Vietnam chemical firms record sharp profit hikes in 2022

Major chemical producers Duc Giang Chemicals Group, Vietnam Apatite-Phosphorus JSC, and Lam Thao Fertilizers and Chemicals JSC have reported huge profits in 2022.

Duc Giang Chemicals Group (DGC), Vietnam's leading chemical company, recorded an after-tax profit of VND6,040 billion ($257.46 million), 2.4 times year-on-year, exceeding its plan by 72%.

The company's net revenue reached VND14,444 billion ($615.69 million), up 51%, overpassing its target by 19%.

As of December 31, 2022, DGC's total assets reached VND13,315 billion ($567.56 million), up 56% compared to the beginning of the year. The highlight of the asset structure is short-term financial investment (term deposit) reaching VND7,571 billion ($322.72 million), two times year-on-year.

Short-term receivables were VND916 billion ($39 million), up 17% and inventories were VND918 billion, down 34%.

On the Ho Chi Minh City Stock Exchange, the DGC share price was VND59,000 ($2.5) at Friday's closing session.

Meanwhile, Vietnam Apatite-Phosphorus JSC (VAPAC), DGC's subsidiary, recorded revenue of VND3,150 billion ($134.27 million) and after-tax profit of nearly VND965 billion ($41.13 million), up 97% and 276% respectively. These are the highest business results in the company's history.

Its revenue and profit in 2022 increased sharply mainly thanks to the sales prices of key products like yellow phosphorus, phosphorus slag and ferro, while production activities and consumption were not halted because of the Covid-19 pandemic, according to the company.

At the same time, cost of goods sold only increased by 60.5%, lower than the increase of 97.5% in revenue, helping the company's gross profit on sales and service provision increase sharply. Its financial income, including interest on deposits and interest on exchange rate differences, surged 246.2% compared to 2021.

As of December 31, 2022, VAPAC's total assets reached VND1,194 billion ($50.89 million), up 18% compared to the beginning of the year. Of this, cash and cash equivalents reached VND203 billion ($8.65 million), four times year-on-year. Inventories hit VND67 billion ($2.85 million), down 1.9 times compared to the beginning of the year.

VAPAC is listed on the Unlisted Public Company Market (UpCOM) as PAT. At Friday's closing session, the PAT share price hit VND89,200 ($3.8).

Lam Thao Fertilizers and Chemicals JSC (Lafchemco), a subsidiary of state-run chemical group Vinachem, reported after-tax profit of VND87.9 billion ($3.75 million), up 31% year-on-year. The company's net revenue reached VND3,156 billion ($134.53 million), up 12%.

As of December 31, 2022, the firm's assets reached VND2,281 billion ($97.21 million), down VND14.6 billion compared to the beginning of the year, while inventories were VND1,234 billion ($52.58 million), up 26%.

Lafchemco is listed on the Hanoi Stock Exchange as LAS. At Friday's closing session, the LAS share price was VND8,700 ($0.37).

Lam Thao Fertilizers and Chemicals JSC (LAFCHEMCO), a subsidiary of state-run chemical group Vinachem, reported after-tax profit of VND87.9 billion ($3.75 million), up 31%.

The company's net revenue reached VND3,156 billion ($134.53 million), up 12% year-on-year.

As of December 31, 2022, LAFCHEMCO's total assets reached VND2,281 billion ($97.21 million, down 14.6 billion compared to the beginning of the year, while inventories were VND1,234 billion ($52.58 million), up 26%.

LAFCHEMCO is listed on the Hanoi Stock Exchange as LAS. At Friday's closing session, the LAS share price was VND8,700 ($0.37).

Regarding business prospects for 2023, BIDV Securities Company (BSC) believes that the high base level is the biggest challenge for chemical enterprises. In the context that chemical prices have no clear motivation to surpass the peak price of 2022, growth drivers will stem from cutting production costs (vertical development) or expanding investment in traditional and new products (horizontal development).

BSC said private chemical enterprises would have more advantages than state-owned equivalents in expanding investment and development.

Previously, in January, state-run chemical group Vinachem had 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 billion ($2.65 billion), exceeding its plan by 19% and up 17% year-on-year.