Hello, and welcome to Mesaieed conference call. Please note that this call is being recorded. You'll have the opportunity to ask questions to our speakers later on during the Q&A session. If you'd like to ask a question by that time, please press star one on your telephone keypad. Thank you. Now I would like to hand the call over to Fabian. You may begin.
Thank you, Angela. Good afternoon to you all, and thank you for joining us for the Mesaieed Petrochemical Holding Company 1Q 2025 Financial Results Conference Call. On this call today from QatarEnergy Privatized Companies Affairs, we have Abdulla Yaqoob Al-Hay, who is the Manager of Privatized Companies Affairs, Sami Mathlouthi, Assistant Manager of Financial Operations, and Rashed Hamad Al-Mohannadi, Head of Investor Relations and Communications. As usual, we'll conduct the call with management first reviewing the company results, and then we'll have a Q&A session immediately afterwards. Let me turn over the call to Rashed to begin. Over to you, sir. Please go ahead.
Thank you, Fabian. Good afternoon, all, thank you 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 Microsoft 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 lines on the phone number 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. Moving on to the call, on Tuesday, 29th of April 2025, MPHC published its result for the three-month period end the 31st of March 2025.
Today in this call, we'll go through these results and provide you an update on key financial and operational highlights. Today in this call, along with me, I have Mr. Sami Mathlouthi, Assistant Manager for Financial Operations, and Saoud Ahmed, Senior Financial Management Analyst. We have structured our call as follows. At first, I'll provide you on a quick insight, on MPHC ownership structure, its competitive strengths, and overall governance structure by covering slide 5- 10 and slide 41 and 42. Secondly, Sami will brief you on the microenvironment updates and overall of the group results. That will be followed by Saoud to provide you with more insight into the segmental performance. Finally, we'll open the floor for the Q&A.
To start with, as detailed on slide number five of the IR deck, the ownership structure of MPHC compromises of QatarEnergy with approximately 57.9% 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, provide most of the head office function through a service level agreement. The operation of MPHC joint venture are independently managed by the respective board of directors along with senior management team. In term of the competitive strength, as detailed on slide number eight, all of the MPHC groups are strategically placed in term of competitively priced and assured feedstock supply under long-term agreement, solid liquidity position with a strong cash generation capability, and the presence of the most reputable JV partners.
Its partnership with QatarEnergy Marketing acts as a catalyst for its access to the global market. As detailed on slide 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 leading the chart in term of the profit margins. In term of the governance structure of MPHC, you may refer to slide 41 and 42 of the IR deck, which covers various aspects of MPHC code of corporate governance in detail. I will now hand over to Sami. Over to you, Sami.
Thank you, Rashed. Good afternoon, everyone, and thank you for joining us. The macroeconomic climate remained uncertain during the first quarter of 2025, influenced by several factors carried from the last year. Potential tariff tensions have increased market uncertainty and added complexity to the global economic landscape, potentially impacting consumers by affecting their purchasing power and overall economic stability. Overall, commodity prices for MPHC basket of products declined on a year-on-year basis. Following the significant high-price environment over the last two years, this decline was mainly due to a cautious approach from buyers amid macroeconomic headwinds, coupled with comparatively lower energy prices. Moving on to the results.
Comparing MPHC financial performance for Q1 2025 compared to the first quarter of 2024, as referred to slide 16, MPHC reported a net profit of QAR 186 million for the three-month period end the 31st of March 2025, down by 4% compared to the same period of last year. This decline in profitability was mainly linked to lower selling prices, partially offset by increase in sales volumes in both segments. The drop in group revenue was mainly linked to the decrease noted in average blended product price, which declined by 6% compared to last year. This translated into negative price variance of QAR 26 million in MPHC current net earnings compared to the same period of last year. Subdued product demand and macroeconomic uncertainties resulted in lowered commodity prices.
On the other hand, blended sales volumes increased by 4% compared to last year, mainly driven by high sales volumes reported by both segments. This positive movement in blended sales volumes translated into an increase of QAR 8 million in MPHC first quarter net earnings versus the same period of last year. EBITDA for the current period noted a decline versus first quarter of 2024, mainly due to lower revenue. In addition, the drop in average selling prices was partially offset by higher production and subsequent sales volumes within both segments, negatively impacting the group overall EBITDA. However, the EBITDA margin improved from 43% to 44% in the current quarter. These factors collectively contributed to the decreased financial performance observed in the three-month period under 31st of March 2025.
Overall, the financial results were impacted by lower earnings from the Petrochemical segment, partially offset by the Chlor-Alkali segment compared to the same period of last year. The overall performance of these two segments resulted in a net negative effect on the company overall results. Regarding the financial position as shown on slide number 15, liquidity remains robust with cash and bank balances standing at QAR 3.1 billion as of 31st of March 2025. The decline in cash and bank balances was mainly due to dividend payment for the second half interim dividend, in addition to the payment of MPHC portion in the financing of the PVC project, partially offset by positive cash flow generation during first quarter of 2025. I will hand over to Saoud to cover the segmental performance. Over to you, Saoud.
Thank you, Sami. Good afternoon, thank you all for joining us. Moving to the segmental review, we will start with Petrochemical segment as covered in slide 21- 25. The Petrochemical segment reported a net profit of QAR 153 million for the first quarter of 2025, an increase compared to the same period last year. This rise in profitability was primarily driven by better margins. However, the segment revenue declined during the first quarter of 2025 compared to the first quarter of 2024, mainly due to lower selling prices, partially offset by higher sales volume. The increase in sales volumes was primarily linked to a higher production due to better plant availability. Product prices also declined mainly due to deteriorating macroeconomic fundamentals compared to the same period last year.
The decline in petrochemical prices and demand is consistent with global trends as the industry faced challenges throughout 2024 and during the first quarter of 2025 due to softening demand, increased global capacity, trade tensions, and historically low earnings across various chemical values chains. Quarter-over-quarter basis, segmental profits were flat, primarily driven by almost identical revenue. During the quarter, the segment achieved superior margins compared to the previous quarter, thus stabilized profitability on a sequential basis. Moving to the Chlor-Alkali segment as detailed on slide 26- 30. The Chlor-Alkali segment reported a net profit of QAR 14 million for the current period, a decrease compared to the same period last year. Higher sales volume were fully offset by lower selling prices due to present macroeconomic uncertainties, leading to a decline in segment performance.
This decline was primarily driven by lower selling prices due to an industry-wide price crunch affecting margins. Comparing the first quarter of 2025 to the previous quarter, 2024, the segment profitability increased significantly, turning from a loss-making to profits. This improvement was mainly due to the planned turnaround during the previous quarter, higher sales volume due to better production efficiency and slightly better selling prices. The combination of these factors resulted in notably better quarterly performance for the segment. I will now hand over to Rashed.
Thank you all. I think we can open the floor for the Q&A.
Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one in your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Thank you. There are no questions. I would now like to hand the call back over to Fabian for any closing remarks.
Okay. Thank you, Angela. It looks like we don't have any questions today. In any case, thank you all for joining us. Should you have any questions later, feel free to reach out to the management team directly or to QNB Financial Services. Thank you for joining us, and I would also like to thank the management team for taking the time to update the market. Have a good afternoon.
Thank you all. Thank you for joining us.
Thank you.
Thank you.
Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.