UPDATE 2-Industries Qatar Q4 profit jumps; shares fall

(Adds comment from Qatari oil minister, analyst)

By Ola Galal

DUBAI, Feb 21 (Reuters) - Industries Qatar IQCD.QA, the Gulf's second-largest chemical company by market value, posted its third consecutive record profit in the fourth quarter on higher prices. The stock fell for the fourth time this week.

The board turned down a proposal to increase the share of stock non-Qatari citizens can own to 49 percent from 25 percent, the company said in a statement on the Qatari bourse Web site. The stock fell 0.37 percent.

"The board's rejection to increase the limit on foreign ownership of shares caused the share price to drop," said Khaled Arram, financial analyst at The Group brokerage in the Qatari capital, Doha. "That limit was reached about two weeks ago."

Net income in the three months to Dec. 31 jumped 50.5 percent to 1.58 billion Qatari riyals ($434.3 million), Reuters calculated, based on full-year results the state-controlled company gave.

"Chemical prices are strong," Qatari Oil Minister Abdullah bin Hamad al-Attiyah told Reuters by telephone from the capital, Doha. "The results were a record and our shareholders will enjoy a high dividend."

"The indications are very good for the first quarter, similar to the last," said Attiyah, who is also chairman of Industries Qatar. The firm groups chemical, metals and fuel additive businesses.

Net income in the year to Dec. 31 rose 37.6 percent to 4.98 billion riyals, or 9.97 riyals per share, compared with 3.62 billion riyals, or 7.24 riyals per share, in 2006, Industries Qatar said.

"The surge in prices of petrochemical products and fertilisers has driven the increase in the company's profit," said Rami Sidani, vice president of asset management at Dubai-based investment bank Shuaa Capital.

Qatar is the world's third-largest holder of natural gas reserves, using the fuel as a feedstock to make chemicals. Chemical prices are linked to oil which surged above $100 per barrel last month for the first time.

Doha-based Dlala Brokerage & Investment Holding had forecast Industries Qatar's quarterly profit would drop 17.6 percent to 865.73 million riyals. [ID:nL31368774]

The Qatari government owns 70.12 percent of Industries Qatar, whose shares are up 5.5 percent this year. The stock almost doubled in value last year. The company is offering a 40 percent cash dividend and 10 percent in bonus shares, it said.

It made a profit of 1.05 billion riyals in the fourth quarter of 2006 and 3.4 billion riyals in the first nine months of 2007, according to financial statements posted on the stock market regulator's Web site. (Editing by David Cowell)