Industries Qatar Q.P.S.C. (IQCD) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Industries Qatar results call. I would like to advise all participants this call is being recorded. I'd now like to welcome Bobby Sarkar from QNBFS to begin the conference. Bobby, over to you.

Thank you, operator. Hello, everyone. This is Bobby Sarkar, Head of Research at QNB Financial Services. I want to welcome everyone to Industries Qatar's Second Quarter and First Half 2024 Results Conference Call. On this call from QatarEnergy's Privatized Affairs Group, we have Abdulla Al-Hay, who is the Manager for Privatized company's affairs; Rashid Al-Mohannadi, who is the Head of IR and Communications; and Saffan Mohammed, who is the senior financial management analyst. So as usual, we will conduct this conference with management first reviewing the company's results followed by a Q&A. I would like to now turn the call over to Rashid. Rashid, please go ahead.

Thank you, Bobby. Good afternoon, and thank you all for joining us. I hope you are doing great. Before we go on to IQ business and performance updates, I would like to mention that this call is purely for IQ investors and no media representative should be attending this call. Moreover, please note this call is subject to disclaimer statement as detailed on Slide #2 of the IR deck. Now we can move on to the call. On Monday, 12th of August, IQ published its financial results for the 6-month period ended 30th of June 2024. And today, in this call will go through the result and provide you an update on key financial and operational highlights. 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 lines and the phone number provided as part of the indication. Today in this call, with me I have Mr. Abdulla Al-Hay, Manager of our Privatized Company Affairs and Mr. Saffan Mohammed, Senior Financial Management Analyst. Let me start the meeting by sharing with you that first time IQ Board of Directors decided to distribute an interim dividend. This is a key evidence of IQ unwavering commitment to its shareholder in particular, and to the capital markets in general. This decision was made while broader care was taken to maintain adequate liquidity for CapEx requirement, debt obligation and any unexpected adversity and/or regulatory requirements. We have structured our call as follows: At first, I'll provide you with a quick insight on IQ ownership structure, competitive advantages and overall government structure. Secondly, Abdulla will brief you on IQ key macroeconomic updates and dividend aspects, later Saffan will provide you with an update on financial performance matrices and then he will provide you with segmental updates. And finally, we will open the floor for the Q&A. To start with, as we detailed on Slide #5, IQ ownership structure compromises of QatarEnergy with 51% stake and the rest in the free float held by various domestic and international corporates and individuals. IQ is a credit rated entity by S&P of AA- and Moody's with Aa3 credit rating, more stable with a stable outlook. These ratings are further affirmed by S&P recently. QatarEnergy being the new shareholder of IQ provide most of the office functions through a service level agreement. Operation of IQ group companies are independently managed by its respective Board of Directors, along with CEO and management teams. In terms of the competitive advantages, as detailed on Slide #8, the group is well positioned with several competitive advantages with [indiscernible] strategically, operationally as well as financially, these strengths include an efficient and well-maintained [Technical Difficulty], a qualified, skilled and highly trained workforce, a sure supply of feedstock and competitive price energy sources, lower operating cost, a dedicated team in form of Muntajat to market the group petrochemical and fertilizer product, and reputable joint venture partners and most importantly, our experienced senior management team. As detailed on Slide #10, from a competitive position and perspective, IQ ranks among the top tier companies with [indiscernible] space across most of the metrics. In terms of the IQ governance structure, you may refer to Slide 51 and 52 of IR deck, which cover various aspects of IQ code of corporate governance in further detail. I will now hand over to Abdulla to cover the macro aspect, including macroeconomic, operation and year-on-year performance.

