Chemical giant Vinachem reaps record profit on surging prices

State-run chemical group Vinachem reported a consolidated profit of VND6,023 billion ($256.8 million) in 2022, up 2.8 times year-on-year and a record high thanks to inflated fertilizer prices.

The company's revenue was estimated at VND62.262 trillion ($2.65 billion), exceeding its plan by 19% and up 17% year-on-year, Vinachem leaders said at a year review meeting on Friday.

Some Vinachem units posted strong revenue growth, including Viet Tri Chemical JSC (up 66%), Ninh Binh Nitrogenous Trogenous Fertilizer Ltd. Company (48%), Habac Nitrogenous Fertilizer & Chemicals JSC (43%), South Basic Chemicals JSC (36%), and DAP2 - Vinachem JSC (22%) compared to 2021.

In 2022, Vinachem paid VND2,052 trillion ($87.5 million) to the state budget. The average income of employees reached VND13 million ($554) per month, up 8% year-on-year.

The corporation produced and supplied nearly 3.03 million tons of fertilizer to the market, 3.73 million car tires, 2.3 million kWh of batteries, and nearly 280,000 tons of detergents and chemical products to serve the market.

Its total import-export turnover reached $783 million, up 15% compared to 2021. Of this, total export value reached $484 million, up 27% year-on-year, while imports hit $299 million, equal to 2021.

Vinachem leaders said that the world fertilizer price in 2022 had increased in all markets. For instance, the price of DAP was up to $1,000 per ton, while it was $900 per ton for urea nitrogen in Asia.

Therefore, the price of some key fertilizer products of Vinachem like urea, DAP and NPK have remained stable at a high level, which should help the domestic fertilizer industry to continue to develop well, they added.

However, Vinachem also said it has been affected by global uncertainties, global inflation pressure and the Russia-Ukraine conflict.

General director Phung Quang Hiep said that the group's departments need to actively develop and implement digital transformation plans. At the same time, they should continue to closely follow the group's restructuring project for 2021-2025 as a basis for implementing its five-year plan and development strategy.

Especially, for fertilizer - the group's key businss line, he asked member units to bolster sales on both traditional and new markets and reduce inventories.

VnDirect Securities, a leading securities broker, expects global fertilizer prices to decrease because prices in North America have dropped sharply since March. Besides, China has approved an increase in yellow phosphorus capacity by 356,000 tons per year for the 2023-2024 period from 1.4 million tons. Therefore, the price of this item will cool in 2023, the broker said.

Viet Capital Securities (VCSC) believes that urea prices will continue to stay high in the period 2022-2023 due to high gas and coal prices given they are the main input materials.