Ca Mau Fertilizer profit down 85% in Q1

The PetroVietnam Camau Fertilizer JSC (PVCFC) reported a profit of VND230 billion ($9.8 million) in the first quarter, a decrease of 85% year-on-year, marking its lowest quarterly profit in the past two years.

The profit equals to pre-peak levels. In the first quarter of last year, PVCFC made a profit of nearly VND17 billion ($724,500) per day thanks to record-high fertilizer prices. The firm's after-tax profit last year hit VND4.28 trillion ($181.36 million), up 2.3 times year-on-year.

The firm, also known as Ca Mau Fertilizer with the stock market sticker DCM, saw revenue in Q1/2023 decline by 30% to VND2.8 trillion ($119.33 million).

Of this, urea fertilizer accounted for VND2.29 trillion ($97.59 million), or 81%. Sales of this item declined by nearly 40% in Q1 as prices dropped by more than 32%. Domestic sales of the item reached VND1.41 trillion ($59.88 million), down 11% year-on-year, while exports hit VND884 billion ($37.67 million), down 60%.

At the end of March, PVCFC's total assets had increased by VND405 billion ($17.26 million) to VND14.57 trillion ($621 million) compared to the beginning of the year, of which short-term assets accounted for 85%. Cash and cash equivalents increased by 12% to VND2.39 trillion ($101.68 million).

According to Sacombank Securities (SBS), the firm passed its profit peak recorded last year as global prices of urea fertilizer continuously fell sharply to $335 per ton, down nearly 70% from the peak in mid-April last year, and this shows no sign of stopping.

The broker said producers in Europe expanded production thanks to lower raw material and fuel prices when natural gas and LNG imports were abundant, while supplies from Russia and China had increased sharply recently, affecting the domestic market.

Sacombank Securities argued that the situation will be a big challenge for PVCFC, while more urea exports from China and Russia to the local market will put more pressure on the business.

PVCFC, a subsidiary of state-run Petrovietnam, early this year set very low business targets for 2023 after a year of record profits.

It set an after-tax profit target of VND1.38 trillion ($58.59 million) in 2023, down 67% year-on-year, on a revenue of VND13.46 trillion ($570.17 million), up 15%.

DCM closed Friday's session at VND23,700 ($1.01), up 2.4% from the day before.