Mesaieed Petrochemical Holding Company Q.P.S.C. (MPHC) Earnings Call Transcript & Summary

Hello, and welcome to the Mesaieed conference call. Please note that this call is being recorded. Now I would like to turn the call over to Dana, you may now begin.

Hello, everyone. This is Dana Sowaidi from QNB Financial Services. I would like to welcome everyone to Mesaieed Petrochemical Holding Company's Second Quarter 2026 Financial Results Conference Call. On this call from QatarEnergy's Privatized Company Affairs we have Saoud Abdulaziz Alabdulghani, Head of Investor Relations and Communications; Sami Mathlouthi, Assistant Manager, Financial Operations; and Saoud Saifalddeen Senior Management Reporting Analyst, I will now turn the call over to Saoud Saifalddeen to discuss the company results. Please go ahead.

Thank you, Dana, everyone, and 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 MPHC investors and no media representatives should be attending this call. Additionally, please note that this call is subject to MPHC disclaimer statements as detailed on Slide #2 of the presentation. Moving on to the call. On Monday, 10th August 2026, MPHC published results for the 6-month period ended 30 June 2026. And during today's call, we'll go through these results and provide you with an update on key financial and operational highlights. Today in this call, we have Sami Mathlouthi, Manager of Financial Operations; myself Saoud Alabdulghani, Head of Investor Relations and Communications; and Saoud Ahamad Saifalddeen, Senior Management Reporting Analysts. We will structure this call as follows. First, I'll provide you with a brief overview of MPHC ownership structure, its competitive strength and overall governance structure. Secondly, Sami will provide an overview of MPHC financial and operational performance as a group. Then Saoud will provide an update on the performance of each operating segment. To start with, as detailed on the IR deck, the ownership structure of MPHC is made up of QatarEnergy, which has a 57.9% shareholding with the remaining 42.1% compromising the free float from the Qatar Exchange and is held by various domestic and international institutions, corporates and individuals. QatarEnergy being the main shareholder of MPHC provides most of the head office functions to the group through a serviceable agreement. The operation of MPHC joint venture are held independently managed by their respective Board of Directors and senior management team. In terms of competitive advantages, as detailed in the deck, all of MPHC Group companies are strategically placed in terms of competitively priced and assured feedstock supply under long-term arrangements, solid liquidity position with strong cash flow generation and working with highly reputed JV partners. Additionally, its partnership with QatarEnergy Marketing acts as a catalyst for access to global market. DR presentation provides additional details on the governance structure of MPHC, including details of MPHC code of corporate governance. I will now hand over to Sami.

Thank you, Saoud. Good afternoon, everyone, and thank you for joining us. The group continued to undertake production adjustments due to the ongoing regional conflict. These circumstances affected MPHC operating performance, resulting in reduced production volumes across both the Petrochemical and the Chlor-Alkali segments. Moving on to financial performance. MPHC reported a net loss of QAR 183 million for the 6-month period ended 30th of June 2026, reflecting a 148% decline compared to the same period of last year. The decrease in profitability was primarily driven by a 56% decrease in sales volumes, reflecting logistical disruption during the period and in turn resulting in a 57% decrease in revenue. EBITDA for the period declined by 93% compared to first half 2025, largely due to weaker top line performance. Margin also came under pressure with EBITDA margin decreasing to 7% compared with 43% in the first half of 2025. While operating cost decreased in line with lower production and sales volumes, the group continued to incur fixed operating costs to maintain safe and reliable operations. On a quarter-on-quarter basis, MPHC reported a net loss compared to the previous quarter, mainly due to lower group revenue across both segments. While average selling prices did improve during the quarter, further declines in sales volumes across both the Petrochemical and the Chlor-Alkali segment resulted in 69% decrease in revenue as well as further margin compression. Despite the challenging operating environment, MPEC continued to maintain a strong liquidity position with cash and bank balances amounting to QAR 3.2 billion as of 30th of June 2026. I will now hand over to Saoud.

Thank you, Sami. Good afternoon, everyone, and thank you for joining us. Moving to segmental performance and starting with Petrochemical segment. The Petrochemical segment reported a net loss of QAR 138 million for the current period, posting a 142% decline compared to the first half of 2025. Weaker operational performance driven by sales volume decreasing by 57% and revenue by 60%, negatively impacting overall performance. At the same time, commodity prices remained under downward pressure and continued global oversupply, subdued demand in key end markets and present macroeconomic uncertainty. These factors adversely affected margins during the period. On a quarter-on-quarter basis, the segment reported a net loss of QAR 150 million compared with a net profit of QAR 12 million in the first quarter of 2026. The decline was primarily driven by a 79% reduction in revenue, reflecting an 86% decrease in sales volume, mainly linked to lower production output. This was partially offset by higher average realized selling prices, which benefited from a tighter market supply condition during the period. Moving to Chlor-Alkali segment. The Chlor-Alkali segment reported a net loss of QAR 85 million for the first half of 2026, marking a sharp decline from a net profit of QAR 8 million in the first half 2025. Performance was primarily impacted by lower production and sales volume resulting from regional conflict and related logistics concentrate. While average realized selling prices strengthened, providing partial support to earnings, the positive pricing impact could not fully mitigate the effect of lower production and sales volumes. On a quarter-on-quarter basis, the Chlor-Alkali segment reported a net loss of QAR 52 million compared with a net loss of QAR 33 million in the first quarter of 2026. The increase in losses was primarily driven by a 65% decline in sales volume, which more than offset the benefit of a 76% increase in average realized selling prices. Revenue declined by 39%, resulting in a higher segment losses compared to the previous quarter. I will now hand over back to Saoud for closing remarks.

Thank you, Saoud. With that, we conclude our call. We'd like to thank our investors for their continued trust and support, and we look forward to speaking with you again during the next earnings call.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.