PVFCCo’s estimated revenues reached VND 4,915 billion and pre-tax profit VND 430 billion in the first six months, representing 97% of annual profit plan for 2018
PetroVietnam Fertilizer and Chemicals Corporation (PVFCCo – Stock Code DPM) estimates that its business performance in the first 6 months of 2018 has developed positively thanks to the operation of chemical technology NH3-NPK complex and strong demand for fertilizers.
Phu My Fertilizer Plant currently operates at top capacity to promptly supply fertilizers for Winter/Spring and Summer/Autumn/rainy season crops in key regions throughout the country. Meanwhile, the NPK chemical technology Plant built by PVFCCo has basically completed its commissioning and is ready for commercial operation in the third quarter of 2018.
Mr. Le Cu Tan, PVFCCo Chairman, said that PVFCCo would actively and vigorously implement its production and business management solutions to achieve results as forecast and may consider to adjust its plan subject to favorable situations. In terms of natural gas as the input material, reportedly the gas price policy for fertilizer production in the period 2017-2019 will remain unchanged. The tariff of gas for Phu My fertilizer production will remain in line with the principles approved by PVN in its Decision No. 7614/QĐ-DKVN dated 31/10/14.
Production output of Phu My Fertilizer Plant in the first 6 months of 2018 was estimated to achieve over 421,000 tons, representing 106% and 53% of the 6-month plan and annual plan, respectively. Sales of Phu My Urea in the first 6 months was estimated to reach 443 thousand tons, hitting 54% of the annual plan. Estimated other fertilizer sales reached 195,000 tons, accomplishing 150% and 86% of the 6-month plan and the annual plan, respectively. Especially, although the chemical technology NPK plant is still in the commissioning period, NPK Phu My produced by this plant have satisfied commercial standards and 22,000 tons have been produced and sold to the market, enthusiastically hailed by the distribution and farmers, initially yielding good efficiency on crops.
The chemical sector also achieved positive results, in which NH3 sales rose sharply to 24.3 thousand tons, up by 286% on year-on-year basis and accomplished 44% of the annual plan because PVFCCo has officially operated the revamped NH3 Unit since early 2018. In addition, PVFCCo has sold more than 27,000 tons of other chemicals including UFC85, CO2 and petrochemicals in the first 6 months of 2018.
Total revenues in the first 6 months of 2018 were estimated at VND 4,915 billion, achieving 57% of the annual plan, up by 11% on year-on-year basis. Pretax profit was estimated at VND 430 billion, equivalent to 97% of the annual target.
PVFCCo said that in the first half of 2018, although the gas price rose by 25% as compared to the planned price, the profit exceeded the target thanks to increase in prices of fertilizers and chemicals. Specifically, Phu My urea prices rose by 8%, other fertilizer prices by 23%, NH3 by 10%, UFC85 by 41% as compared with their targets. Simultaneously, PVFCCo has made best efforts to cut selling and management costs. These costs were reduced by 8% as compared to the plan and fell by more than 20% on year-on-year basis. In addition, as NPK project is still in the commissioning period, depreciation cost has not yet been taken into account as planned.
In the coming time, PVFCCo expects to vigorously push its products to the market, with sales of fertilizer products in the second half of 2018 about 570 thousand tons, including 400 thousand tons of Phu My Urea, 75 thousand tons of Phu My NPK. PVFCCo targets to achieve the output of 60 thousand tons of chemical products. Total revenues in the second 6 months are expected at VND 4,113 billion and profit before tax VND 211 billion. The profit target in the second half is expected to be lower than the first half because depreciation cost will be included after the official completion and handover of NPK plant and the market has passed the fertilizer consumption peak in Summer/Autumn/rainy season.
With above forecast, PVFCCo”s total revenues in 2018 are expected to reach VND 9,028 billion and pre-tax profit VND 641 billion, exceeding the targets approved by the General Meeting of Shareholders by 5.3% and 45%, respectively.
