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Investors Presentation

QPIC Earnings updateFor the three Quarters ended 31 DEC 2019

04 February 2020

Disclaimer

2

This presentation is not an offer or invitation to subscribe to or purchase any securities.

No warranty is given as to the accuracy or completeness of the information in this presentation. You must

make your own independent investigation and appraisal of the business and financial condition of Qurain

Petrochemical Industries Co. hereby referred to as (“QPIC”).

Nothing in this presentation shall form the basis of any contract or commitment whatsoever. This

presentation is furnished to you solely for your information. You may not reproduce it to redistribute to any

other person.

This presentation may contain forward-looking statements. These statements may be identified by such

words as "may", "plans", "expects", "believes" and similar expressions, or by their context. These statements

are made on the basis of current knowledge and assumptions. Various factors could cause future results,

performance or events to differ materially from those described in these statements. No obligation is

assumed to update any forward-looking statements.

By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound

by the forgoing limitations.

04 February 2020 QPIC - Investor Update for 3Q 31 December 2019-20

Index

1 Financial highlights for the three quarters ended 31 Dec 2019 4

2 Consolidated Statement of Income – 31 Dec 2019 5

3 Consolidated Statement of Financial Position – 31 Dec 2019 6

X Appendix 8-14


Consolidated Income Statement

1 Sale Revenues have increased by 13 % compared to the same period in the previous year due to increased sales from our

subsidiary SADAFCO and JTC

2 Similarly the Gross Profit has increased by 16% as compared to the similar period last year.

3 Share of Income from associates have decreased by 30% owing to a lesser share from Kuwait Aromatics Company (KARO) and

United Oil Projects (UOP) during the period.

4 Selling and marketing expenses have increased by 22% versus last year on account of increased sales.

5 QPIC recorded a Net Income of KD 14.29 million, 8% lower than KD 15.61 million for the similar period last year. Similarly,

Earnings Per Share (EPS), has decreased to 13.88 fils, 8% lower than the EPS of 15.03 fils in 2018-19.

Consolidated Statement of Financial Position at 31 Dec 2019

1 Current assets have decreased by 6% than the previous year on account of decreased cash and short term deposits and

decreased financial assets at fair value through profit or loss.

2 Total assets have increased by 7% to reach KD 789.55 million on account of the acquisition of 60% stake in Jassim Transport

Company (JTC) for KD 42 million.

3 Current liabilities have increased by 12% compared to last year due to the increase in trade payables.

4 Non Current liabilities increased by 33% compared to last year due to increase in Term loans during the period.

5 Total shareholders’ equity has decreased by 2% on account of increase in treasury shares.

Financial Highlights for the three quarters ended 31 Dec 2019


Nine months

ended 31 December 2019

Nine months

ended 31 December 2018

Difference 31 December 2019

Difference 31 December 2019

Better

/Worse

KD KD KD %

Sales 163,452,893 144,356,375 19,096,518 13%

Cost of sales (108,741,710) (97,264,435) (11,477,275) (12%)

Gross Profit 54,711,183 47,091,940 7,619,243 16%

Dividend, Interest and Other Income 2,329,655 2,482,261 (152,606) (4%)

Realized and Unrealized (loss) gain at fair value through

profit or loss (FVTPL)(100,526) (199,956) 99,430 50%

Share of results of associates 8,435,520 11,967,703 (3,532,183) (30%)

General and administrative expenses (15,858,587) (17,256,189) 1,397,602 8%

Selling and marketing expenses (18,812,900) (15,416,550) (3,396,350) (22%)

Finance costs (2,609,025) (1,820,815) (788,210) (43%)

Profit before provision for taxation, Board of Directors’

remuneration28,095,320 26,848,394 1,246,926 5%

Provision for taxation (434,654) (462,096) 27,442 6%

Board of Directors’ remuneration (112,500) (112,500) - - -

Profit for the nine months 27,548,166 26,273,798 1,274,368 5%

Attributable to:

Shareholders of the Parent Company 14,290,731 15,615,765 (1,325,034) (8%)

Non-controlling interests 13,257,435 10,658,033 2,599,402 24%

27,548,166 26,273,798 1,274,368 5%

Basic & diluted earnings per share attributable to

shareholders of the Parent Co.13.88 fils 15.03 fils (1.15) fils ( 8%)

Consolidated Statement of Income for the three quarters ended 31 Dec 2019


As of As of Difference DifferenceIncr. Decr

31-Dec 2019 31-Mar 2019 2018-19 Vs. 2019-20 2018-19 Vs. 2019-20ASSETS KD KD KD %CURRENT ASSETSCash and short term deposits 87,084,467 114,281,755 (27,197,288) (24%)

Trade and other receivables 50,455,194 34,555,141 15,900,053 46%

Inventories 35,270,066 27,741,862 7,528,204 27%

Financial assets at fair value through profit or loss 1,398,097 7,805,466 (6,407,369) (82%)

TOTAL CURRENT ASSETS 174,207,824 184,384,224 (10,176,400) (6%)

