At the investor meeting in the afternoon of June 21, PetroVietnam Fertilizer and Chemicals Corporation (Stock code: DPM) announced to achieve estimated revenue of 4,915 billion dongs and pre-tax profit of 430 billion dongs for the first 6 months of the year, reaching 97% of its annual profit plan. Production of Phu My Fertilizer Plant is expected to reach 421 thousand tons, or 53% of its annual plan.

For the latter half of the year, DPM expects to sell 570 thousand tons, of which there are about 400 thousand tons of Phu My Urea and 75 thousand tons of Phu My NPK. Total revenue for the 2nd half of the year is expected to be 4,113 billion dongs and pre-tax profit is expected to be 211 billion dongs.

Profit target for the 2nd half of the year is lower as depreciation has begun for NPK project after official hand-over and operation, and the most fertilizer consuming season of the year, Summer-Autumn, is over. So, it is expected that DPM may achieve a pre-tax profit of 641 billion dongs for the whole year.

According to DPM, business performance grew positively in the first 6 months thanks to the operation of NH3-NPK chemical technology complex project and positive increase in the demand for fertilizers.

Phu My Fertilizer Plant operates at the maximum capacity to ensure the supply for Winter-Spring and Summer-Autumn crops. The PVFCCo-invested NPK chemical technology plant has basically completed the commissioning phase and is expected to be put into commercial operation in the third quarter of 2018. During the test run, about 22,000 tons of Phu My NPK products that meet market standards were distributed in the market.

In the first half of 2018, gas prices increased 25% over the plan, but profit exceeded the plan thanks to the increase in prices of fertilizers and chemicals. Specifically, price of Phu My urea increased by 8% while prices of other fertilizers increased by 23%, price of NH3 increased by 10%, and price of UFC85 increased by 41% over the plan. Cost of sales management decreased by 20% over the same period.

Regarding input gas source, reportedly, gas price policy for urea production in 2017-2019 will be unchanged. Freight charges for Phu My urea production will remain the same as those approved by Vietnam Oil and Gas Group.


(Thu Huong - Vietnam Investment Review)

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