DUBAI (Bloomberg) -- Industries Qatar, the largest publicly traded company in the Persian Gulf emirate, may report a 56 percent gain in profit on rising prices for fertilizer and steel and access to discounted natural-gas supplies.

Industries Qatar, the Middle East’s second-largest chemical maker after Saudi Basic Industries Corp., may report net income of 1.8 billion riyals ($495 million) when it releases results on Aug. 10, according to an estimate from EFG-Hermes Holding SAE.
“If you look at all the products that Industries Qatar manufactures, the prices have gone up,” Amrith Mukkamala, senior research analyst at Kuwait Financial Centre SAK, Markaz, said in a telephone interview on Aug. 6. “We see production increases across all of its segments.” He didn’t provide second-quarter earnings estimates.
Industries Qatar will invest as much as $3.9 billion through 2009 to boost steel, fertilizer and petrochemicals output through its four main units, including Qatar Steel Co. and Qatar Fertilizer Co. It aims to meet rising demand for construction materials as Qatar’s economy expands 12.7 percent this year, according to a Bloomberg economists’ survey in July.
-----Fixed prices
Like Sabic, the world’s largest chemical maker by market value, Industries Qatar benefits from discounted natural-gas supplies from the government. It pays $1.25 per million British thermal units for natural gas, compared with current spot Henry Hub natural gas prices of $8.70, according to estimates from Dubai-based Shuaa Capital PSC.
“Industries Qatar’s cost base for its gas-based products is fixed, and is not impacted by rising oil prices,” Laurent Gally, an analyst at Shuaa Capital in Dubai, said in a telephone interview. “This will enable the company in tough times in the industry to acquire assets and expand the way it wants to.”
Qatar Steel will more than double steel bar output, according to a May 2008 report from Markaz. Qatar Fertilizer in May signed an agreement with PetroVietnam Fertilizer & Chemical Joint-Stock Co. to export urea into the Southeast Asian country.
-----Inflation
Industries Qatar may see net income growth slow from the 115 percent reported in the first quarter because of government price intervention aiming to ease inflation and from an increase in the cost of building materials, Markaz said in a report.
Qatar Steel will keep prices unchanged in the third quarter from the second, in a bid to help the government curb rising inflation, which at a record 14.8 percent in the first quarter is the highest among the six Persian Gulf Cooperation Council states.
“You will not see the same growth as in the first quarter, but the growth rates will still be robust,” Mukkamala said.
-----Markets last week
The seven Persian Gulf benchmarks tracked by Bloomberg declined last week. Oman’s Muscat Securities Market 30 Index dropped the most, losing 4.4 percent. Saudi Arabia’s Tadawul All- Share Index fell 3.3 percent, while the Dubai Financial Market General Index retreated 2.9 percent.
Union Properties, the Dubai-based real-estate developer that’s building F1-themed parks, slid 12 percent since Morgan Stanley initiated coverage with an “underweight” recommendation on Aug. 5. The second-largest U.S. securities firm gave the stock a price estimate of 5.7 dirhams.
Shuaa Capital PSC dropped 16 percent last week. The United Arab Emirate’s biggest investment bank said Aug. 5 first-quarter net income fell 10 percent to 67.1 million dirhams ($18.3 million) as investment income declined and staff numbers almost doubled.