[Foreign Language] Thank you, Rashid. Good afternoon, and thank you all for joining us. Starting with the interim dividend for the first half of 2024, following the latest regulatory updates towards the end of the last year and mid of 2024. And based on QatarEnergy announcement to support the initiatives of distributing interim dividends by its listed companies being a key step and supporting efforts and initiatives that aim to strengthen the national economy through development Qatar capital market following the best regional and international practices. Following the announcement of QatarEnergy, IQ had further assessed the financial and legal capacity to distribute semiannual dividends. And based on this assessment, the Board of Directors on August 12, 2024, decided to distribute cash dividends totaling of QAR 1.9 billion for the period ended June 30, 2024, this distribution corresponds to a payout ratio of 80% of the net profit for the current period, representing QAR 0.31 per share applicable to the shareholder at the closing trading of August 20, 2024. This achievement signifies strategic initiatives to maximize shareholder value while maintaining a strong and resilient financial position to protect the company against any further market fluctuations. Moving to the macroecomic environment analysis, where the macroeconomic environment remains still changing due to the high interest rates and inflationary environment and macroeconomic context showing signs of improvement in early 2024. This, coupled with stabilization and the gross EBIT, the global demand. However, geopolitical conflicts and supply chain disruptions continue to add some level of uncertainty to the macroeconomic landscape. The petrochemicals sector faced demand and supply challenges on both consumer and producer fronts, weakened consumer demand coupled with relatively swinging crude price and structural capacity additions has somewhat eased supply during the year. Nevertheless, the recent policy stimulates why the Chinese governments provide some of the support to stabilize the demand and supply equilibrium within the segment. And the fertilizer segment, the macroeconomic environment has stabilized after reaching its peak in 2022. The restoration of European production has significantly improved supply condition and normalized of the supply and has led to a relatively stable macro fertilizer prices. This should support the industry and provide long-form stability to the fertilizer market. Throughout 2023 and early part of 2024, the macroeconomic outlook for the steel segment remained somewhat challenging with a muted demand in the property sector in larger economies like China, together with weaker consumer demand amid hawkish monetary policy, failing consumer confidence, limited domestic demand, coupled with a slowdown and a global construction activities. The sharp decline in raw material prices, such as iron ore, scrap material further impacted steel prices. However, recent policies, initiatives by the larger economies like China, whereby the Chinese government has taken a series of initiatives to boost the economy are expected to benefit the production segments and thereby the steel sector in general. Nevertheless, the steel prices have remained relatively unchanged from the previous quarter as these perform are yet to fully reflected in the macroeconomic system. I will now hand over to Saffan to cover the financial and operation update for the period.

