Workers of Duc Giang Chemical Group JSC (DGC) pack products at the Ha Noi-based factory. In the third quarter of 2022, the company recorded revenue of nearly VND3.7 trillion, up 75.5 per cent over the same period last year. — Photo DGC

High fertiliser prices and increasing export demand have had a positive effect on the profit results of businesses in the fertiliser and chemical industry in the first ten months of 2022.

PetroVietnam Ca Mau Fertiliser JSC (DCM) recorded Q3 net revenue of VND3.3 trillion (US$132.8 million), up 82.5 per cent over the same period last year. Cost of goods sold increased to more than VND2.3 trillion, making DCM's gross profit on sales and service provision reach more than VND1 trillion, up 73 per cent year-on-year.

After deducting expenses, DCM reported profit after tax of VND731 billion, up 95 per cent.

According to the company, in the third quarter of 2022, the consumption of all kinds of products increased by 30 per cent over the same period last year. Fertiliser prices continued to stay high with urea fertiliser reaching VND13,781 per kilogramme, up 32 per cent, NPK fertiliser reaching VND14,045 per kilogramme, up 20.4 per cent, making revenue from sales increase sharply. Along with that, income from financial activities also increased strongly thanks to the profit on exchange rate differences.

The factors of production costs, selling expenses, and administrative expenses all increased due to fluctuations in input materials. However, thanks to rising sales volume and fertiliser prices, the profit after corporate income tax increased sharply over the same period last year.

In nine months, DCM's net revenue totaled VND11.47 trillion, up 90 per cent year-on-year and profit after tax was VND3.27 trillion, four times higher than the same period last year. With this result, DCM exceeded 27 per cent of the revenue target and 538 per cent of the profit plan.

PetroVietnam Fertiliser & Chemicals Corporation (DPM) recorded Q3 net revenue of nearly VND3.89 trillion, up 38 per cent over the same period last year. Profit after tax reached VND1 trillion, up 59 per cent over the same period last year.

According to DPM, the increase in fertiliser output and selling price created positive business results in the third quarter.

In the first nine months of the year, DPM's revenue reached more than VND14.7 trillion, up more than 91 per cent over the same period last year. Profit after tax reached nearly VND4.4 trillion, up 201 per cent compared to the first nine months of 2021 and exceeding 28 per cent of the profit plan in 2022.

In 2022, due to the unstable global political and economic situation, fertiliser prices have fluctuated unpredictably. Domestically, the high price of agricultural inputs and difficulties in consumption have negatively impacted agricultural production, causing fertiliser trading to face many obstacles due to very weak purchasing power.

However, DPM promptly seized the opportunity of high fertiliser prices to boost exports after fully meeting domestic demand. Export volume in the first nine months of the year reached about 155,000 tonnes, three times higher than the whole year’s plan.

In the third quarter of 2022, Duc Giang Chemicals Group (DGC) recorded revenue of nearly VND3.7 trillion, up 75.5 per cent over the same period last year. Cost of goods sold (COGS) increased 40 per cent, so gross profit on sales increased by 157 per cent to VND1.65 trillion.

Financial revenue also increased strongly by 255 per cent to VND143.6 billion; while the cost for this activity reached nearly VND15 billion. Selling expenses reached VND145 billion, and administrative expenses totalled nearly VND34 billion, up 18 per cent and 11.4 per cent, respectively over the same period last year. As a result, in the third quarter of 2022, DGC reported a net profit of more than VND1.5 trillion, up 210 per cent year-on-year.

In the first nine months of 2022, DGC recorded VND11.3 trillion in revenue, up 86 per cent. Profit after tax reached VND4.9 trillion, up 342 per cent over the same period last year. With this result, DGC has achieved 93 per cent of the revenue target and 140 per cent of the profit target for the year.

Promising prospect

Although fertiliser prices in the domestic market have adjusted down from the peak, many commodities still stay at high levels. For example, the average selling prices of urea products in the third quarter of 2022 of DPM fertiliser reached nearly VND13.8 million per tonne, up nearly 33 per cent compared to the same period in 2021. NPK products also increased by more than 20 per cent to more than VND14 million per tonne.

A promising export market also contributed positively to the sharp increase in profits of many fertiliser and chemical enterprises. According to data from the General Department of Customs, in the first nine months of this year, the total fertiliser export volume reached nearly 1.39 million tonnes with a turnover of $886 million, up 45 per cent in output and 166 per cent in turnover compared to the same period in 2021.

BIDV Securities Company (BSC) said that the outlook for the fertiliser and chemical industry at the end of this year is still positive thanks to the high selling prices compared to the same period last year, although the growth rate has decreased. Domestic urea price is expected to recover at the end of the year thanks to improved fertiliser demand at the start of the year's biggest crop and an increase in rice prices stimulating farmers to use fertiliser. In addition, the world urea price showed signs of recovery due to the gas crisis in Europe.

According to KIS Vietnam Securities Co, normally, the fourth quarter is the peak fertiliser consumption season. In October, the selling price of urea fertiliser is about VND15,000-15,800 per kilogramme. KIS Vietnam expects the selling price to increase further and peak at VND16,500-17,000 per kilogramme in November-December of the winter-spring crop. — VNS