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Fertiliser corporations reported revenue up by 5-10 occasions within the first quarter of this yr in comparison with the identical interval in 2021, primarily due to the sturdy enhance in common promoting costs.
Duc Giang Chemical substances Group (DGC) achieved revenue of VND1.5 trillion (US$65.5 million) in Q1 this yr, 7.1 per cent increased than the determine of VND1.4 trillion recorded within the fourth quarter of 2021 and greater than 5 occasions increased than the identical interval final yr, at VND292 billion.
In accordance with estimates by SSI Analysis, this yr, DGC’s income will enhance by 22 per cent and revenue by 25 per cent. Final yr, DGC’s revenue spiked by 352 per cent. Available on the market, DGC shares have elevated 53 per cent since early this yr.
Petro Viet Nam Ca Mau Fertiliser JSC (DCM) and Phu My Fertiliser (DPM) haven’t introduced enterprise outcomes for the primary quarter of 2022, however based on SSI Analysis’s estimates, within the first quarter of this yr, DCM’s pre-tax revenue will attain VND1 trillion, up 6.6 per cent and Phu My Fertiliser’s revenue will attain VND1.8 trillion, up 10 occasions over the identical interval final yr, primarily due to the sturdy enhance in common fertiliser promoting costs.
In 2021, world commodity costs and fertilisers elevated sharply. Because the starting of this yr, the battle between Russia and Ukraine has pushed up fertiliser costs as a result of Russia – one of many main fertiliser exporting powers – has been topic to financial sanctions. Due to this fact, home fertiliser enterprises proceed to learn.
This yr, DCM units a income goal of VND9.05 trillion, consolidated revenue after tax of VND513 billion, down 10 per cent and 72 per cent respectively in comparison with 2021. This prudent plan was attributable to DCM’s concern that the Russia-Ukraine stress will proceed to negatively have an effect on the worldwide monetary market, making oil and freight costs enhance, thus provide might grow to be scarce.
Nonetheless, based on SSI’s forecast, this yr, DCM’s income will enhance by 31 per cent, revenue will rise by 40 per cent. Final yr DCM’s income and revenue elevated by 31 per cent and 190 per cent.
This yr, DCM will full transition tasks together with conversion and provide of uncooked CO2, analysis and growth centre and a venture to supply advanced fertiliser from molten urea. With a view to make sure the manufacturing enlargement and product diversification for long-term growth, Ca Mau Fertiliser additionally plans to put money into a Lengthy An wholesale warehouse, a micro-organic fertiliser manufacturing unit, a coal gasification plant and communications station headquarters in HCM Metropolis this yr.
With DPM, SSI Analysis additionally forecasts that DPM’s income and revenue this yr will enhance by 22 per cent and 25 per cent, respectively, up 65 per cent and 352 per cent final yr. Beforehand, Rong Viet Securities Firm additionally forecast that DPM could have constructive enterprise ends in the primary quarter of 2022 and will final till the second quarter of 2022 due to the short-term scarcity of urea provide attributable to tensions between Russia and Ukraine, resulting in increased fertiliser costs.
Though the outlook for the fertiliser business may be very shiny, analysts advocate that buyers shopping for fertiliser shares maintain an in depth eye on fertiliser value actions in relation to geopolitical fluctuations amid the Russia-Ukraine warfare. If there’s a constructive change in Russia’s export actions, world fertiliser costs might reverse sharply. In addition to, limiting exports to make sure home fertiliser provide can be a possible threat to fertiliser corporations’ enterprise actions.
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