Thank you, Abdulla. Good afternoon, everyone, and thank you for attending the earnings call. Diving into the financial performance as reported on Slide #15, group reported a consolidated net profit of QAR 2.3 billion for the 6 months period ended 30th June 2024, with a moderate improvement of 12% versus the same period of last year. Earnings per share for half 1 2024 was QAR 0.39, versus QAR 0.35 versus half 1 2023. EBITDA for the same period -- EBITDA for the period was QAR 3.4 billion with an EBITDA margin of 41% compared to an EBITDA of QAR 3.1 billion for the same period of last year, with a reported EBITDA margin of 35%. Group revenue for half 1 2024 was moderately declined by 7% to reach QAR 8.3 billion compared QAR 8.9 billion for half 1 2023, reduction in revenue for this period was due to an overall decline in selling prices and sales volume. IQ's net earnings for half 1 versus half 1 '23 as detailed in Slide #16 was largely attributed to the following key factors. Product prices, blended average product prices marginally declined by 5% versus 1 half 2023, reaching to USD 448 per metric tonne. This contributed negatively to the group's net earnings by QAR 407 million compared to last year's period. Despite prices being marginally down in 2024, it's worth noting that product prices have contributed to stabilize over the previous few quarters after peaking during the second half of 2022. This price stability was supported by supply challenges from regional geopolitical uncertainty, plant turnaround, export restriction in some large economics -- economies and production shortfalls in some of the geographies. On the other hand, demand for downstream products was impacted by muted economic forecast in larger economies, aggressive monetary policies and limited domestic countries general demand. And at the same time, a positive trend was noted in recent months on the backdrop of improved macroeconomic fundamentals and favorable policy changes. Sales volumes. Sales volume for half 1 was decreased by -- decreased marginally by 2% versus half 1 2023, primarily driven by weaker demand due to ongoing macroeconomic challenges and supply bottlenecks amid regional uncertainties and the timing of shipments between some of the segments. This was partially offset by a slight improvement in production, which was increased by 1% versus the same period of last year. Operating expenditures, operating costs for 1 half '24 was decreased by 11% compared to 1 half of 2023. The decrease was primarily due to lower variable costs driven by price-linked feedstock cost and favorable inventory movement, partially offset by general cost inflation. Other income, group financial performance for the current period but also aided by one-off income related to reversal of all bank guarantees provided by a group subsidiary, Qatar Steel to its associate [indiscernible] Steel. Part of the bank guarantee was released by the lenders and Qatar Steel share of this bank guarantee was QAR 143 million. Comparing IQ's net earnings for Q2 '22 versus 1Q '22 for as detailed on the same slide. The current quarter saw IQ's net earnings were declined by 18% versus 1Q '22 to reach QAR 1.1 billion. This reduction was primarily due to lower gross margin in the fertilizer segment, which was owed to higher operating cost, mainly within the cost of goods sold. This reduction was, however, was partially offset by improved one-off other income within the steel segment due to the reversal of previously provided bank guarantee as explained previously. On the other hand, petrochemical segment's performance marginally improved compared to the previous quarter on the backdrop of improved margins. Selling prices remained relatively unchanged versus the previous quarter within all segments, except the fertilizer segment, this was against the backdrop of an identical but more stable macroeconomic environment prevalent during the first quarter of 2024. Financial position. As detailed on Slide 15, the group's financial position remained robust, group's proportionately accounted cash balance reaching QAR 12.4 billion as of 30th June 2024, after accounting for dividend payout relating to the financial year 2023 amounting to QAR 4.7 billion. Currently, group does not have any long-term financial debt obligation. The group's reported total asset and total equity reached QAR 41.5 billion and QAR 38.4 billion, respectively, as of 30th June 2024. The group generated positive operating cash flow of QAR 1.6 billion with a free cash flow of QAR 0.7 billion during the first 6 months of 2024. With respect to the segmental performance. As detailed on Slide #24, the Petrochemicals segment reported a net profit QAR 721 million, declined by 13% versus 1 half of 2023. This decrease was mainly linked to a decline in segmental revenue and margins during the current period. As detailed on Slide #23, average selling prices were down by 5% due to prevailing macroeconomic conditions during the year. On the other hand, the sales volume remains relatively unchanged despite lower production volumes amid lower plant availability. On a quarter-on-quarter basis, segment's net earnings improved due to improved gross margins on the backdrop of decline in operating cost. Operational performance within the segments remained relatively robust, although there were some outages in one of the facilities within the polyethylene segment. Fertilizers. As detailed on Slide 30, Fertilizer segment reported a net profit of approximately QAR 1 billion for 1 half 2024 with a notable improvement of 39% versus the same period of last year. This noteworthy rise in net profit was primarily driven by improved operating costs, which declined by 13% versus last year. Improvement in operating costs were mainly associated with the reduction in variable cost owing to lower feedstock cost and favorable inventory changes. Additionally, sales volumes were marginally improved due to improved production volumes compared to the same period of last year. Segment's revenue decreased by 1 half -- by 2% in 1 half compared to the same period in last year due to lower selling prices as detailed on Slide 29, which were partially offset by improved sales volumes. Selling prices declined marginally by 4% versus 1 half '23, as nitrogen fertilizers -- fertilizer prices returned to their long-term average after peaking in first half of 2022. On a quarter-on-quarter basis, segmental revenue decreased by 5% versus the previous quarter, owing to lower average selling prices, partially offset by higher sales volume. Selling prices declined by 17%, while the sales volumes improved by 14%, resulting in overall revenue for Q2 '24 declined by 5% versus the previous quarter. Segment's net profit decreased by 43% mainly due to lower gross margin on account of reduced revenues and higher operating costs. Moving on to steel segment. As detailed on Slide #36, the steel segment reported a net profit of QAR 359 million, which increased by 29% compared to last year. Improved segmental earnings were mainly driven by recognition of a one-off other income related to the reversal of a bank guarantee amounting to QAR 149 million previously provided to one of its associates, which was explained previously. Segmental revenue declined by 18% due to lower prices and volumes combined. Steel prices as detailed on Slide 35, on average, decreased by 5% due to higher supply in the market and softening domestic and international demand simultaneously, sales volumes were down by 15% due to challenging demand conditions. Construction demand continued to remain difficult due to prevailing macroeconomic environment with most single banks to process with hawkish monetary policies, although conditions started to improve during Q2 '24 as a result of global recovery, particularly in China, a larger contributor to the construction economy has taken a serious of measures to reignite its domestic construction sector. On a quarter-on-quarter basis, the segmental profits improved by 29% versus 1Q '24, mainly because of enhanced other income as the segment recognized a one-off nonrecurring income in Q2 '24, relating to reversal of the bank guarantee as discussed previously. Segment's revenue declined moderately by 14%, mainly due to lower sales volumes, which decreased by 16% on account of muted domestic and global demand. Production declined by 24%, primarily due to lower production on account of planned maintenance during the second quarter of 2024. That concludes the segmental discussion, and I will now hand over to Rashid to further conclude the presentation.

Thank you, Saffan. I would like to thank the management team for the presentation. Now we can open the floor for the Q&A.

