Middle East will weather financial crisis - HSBC

04 December 2008 00:22  [Source: ICIS news]

DUBAI (ICIS news)--Cash-generating strengths and hefty margins have placed the Middle East in a good position to weather the current financial and economic crisis, an HSBC analyst said on Wednesday.

“The net income margin that Industries Qatar [IQ] has generated in the third quarter of this year is 55%. That is unheard of,” said Hassan Ahmed, managing director of HSBC’s chemical research arm. He was speaking at the Gulf Petrochemical and Chemical Association (GPCA) forum.

IQ is the holding company for four corporations in Qatar, which include Qatar Petrochemical Co (QAPCO), Qatar Fertiliser Co (QAFCO) and Qatar Fuels Additive Co (QAFAC). IQ had previously reported its cash and cash equivalents balance to be Qatar Riyal (QR) 7.9bn ($2.2bn) as of 30 September.

“When you are generating ample cash and margins like that, you can deal with downturns very well. The trick is to keep your balance sheets nice and clean and to keep generating that cash,” Ahmed added.

Echoing the viewpoint was Ben Van Beurden, executive vice president of Shell Chemicals, who said: “A strong balance sheet is a blessing at this time of point”, while highlighting the importance of corporate liquidity in such times of financial turmoil.

The GPCA forum ends on 4 December.

($1 = QR3.64)

For more on Shell Chemicals visit ICIS company intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Bohan Loh
+65 6780 4359

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