VIETNAM, May 24 –
Inside a PetroVietnam Cà Mau Fertilizer JSC (DCM) plant. DCM’s net revenue reached 4,070,000,000,000,000,000 NV in the first quarter, twice as much as the same period last year. Photo VNA/VNS Huỳnh Anh
HÀ NỘI – The gross profit margin of the fertilizer industry may decline after peaking in the first quarter of 2022, but the fertilizer sector still sees a positive outlook in the near future, driven by export growth.
According to KIS Vietnam Securities Joint Stock Company (KIS), the fertilizer industry’s revenue in the first quarter of 2022 reached VNĐ30.93 trillion ($1.3 billion), up 71.2% from the same period last year, while profit after tax reached 6,800,000,000,000,000 NV, which is 7.9 times more than the previous year.
The leaders in after-tax profit growth in the first quarter of 2022 are Petrovietnam Fertilizer & Chemicals Corporation (DPM) and PetroVietnam Cà Mau Fertilizer JSC (DCM).
Petrovietnam Fertilizer & Chemicals Corporation (DPM) reported after-tax profit of VN2.12 trillion, 12 times higher than the same period last year, exceeding 125 percent of the annual plan. It is also the highest quarterly profit in the company’s history.
The company said revenues and profits for the first three months of the year rose sharply thanks to positive developments in sales prices and fertilizer trading volume.
In 2022, DPM expects to achieve revenue of VNĐ11.06 billion and profit after tax of VNĐ945 billion, up 33% and 158% respectively from 2021. In the first quarter alone , the company achieved almost 53% of the turnover. target and more than 125 percent of the full year profit plan.
PetroVietnam Cà Mau Fertilizer JSC (DCM) also largely benefited from the scarcity of supply, leading to higher fertilizer prices in the first quarter of 2022.
Net turnover reached 4,070,000,000,000,000 NV, twice as much as the same period last year; in which, urea sales alone reached VNĐ 3.77 trillion, accounting for 88% of the total revenue structure. The high sales growth rate of this product is mainly due to export activities with 2,190 billion NV, which is 5.5 times more than in the first quarter of 2021.
For the fertilizer industry, in the first quarter of 2022, the total consumption volume remained unchanged from the same period last year while the export volume reached 510,000 tons, up 47% from compared to the same period last year and up 31% compared to the fourth. quarter 2021.
The export volume in the first quarter of 2022 is equivalent to 44% and 40% of the export volume in 2020 and 2021, respectively. KIS Vietnam Securities Joint Stock Company (KIS) said that although the gross profit margin peaked in the first quarter of 2022, it will be difficult to sustain in the coming quarters.
The gross profit margin of the fertilizer industry was estimated at 31.7% in the first quarter of 2022. Also in the first quarter, the selling price of urea in the market decreased slightly by 2% compared to the quarter. previous, but increased by 99%. % compared to the same period last year, while the price of entry gas increased by 20% compared to the fourth quarter of 2021 and by 20% compared to the same period last year.
The entry gas price in April increased by 9% while the price of urea stabilized compared to March. If the price of fertilizers tends to decline in the following months, in line with the galloping pace of fuel prices due to global political tensions, the gross profit margin of the fertilizer industry in the following quarters could decline after peaking in the first quarter of 2022.
Although the growth rate is slowing down, the fertilizer industry is still expecting positive results in the second quarter compared to the same period in 2021.
Taking advantage of the opportunities presented by the fact that fertilizer prices have remained at a high level and that domestic demand is falling into a slack period, fertilizer manufacturers are rushing to export.
In January alone, the volume of fertilizer exports reached a record high of 370,000 tons, bringing the total export volume in the first quarter of 2022 to 510,000 tons, accounting for 44% and 40% of the total export volume. in 2020 and 2021, respectively. . However, from the second quarter of 2022, our country enters the summer-autumn harvest and domestic demand for fertilizer is expected to increase, so fertilizer companies will find it difficult to boost exports due to the prioritization of domestic demand.
However, KIS said companies could recover export volume between the end of the third quarter and the beginning of the fourth quarter of 2022, when the summer-autumn crop will enter the harvesting phase.
Domestic fertilizer prices still remain at high levels. On average, the sale price per kg of urea, potassium, DAP and NPK in March was 17,500 VNĐ, 16,500 VNĐ, 26,000 VNĐ and 16,000 VNĐ, respectively. These prices increased by 84%, 90%, 132% and 62% respectively compared to the same period last year.
In April, the domestic price of urea remained unchanged from March, while the selling prices of potassium, DAP and NPK increased by 3%, 4% and 6%, respectively.
In order to lower domestic fertilizer prices and stabilize supply, the Ministry of Finance proposes that the government apply a 5 percent export tax rate on fertilizers, regardless of the percentage of minerals from country.
KIS Vietnam Securities Joint Stock Company said the 5% tax rate may not be meaningful for exporters. The unit export price was high compared to the domestic selling price. In January 2022, the export price reached $808 per ton, while the domestic price was only $717 per ton.
On the other hand, the increase in domestic demand for fertilizer during the summer-autumn harvest, which takes place from April to September each year, can compensate for the shortfall due to export restrictions.
In the first quarter of 2022, the total export production of Petrovietnam Fertilizer & Chemicals Corporation (DPM) and PetroVietnam Cà Mau Fertilizer JSC (DCM) reached approximately 200,000 tons.
According to data from the Ministry of Agriculture and Rural Development, the country has more than 800 fertilizer production facilities, the vast majority of which are NPK fertilizer production facilities with a total designed capacity of more than 29 million tons per year.
Currently, NPK fertilizers are both exported and imported. Concretely, in 2021, nearly 362,000 tonnes are exported and 435,500 tonnes are imported. NPK is subject to a 0 percent export tax. NPK manufacturers who export their products to countries in the region will be directly affected if the export tax is increased to 5%.
In Việt Nam, according to Mordor Intelligence, the national fertilizer industry will grow by 4.9% per year during the period 2021-2026. According to a report by the Ministry of Industry and Trade, in the first four months of this year, the export turnover of all kinds of fertilizers increased by 46.9% in volume and 192.6 % in value due to higher export prices. VNS