[Operator Instructions] And your first question comes from the line of Ricardo de Rezende from Morgan Stanley.

My first question is on this reversal of the QAR 143 million that you just mentioned. Is there anything that should still be impacting in the third quarter? Or is that specifically on the second quarter? And then the second question is on when unexpected shutdowns in one of the polyethylene plants here [indiscernible] if I'm not mistaken. Could you please just elaborate a little bit more on that? And has that been fixed? And how much extra cost did you incur because of that turnaround?

Yes. This LDP plant shutdown was a planned shutdown. So the cost information, basically, these are all capitalized. So we don't have, in fact, expenditure with respect to the shutdown. Those are all capitalized, and it will be part of added to the PPE. That was a planned shutdown. And within the polyethylene segment, there are no major shutdown going ahead within the next rest of the year. So there'll be a couple of few small shutdowns every month, very minimal shutdowns. What was the other question?

On the reversion -- on the provision and the reversion?

For the solid, the QAR 143 million our share of that was currently agreed, further discussions are going on, still I think that's been agreed.

And your next question comes from the line of Prateek Bhatnagar from HSBC.

I have 2. The first one is on QAFCO. Where are we with the acquisition of the remaining stake 50%. Could you give some light there? The second question is on QAFCO, you said that the fertilizer OpEx was benefited by beneficial inventory you had. So how much -- can you quantify what was the benefit which incurred to you because of the beneficial inventory? And will there be some benefit in Q3 as well in Q4 for that?

Prateek, thank you for the questions. Much appreciate your participation. I believe we had the same kind of a question during the, I would say, year-end of 2023, where we have also had the same answer that whenever this stake of CapEx, 50% are offered for sale of IQ, we will be interested to enter into a negotiation with the owner of that stake. However, this stake still not been offered for IQ. And once it will be offered, will be announced the progress of that negotiation to the shareholders. Second point with regard to the QAFCO's favorable inventory movement. Maybe Saffan can elaborate more.

So if you look at the end of 2023. So we had -- or end of 2022 our opening inventory because of all this unrest in Russian Ukraine war, we had expensive inventory those were carried in our balance sheet. And by end of 2023, the inventory valuation became relatively lower. And so gradually, so those inventories were consumed during 2023. As a result, if you do a comparison between 2023 first quarter and 2024 first quarter, so we had a beneficial first half and first half of 2024. Our inventory movement was positive. As a result, we had this favorable inventory movement. Now gradually, that will get managed off over a period because 2022 year-end and 2023 year-end, we had a contrasting inventory issue because year-end 2023 or 2022 was an exceptional year. Now that will get eased off over a period of time, and we'll get what we call a stabilized inventory movement. So that is by -- in Q2, your inventory movement became negative. So this will get offset over the next few periods. So you'll have a very stabilized inventory movement and your margins would get stabilized in the fertilizer segment.

Your next question comes from the line of Sashank Lanka from Bank of America.

Yes. I have 3 questions, if that's okay. The first one is on the fertilizer segment. We noticed that your volumes were very strong in Q2, I think at 1.5 million tonnes, you are probably the highest since the last 4, 5 quarters. So just wondering what's the outlook over the course of the year? Should we assume similar levels of volumes? That's the first question. The second question is when I look at your realized prices in urea, they were around $291 per ton and just looking at some of the global peers as well as regional peers who reported they generally have reported a higher urea prices So I know you, in the past, have mentioned this is related to the volume weighted average. But I just wanted your sense on how the trajectory of pricing in Q3 has been so far versus Q2 specifically for urea. And the third question is on dividends. It's good that you have introduced interim dividends. I think in the past for the annual dividends, you maintain the payout policy around 80%, 85%. So should we assume that, that implied policy remains for interim dividends as well given the first half dividend was around the 80% payout?

Thank you. I will answer your last question with regard to the interim dividend. Then the other 2 questions will be answered by Saffan. With regards to the interim dividends, as you are aware, IQ has taken the initiatives from the QatarEnergy where they want to improve the market and to stabilize. And so -- and everybody has noticed how IQ has been very generous in distributing dividend to the market and to the shareholders. So this time, IQ have distributed 80% of their earnings for the first half. However, for the second half of the year and definitely, this will be adjusted based on the market condition. And based on the prices and based on the performance, then we will present all these factors to the Board for their final decision on the year-end dividend. So we will be waiting for the next 6 -- for the remainder period to see how it goes with the performance of these companies. Then we're going to take a call on the year-end dividend. Saffan will answer your first question with regard to the QAFCO volume, which is higher in the second quarter versus the first quarter.

