term of how the forecast will underplay, as you know, the company doesn't give outlook, but based on what we've seen over from separate reports, that the prices for HDPE is linked to the supply, how much is their supplies in the market, and how much is the crude prices trading at. Currently, what we are seeing right now, crude is trading at $60-$70 per barrel, which makes the other, because petrochemical producer can either be producer-based on naphtha or based on ethane. When you have crude trading at lower of the curve, you start having more naphtha producers competing, lowering the floor for others in term of pricing. Going forward, if the crude price take a spike, then you would expect that the prices for pure ethylene will increase naturally with that.
Again, that will also be subject to the market dynamics, how the supply-demand arrival in each region. We have seen that China demand has been slow. However, over the second half of the year, China is gradually starting to consume more and more. It will all depend going forward how the markets will react and how the naphtha price and naphtha producer will start to compete against ethane producer, et cetera. It will all depend on the market dynamics and also the interest rate.
Thank you.
Thank you. Our next question comes from the line of Ejayan Al-ahbabi from Al Rayan Investment . Please go ahead.
[Non-English content] . Thank you, everyone. My question is, can you please help me understand what is the uplift of selling PVC as opposed to VCM?
You'll have two elements that will support the PVC. First, currently you're selling VCM, EDC. VCM and EDC is currently sold as a liquid form. Transportation of that product is quite hazardous. Also, you have concentration because few clients are taking those EDC, VCM. That's one element when it comes to VCM versus PVC. PVC is more of a solid product. You can transport it in containers. You can ship it together with polyethylene, and it's widely used in various application. PVC is used in variety of application, easier to ship. That's one benefit. Second benefit is the spread. Usually, you'll have a spread between EDC and PVC, and it moves from quarter to quarter. This spread is expected to cover your cost to basically produce PVC plus a margin. You're integrating your product further down the value chain.
The PVC currently in Qatar—there is not a single producer of PVC in Qatar. All the PVCs currently being used in Qatar are imported. After this project is up and running, you'll have a local source of PVC. Part of our production will cater for the local demand, and the surplus will be exported to international location and will be easier to ship. You can club it with other products during shipping, and even storage is easier. We expect there is some kind of a benefit from PVC.
Can you please share with us some color on the difference in the spread between the two products, kindly?
Basically currently we don't have it on the IR presentation. I think going forward next quarter we'll start to put the PVC prices in the market, and you'll see the trends going forward, how it will trade. From next quarter, [Non-English content], we'll add the PVC.
Yeah. At the moment it's ranging from $ 180-$ 200 per ton.
Okay. Thank you. Thank you very much. Thank you.
[inaudible].
Thank you. Our next question comes from the line of Lee Beswick from QNB. Please go ahead.
Hi. Thanks. I was just wondering if you can talk about caustic soda supply growth, particularly some of the supply growth in China, which is coming on at sort of a marginal cost of somewhere between QAR 200 and QAR 250. How do you think that sort of changed the market? If caustic soda prices sort of default to QAR 300 or below, is that level sustainable? Can you make money at that level, or would that require cost cutting or some other changes to make money at that level?
I mean, caustic soda market has been volatile for the last, I think, two years or so. It has been on and off depending on how aggressive China is in term of their project expansion plans. I think China has put a pause on certain project during, I think not last year, the year before, due to environment regulation aspect. I think going forward the market will have to adjust itself based on the cost of producers and how they produce. Of course, us as an MPHC, we always monitor our cost of production, and we make sure that whatever we produce is beneficiary for us. As I mentioned, right now we are venturing into PVC. We will continue to monitor the PVC trends going forward and whether it is beneficiary to the company. We also will continue to implement cost measures where it is needed, et cetera.
It's under the radar of the company and the management, and we are aware of the changes in the market.
Do you anticipate that you could be moving to a position where you are not at the low end of the cost curve and therefore your production is structurally challenged?
I mean, us and others are producing at similar levels. I think the majority of the market are suffering, not only us. I think a big portion of the market. Even Chinese producers, some of them are selling with net loss. The market going forward will have to adjust itself by either these lower or higher cost producers will have to either take a decision to shut down or there has to be a self-leveling of the market going forward. What I can comment on from the company prospect, that we are reviewing the cost thoroughly from standing point today and even going forward at the management level of the company. If we see that there are certain opportunities for cost management or cost cutting, we are implementing. All these aspects has already been looked after by the company.
Also, we are venturing into a new chapter right now whereby we are producing PVC. We'll see how above going forward, how the company will perform.
Okay. Thank you.
Thank you. Our next question comes from the line of Rabih Moussa from QIC Asset Management. Please go ahead.
Hi. Yeah, just a follow-up on the previous questions. For the PVC project, you expect full ramp-up by end of 2027, and for the shutdowns, the Chlor-Alkali segment, we have 30 days in 2026. Which quarter are the days?
Just to answer you on the first part, second part, Sami will answer you. In term of the QVC, right now we initiated the project. There is a testing period right now. We'll have clearer clarity going forward into Q1 to report to the market officially when the project is expected to be fully integrated and completed. I think you'll start to see right now quantities coming through in Q1 as PVC; gradually you'll start to realize more PVC going into more. The full integration timeline—we'll have to report it officially in the upcoming quarters. The project right now is in the testing phase. I think the second part for the question about the shutdown, Sami, can answer.
I think, as we said in the beginning, we allocate an average two days per month for the plant shutdown for QVC due to the plants itself. There is, as I said, 30 days of plant shutdown. That will be during Q4 2026.
Thank you. Thank you. That was very clear.
Thank you. We have no further questions on the queue. I will now turn the call back over to our moderator, Fabian, for closing remarks.
Thank you, Rashid. It's Fabian here. If there are no further questions on the line, it brings us to the end of our call today. Thank you for joining us, and special thanks to the management team for taking its time to update the market. Please do join us for future calls related to Mesaieed. Have a good afternoon.
Thank you all. Thank you, Fabian.
The meeting is now concluded. Thank you all for joining. You may now disconnect.