Ca Mau Fertilizer’s Q3 profit sinks to 4-year low

Petrovietnam Ca Mau Fertilizer JSC reported a profit of only VND74 billion ($3 million) in the third quarter of 2023, equivalent to 10% of the figure posted in the same period last year and marking its lowest level in four years.

Ca Mau Fertilizer (PVCFC), listed on the Ho Chi Minh Stock Exchange (HoSE) as DCM, posted a net revenue of VND3.01 trillion ($122.48 million), down 9% year-on-year, according to its Q3 financial statement.

Its gross profit was VND177 billion ($7.2 million), or 17.6% of the same period last year, with gross profit margin plunging to 5.9%.

The company’s revenue from financial activities surged from VND81 billion to VND200 billion ($8.14 million).

Sales in Q3 increased by more than 36%, but fertilizer prices decreased sharply compared to the peak in 2022. Sales costs rose 31.5% as it stepped up promotions, market expansion and export activities.

In the first nine months, PVCFC’s revenue reached over VND9 trillion ($366.23 million), down 21% year-on-year, because urea export turnover halved from VND4.26 billion to VND2.08 trillion ($84.64 million).

The bright spot came from financial activities when deposit interest soared to VND399 billion ($16.24 million) in the first nine months of the year from VND172 billion in the same period last year; and profit from exchange rate fluctuations rose to VND64.5 billion ($2.62 million) from VND45 billion, respectively.

However, the fertilizer producer's nine-month net profit still plummeted by 81.2% to VND614 billion ($25 million).

By September 30, Ca Mau Fertilizer had nearly VND10 trillion ($406.9 million) in cash and deposits, an increase of VND879 billion compared to the beginning of the year and accounting for 67% of total assets.

Bao Viet Securities (BVSC) expected that PVCFC's depreciation costs will decrease significantly from Q4. This will contribute to improving the company’s profits in 2024. Each year, the firm spends about VND1-1.2 trillion ($48.83 million) on depreciation costs.

Ca Mau Fertilizer had almost no long-term debt while its short-term debt is VND292 billion ($11.88 million).

PVCFC, a subsidiary of state-owned 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%.

On the stock market, DCM closed Thursday’s session at VND27,900 ($1.13), down 6.84% from the previous day.