So Sashank, the sales volumes were up because during Q1, we had a shipment that got delayed on the last day due to some shipping -- the ship's availability. So that got moved into Q2, so that's why the second quarter shipment went up. And also, we had some shutdowns in Q1. So that moved into -- those volumes also moved into Q2. So that's why your volumes were up. And your question regarding how your future volumes would be. That's also a function of your production, which is a function of your shutdowns. So with respect to plant shutdown, QAFCO will have a shutdown in the fourth quarter other than that, so you will have your usual average production based on the historical volume. So unless otherwise you have unplanned shutdowns, your volumes would remain pretty much historical. So Q2 additional volumes coming from shipment that moved from Q2 to -- Q1 to Q2 other than that it is pretty much averaged out.

You had a question, Sashank, about the urea prices.

Urea prices -- the prices are around $295 to $300. So as you know, most of the marginal producers if the price is close to $290, there'll be unplanned shutdown will come within the marginal producers. So volumes would go below the market requirement level. So therefore, again, prices to go back $300, $320 level. So the price would float between $300 to $340 level. So this would be the long-term flow and the cap unless the 2022 conditions repeat. So that would be the cap and the flow.

Your next question is from the line of Abhinav Sinha from Lesha Bank.

A couple from my side. So one is on the COGS, like what would be the rough split between fertilizer and steel. Would it be like 60-40 or 70-30 for that? And the second thing is that you mentioned that it's the -- it's a combination of favorable inventory movement and the price. But if we look at like the urea price, compared to 1H '23, it's stable in 1H '24. So like I would assume that maximum reduction in COGS has happened due to the inventory movement. Is it the right thing to assume? And lastly, like on the QAFAC, the disclosure has been made at QAR 119 million was the revenue which was added to the group from 10th of June to 30th of June. So would it be fair that for the full year, we assume it to be what has been disclosed like in the annual report. So let's say, for a full year, I think last year, it was QAR 2.7 billion. So would QAR 1.3 billion for the remaining 6 months would be a fair assumption?

The COGS basically -- yes, this is the combination of both. If you look at the way -- how the feedstock mechanism works, there are 2 elements to the feedstock mechanism, it's based on your year-to-date prices. But if you really look at the year-to-date prices still the current year prices it is $291 compared to plus $300. So obviously, there is a price reduction, which affected -- which affects your COGS. And obviously, the inventory valuation is the major contributor as you correctly said. So that is the major contribution. And the other point out of the component or the contribution to the overall cost of goods sold. Obviously, fertilizer contributes the great element to the cost of goods sold within the group, we don't want to quantify it, but fertilizer gives a greater component.

Regarding the QAFAC sales revenue from 10th June to 30th June, we mentioned QAR 119 million. QAFAC was consolidated or accounted as a joint venture up to 9 June. So from 10th June to 30th June during that period QAFAC accounted as a subsidiary. So when you do the accounting as a subsidiary, you take 100% of QAFAC, then you show the minority interest separately. So if you look at the income statement, you see minority share. So this portion is 100% of QAFAC. Actually, 50% of that is related to IQ, 50% is related to minority. So okay I think clear now.

Okay. So just like -- so basically, it would increase the revenue, the operating profit, but at the net income level, it would be same because the 50% is anyway is attributed to the minority. Is that correct?

It's eliminated as minority interest only at the net profit level.

Right, exactly. So that's the -- okay, clear.

Your next question comes from the line of Oliver Connor from Citi.

First one is just on demand. You mentioned your overview around positive signs in China. I mean if we look at the petrochemical segment specifically. Any indications of demand improvement globally or on China sort of Q-on-Q. And then the second question related to blue ammonia. So it was interesting to see a big acquisition in the U.S. recently. Just trying to get a sense of your thoughts on how the blue ammonia markets evolving vis-a-vis potentially signing offtake agreements for some of your volumes when they come through?

Petchem demand, nothing specific. So with respect to Chinese petchem demand, what we see with China support with respect to especially to construction industry. Now China has -- is buying some of the loans from the banks and the consumers which will be supportive for petchems as well as the construction industry. So the view -- the general view, the consensus view is that will support the petrochemical prices, and we have seen the petrochemical prices have tried out in April, May and now have slightly recovered. Now we have seen the prices have reached to around $1,100 after reaching the bare minimum of $1,000 dollars. So our view is that it should maintain at $1,100 or slightly improve over the period -- over the next 6 months.

