DCM released robust H1 2021 results with revenue and NPAT-MI rising 29.3% YoY and 21.6% YoY, respectively, driven by average urea price growth of ~25%-35% that outweighed the impact of a 45.8% YoY input cost increase and sales volume decrease of 2.5% YoY.

- In Q2 2021, DCM’s revenue and NPAT-MI were up 22.5% YoY and 6.5% YoY, respectively. Q2 2021 NPAT-MI was almost double vs Q1 2021 due to a urea price rally — despite slightly lower volume compared to Q1 2021 — and a contribution from new NPK products. 

- Due to COVID-19, the NPK plant has not finished the acceptance testing phase to officially enter operation in Q2 2021. Nevertheless, DCM delivered 18,000 tons of NPK produced in a trial run, which was welcome by farmers and supported DCM’s Q2 2021 profit. 

- General administration expenses in H1 2021 doubled YoY and completed 74.4% of our 2021F forecast as DCM allocated ~VND50bn (USD2mn) of expenses for the science fund in Q2 2021.  

- These results were higher than our expectation with H1 NPAT-MI achieving 82.5% of our full-year forecasts, driven by stronger-than-expected urea prices. We foresee upside to our current forecast, pending a fuller review.