Qatar Steel achieved a net profit of QR 888 million in 2022, an increase of 24% compared to last year. The profit improvement was mainly driven by higher revenues, which increased by 10% compared to 2021.
In addition, Foulath Holding Company, an associate company that mainly produces and sells iron oxide pellets, reported commendable financial results on the back of improved operations, and Qatar Steel’s share of Foulath’s net profit tripled compared to last year, amounting to QR 0.4 billion for the year ending December 31, 2022.
Revenue growth was mainly driven by a sales volume improvement of 14%, primarily related to higher production volume, which was up during the year. The company has restarted Direct Reduction Unit N° 2, which was shut down earlier. In addition, decided to turn off unit N° 1.
Restarting direct reduction unit N° 2 allowed greater operational flexibility and improved production. Selling prices fell on average by 4%, mainly due to slumping domestic demand related to slowing global steel prices.
Quarterly, the company’s earnings decreased by 25% compared to the third quarter of 2022, mainly due to a decrease in revenues of 29% due to lower sales volume, which declined by 21% due to limited construction activities.
Although most of the production was exported to international markets, it remained somewhat low due to weak Chinese demand.
In addition, selling prices remained subdued as a 10% quarter-on-quarter decline was noted, mainly related to lower demand for steel. On the other hand, operating costs were lower compared to the previous quarter, which improved margins.