NON-CURRENT ASSETSFinancial assets at fair value through other comprehensive

income223,474,383 223,322,875 151,508 - -

Investment in associates 99,626,465 91,483,254 8,143,211 9%

Goodwill & Intangible assets 139,018,313 126,582,387 12,435,926 10%

Property, plant, equipment and others 153,222,591 105,361,802 47,860,789 45%

TOTAL NON-CURRENT ASSETS 615,341,752 546,750,318 68,591,434 11%

TOTAL ASSETS 789,549,576 731,134,542 58,415,034 7%

LIABILITIES AND EQUITYLIABILITIESCurrent liabilitiesTrade and other payables 69,712,454 60,861,428 8,851,026 15% -Borrowings 1,451,804 1,445,193 6,611 - -TOTAL CURRENT LIABILITIES 71,164,258 62,306,621 8,857,637 12%

NON-CURRENT LIABILITIESEmployees’ end of service benefits 15,306,921 13,224,715 2,082,206 16%

Term loans 98,445,835 66,981,890 31,463,945 47%

Non-current Liabilities 8,585,839 2,270,393 6,315,446 278%

TOTAL NON-CURRENT LIABILITIES 122,338,595 82,476,998 39,861,597 33%

TOTAL LIABILITIES 193,502,853 144,783,619 48,719,234 25%

EQUITYShare capital 109,919,258 109,919,258 - - -Statutory and Voluntary reserves 61,746,960 61,746,960 - - -Treasury shares (18,625,473) (13,363,430) (5,262,043) 39%

Other Reserves 7,221,507 7,802,408 (580,901) (7%)

Cumulative changes in fair value reserve 135,514,243 136,378,657 (864,414) (1%)

Retained earnings 131,724,730 134,054,397 (2,329,667) (2%)

EQUITY ATTRIBUTABLE TO SHAREHOLDERS

OF THE PARENT COMPANY427,501,225 436,538,250 (9,037,025) (2%)

Non-controlling interest 168,545,498 149,812,673 18,732,825 13%

TOTAL EQUITY 596,046,723 586,350,923 9,695,800 2%

TOTAL LIABILITIES AND EQUITY 789,549,576 731,134,542 58,415,034 7%

Consolidated Statement of Financial Position at 31 Dec 2019

QPIC Inception

QPIC Investment Portfolio

QPIC Core Investments

EQUATE GROUP

KARO – Kuwait Aromatics Co.

SADAFCO – Saudia Dairy & Foodstuff Co.

NAPESCO – National Petroleum Services Co.

JTC - Jassim Transport & Stevedoring Co.

X APPENDIX

Appendix


Qurain Petrochemical Industries Company (QPIC) was established in 2004 by the Government of Kuwait through its

Petrochemical arm (Petrochemical Industries Company) to encourage local private sector participation in the

petrochemical sector of Kuwait

Strategic focus on Petrochemical,

Energy and Industrial Sectors

Key investments include Equate,

TKOC, KPPC, TKSC, SADAFCO, NAPESCO

and JTC

Listed on BoursaKuwait (Formerly known as Kuwait Stock Exchange) since July 2007

Strong Shareholder support

KIPCO Group (UIC) → 29.6%Petrochemical Industries Co. → 10.0%

Inception


http://www.pic.com.kw/favicon.ico

Through a well diversified and balanced portfolio, QPIC aims to maintain a positive and sustainable growth

momentum. QPIC currently invests within four key industrial sectors as follows:-

PetrochemicalIndustries

Dairy & FoodstuffIndustries

Other IndustriesOil & Gas Services

• EQUATE Group• EQUATE

Petrochemicals• MEGlobal• The Kuwait Olefins

Company (TKOC)

• Kuwait Aromatics (KARO)• Kuwait Paraxylene

Production Company (KPPC)

• The Kuwait Styrene Company (TKSC)

• Saudia Dairy & Foodstuff Company (SADAFCO)• Mlekoma sp.

• Jassim Transport & Stevedoring Company (JTC)

• Insha’a Holding Company• Bubiyan Readymix Co.• EPO Gulf Specialties• SANDCO Gen. Trd.• BAYAN Gen. Trd.• Tashyeed Combined

Company (ABRAJ)

• National Petroleum Services Company (NAPESCO)

• United Oil Projects Company (UOP)• United Precision

Drilling Co (UPDC)• AlKhorayef United

Holding Co (AKUH)

43% 32% 17% 8%

Investment Portfolio


➢The EQUATE Group includes EQUATE Petrochemical Company, The Kuwait OlefinsCompany (TKOC) and MEGlobal.

➢EQUATE was established in 1995 as Kuwait’s first international petrochemical JValong with Dow Chemicals and commenced production in 1997. TKOC wasfurther established in 2004 as the second JV thereafter with the exact sameshareholders of EQUATE in order to further expand Kuwait’s footprint as a globalproducer of petrochemicals. In 2015, EQUATE acquired 100% of MEGlobal,enabling EQUATE to become the world’s second largest producer of EthyleneGlycol (EG).

