Petrochemicals and metals company Industries Qatar blamed weaker commodity prices, new regional capacity and a decline in US demand through 2009 after posting fourth quarter net profit below analysts' estimates.

The company recorded a net profit of QR1.07 billion for the final three months compared with an average QR1.298 billion according to I/B/E/S estimates and QR93.54 million in the fourth quarter of 2008.

Industries Qatar is one of many regional petrochemicals companies that have struggled through the downturn although market fundamentals have shown signs of recovery since late last year.

Full-year net profit came in at QR4.9 billion ($1.35 billion), the company said on Monday, down 33 per cent from QR7.28 billion in 2008, due mainly to falling prices of polyethylene, urea and steel bars.

'We are somewhat surprised by Industries Qatar's relatively low earnings, as the fertiliser division did reasonably well in Q4 09 compared to Q3 09, and most petrochemical average prices were up in Q4 09 versus Q3 09,' said Laurent-Patrick Gally of Dubai-based investment bank Shuaa Capital.

On the back of the news, Gally lowered his 2010 earnings forecast for IQ to QR4.5 billion from QR5.5 billion.

IQ shares were down 3.9 per cent at 1103 GMT.

In contrast to Industries Qatar, Saudi Basic Industries Corp (Sabic), the world's top chemical company by market value, saw its fourth quarter net profit beat expectations thanks to higher prices and sales volumes for most its products.

While Sabic is predominantly a petrochemicals producer, Industries Qatar produces fertilisers, petrochemicals and steel.

Analysts expect IQ's fortunes to revive as fertiliser prices recover and the company launches a new project to boost fertiliser output called Qafco 5.

'Q4 results came significantly below what we expected, but the full-year results look reasonable given the significant decline in prices,' said analyst Ahmed Shams Eldin at EFG Hermes in Cairo.

Industries Qatar has suffered from a 55 per cent falloff in urea prices on average, Eldin said.

'Going forward, we are positive on fertiliser prices. Ammonia and urea will be 35 per cent higher this year than the 2009 average, which will support operational performance for Industries Qatar,' he said.

Eldin expects 20 to 30 per cent growth in Industries Qatar's net profit in 2010.

Industries Qatar did not publish quarterly figures, which Reuters calculated based on previous financial statements.-Reuters