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

The company recorded a net profit of 1.07 billion Qatari riyals for the final three months compared with an average 1.298 billion riyals according to I/B/E/S estimates and 93.54 million riyals 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 4.9 billion Qatari riyals ($1.35 billion), the company said on Monday, down 33 percent from 7.28 billion riyals 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 fertilizer 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 4.5 billion riyals from 5.5 billion.

IQ shares were down 3.9 percent at 1103 GMT.

• FERTILISER REBOUND

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 fertilizers, 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 percent falloff in urea prices on average, Eldin said.

"Going forward, we are positive on fertilizer 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 percent growth in Industries Qatar's net profit in 2010.

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