➢EQUATE currently owns and operates world-class petrochemical complexes inKuwait, North America and Europe. It’s products are marketed throughout Asia,the Americas, Europe, the Middle East and Africa and currently accounts to over60% of Kuwait’s exports in value from non-oil sources.

Product EQUATE TKOC MEG Equipolymers TOTAL

Polyethylene 1 million - - - 1 million

Ethylene Glycol 550,000 600,000 2.1 million - 3.24 million

PET - - - 335,000 335,000

Production Capacity

EQUATE Group


ASSET CLASS AFS

SECTOR PETROCHEMICALS

REGIONKUWAIT, NORTH AMERICA & GERMANY

QPIC HOLDING

6 %

➢ Kuwait Aromatics Company (KARO) was established in 2004 as aKuwaiti Shareholding Company with a paid-up capital of KD 250million to manufacture and hold the interests in KPC’s Aromaticsproduction arms through the two below subsidiaries:

▪ KPPC is fully owned by KARO was established in 2006 as ashareholding company with an authorized capital of KD 250million. The company commenced its commercial production in2010, buys its feedstock (Naphtha) from KNPC, and producesParaxylene, Benzene, and Heavy Aromatics to be exported toselected international markets.

▪ TKSC is owned 57.5% by KARO in 2004 with a capital of US$140million. When established, it was the first of its kind and thesole manufacturer of “Styrene Monomer” in the State ofKuwait. TKSC started its commercial production in 2009.(metric ton per annum)

(metric ton per annum)

Production Capacity (metric ton per annum)

KPPC TKSC

Benzene 393,000 Styrene Monomer 450,000

Paraxylene 829,000

KARO – Kuwait Aromatics Co.


ASSET CLASS ASSOCIATE

SECTOR PETROCHEMICALS

REGION KUWAIT

QPIC HOLDING

20%

➢ Saudi Dairy & Foodstuff Company (SADAFCO) was established in1976 to become a leading, world-class food manufacturer, importer,distributor and marketer in the Middle East. It’s based in Saudi Arabiawith operations across the Middle East and was listed on the SaudiArabian Stock Exchange (TADAWUL) in 2005.

➢ Production includes plain and flavored milk, plain and flavored Laban,soy milk, evaporated milk, date milk and thick cream, tomato paste,feta cheese, crispy snacks, Arabic Coffee, Juices, flavored sparklingwater and still water, of which SADAFCO holds a market leadershipposition within Saudi Arabia within UHT Milk, Tomato Paste and IceCream.

➢ Additional products sourced by third party manufacturers such aspotato-fries, butter, triangle cheese, ketchup, instant milk powder andtinned sterilized cream are sold and distributed by SADAFCO’s widenetwork of 500 sale routes, with over 23,500 ambient customers and18,500 customers of frozen products.

SADAFCO – Saudia Dairy & Foodstuff Co.


ASSET CLASS SUBSIDIARY

SECTORDAIRY & FOODSTUFF

INDUSTRIES

REGION

SAUDI ARABIA, POLAND & SELECT COUNTRIES WITHIN

MIDDLE EAST

QPIC HOLDING

40.11%



➢ National Petroleum Services Company (NAPESCO) was foundedin 1993 as a private company offering pumping services to theKuwait Energy Sector.

➢ NAPESCO was listed in 2003 on Boursa Kuwait (Kuwait StockExchange) and in 2006 the company expanded its businessoperations and started its International Operations.

➢ NAPESCO’s core activities involve services within:-

➢ Upstream Oilfield Services; such as well-cementing andintervention as well as filtration services.

➢ Downstream & Energy Services; including a number ofdiversified activities with HSE, Engineering andConsultancy services being the core competencies,supported by state-of-art environmental laboratory andleading technologies in waste management.

➢ QHSE implementation.

NAPESCO – National Petroleum Services Co.



SECTOR OIL & GAS SERVICES

REGION KUWAIT

QPIC HOLDING

51.7%



➢Jassim Transport & Stevedoring Co. K.S.C.C. (JTC) was founded in1979 as an inland transportation company.

➢The JTC brand is associated with four core activities that serve avariety of markets throughout Kuwait and selected GCC countries.JTC operate within four core activities:

• Ports Management; such as handling general andcontainerized cargo, custom bonded warehouses andcustoms clearance support.

• Contract Logistics; such as general transportation andland transport solutions, bulk fuel, waste watersupported by JTC’s open storage facilities and coveredwarehouses at Mina Abdullah.

• Equipment Leasing; rough terrain, all terrain, truckmounted and crawler cranes, as well as project & heavylift to manage project logistics for bulk shipments, rigmoves and oil field projects.

• Power Rental; catering towards power projects, oilfieldoperations and supported by JTC’s strong technicalexpertise, customized solutions and state-of-the-artequipment.

JTC – Jassim Transport & Stevedoring Co.


SECTOR OTHER INDUSTRIES

REGION KUWAIT & SELECT GCC

QPIC HOLDING

60%


Thank You

For more information pertaining to Qurain Petrochemical Industries Co. (QPIC) investor relations activities, please visit our dedicated “Investor Relations” section on QPIC corporate website - www.qpic-kw.com

http://www.qpic-kw.com/

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