With regard to the second question of the blue ammonia, as you are aware, still the projects under construction. However, with regard to the premium taken in consideration of the ammonia. I would say that the full premium has not been recognized yet because it will depend on the consumer advertise. However, we believe over the time, there will be a recognized premium. However, we don't know when this will be achieved. And I would say the next 2 to 3 years, we will see a higher demand from the consumer towards more greener products. So we believe that the premium will be recognized in the future.

And your next question comes from the line of Seki Mutukwa from Ashmore.

Two questions, please. One, perhaps we have follow-up on the dividend side, just obviously given the net cash and your expectations on CapEx, et cetera, would you be willing to talk about a flow in terms of the payout ratio. I know you're obviously not going to give an exact number now, but just wondering where sort of you would say is either a range or a flow? And then the second question is just on the fertilizer space. What is the timing you expect in terms of government tenders from India and maybe China again possibly in the second half of this year.

We go to the dividends and the expectation of [indiscernible], it will be very hard and difficult for me to answer this question right now. However, I would advise you to make a reference to the historical payout ratios, maybe this will help you to project how IQs -- the future of the IQ dividends to the market shareholder.

So with respect to the specifically the Indian tender, what we have noticed this time the tender rather than India the offering the tender once at the bulk, they have divided the tender into a small quantities. So we have seen small tenders being quoted. So maybe they go with further small tenders in the months to come. So in the past, I think 3 or 4 offers have been made. Other than that, we have not heard anything, but with monsoon is expecting from in India, already been in coming so another tender may come up shortly. China, which I think there is -- there are some export restrictions in China. So maybe I don't know whether they will come up with tender because they may be using their own production in China.

[Operator Instructions] And your next question comes from the line of Soha Saniour from Arqaam Capital.

My question is also regarding the ammonia project or ammonia set of projects. I just wanted to ask 1 million to 2 million tons, are they going to all be incremental capacity or is it a possibility that it would to replace some of the existing older ammonia lines, I think ammonia line 1 and 2 [indiscernible] ammonia 7 line. Just want to get [indiscernible] from the incremental capacity or currency volumes for ammonia on that end? And the second question is regarding the offtake of the blue ammonia. I understand QatarEnergy will be the full off-taker. But is it a fair assumption to assume that it will be sold from your end to QatarEnergy at prices similar to grow ammonia with whatever premium being realized by QatarEnergy given that they are carrying out the carbon capture and so on? Or what is the fair assumption here for the pricing of this blue ammonia from Qatar IQ?

Thank you for your question. I would say that it is incremental capacity to the current capacity of the QAFCO. We have highlighted earlier that we're going to do the full revamping of ammonia 1 and 2. So again, I keep these 2 trends. And we will consider blue ammonia as an additional capacity to the -- our fertilizer. So with regard to the take off agreements, as you correctly highlighted that QatarEnergy will take up all the quantities. However, the pricing mechanism still have not agreed on. However, there will be -- I would say, charges for the carbon capture will be as ease or tariff a small amount. It's not something that will recover the investment done by QatarEnergy, no, we don't think so. It is just the fees or our tariffs. And the prices also should provide us with a premium. However, we're still at a very early stage, we cannot comment on the future, I would say, prices where we are not certain on the macro economic at that time and about the advertising of the consumer related to the blue ammonia.

And a final follow-up question from Ricardo Rezende from Morgan Stanley.

Just a follow-up on your last comment. Have you already signed a CCS contract with QatarEnergy?

Still this contract has not been finalized, and we have not entered onto any negotiation yet. However, we have agreed on a -- that there will be some charges on the carbon capture.

And your final question today comes from Yousef Husseini from EFG Hermes.

Just one for me. I was just wondering if you guys have heard anything about potential corporate taxes in Qatar and if those would apply to IQ?

Still nothing. I would say that they will continue with the same status. Nothing come to us. We are exempted, we are like IQ in the listed market and we are exempted from the tax.

And that concludes our Q&A session for today. I would like to hand back over to Bobby for any further remarks.

Thank you. Okay. So if this is the last of questions, we can end the call for today. I want to thank Abdulla, Rashid and Saffan, for taking the time to answer our questions, and we will pick this up next quarter. Thank you, everyone.

Thank you very much. I appreciate it.

This concludes today's conference call. Enjoy the rest of your day. You may now disconnect.