DGC – Earnings surge 22% QoQ - Earnings Flash
  • 2024-07-22T00:00:00
  • Company Research
  • DGC reported its Q2 2024 results with revenue of VND2.5tn (+4% YoY; +6% QoQ) and NPAT-MI of VND842bn (flat YoY, +22% QoQ).
  • Overall, H1 2024 revenue and NPAT-MI are in line with our expectations, achieving 43% and 45% of our full-year forecasts, respectively. As a result, we see insignificant changes to our forecasts, pending a fuller review.
  • We expect DGC’s earnings to continue recovering in H2 2024, driven by the industrial phosphorus chemical (IPC) segment. This recovery is supported by a YoY surge in global chip sales, and chip manufacturers continue shifting input yellow phosphorus out of China, which should boost Vietnam’s yellow phosphorus demand. Notably, TSMC – the world’s largest semiconductor manufacturer – reported revenue increasing 28% YoY in H1 2024.
  • We estimate that in Q2 2024, P4 prices for East Asia and US customers remained at USD4,200/tonne, while prices for Indian customers edged down QoQ to USD3,650/tonnes (vs USD3,700/tonnes in Q1 2024). We expect the contributions from customers in East Asia and the US to continue rising, which should support ASP increasing during H2 2024 and beyond.
  • The ethanol factory is scheduled to come into operation in early Q4 2024, according to management. We forecast ethanol revenue in 2024F/25F of VND640bn (USD25mn) and VND1.5tn (USD60mn), respectively. In which, ethanol 2025F revenue includes 64,000 cbm of ethanol (full capacity) sold at VND20mn/cbm and VND200bn (USD8mn) of byproducts. 

DGC’s H1 2024 results

 

Q2 2023

Q1 2024

Q2 2024

YoY

H1 2023

H1 2024

YoY

H1 as % of 2024F

2024F

ASP* (VND mn/tonne)

78

72

N/A

N/A

81

N/A

N/A

N/A

72

Industrial phosphorus chemicals

109

96

N/A

N/A

115

N/A

N/A

N/A

98

Agricultural phosphates

46

47

N/A

N/A

48

N/A

N/A

N/A

46

Revenue

2,414

2,385

2,505

4%

4,897

4,889

0%

43%

11,413

In which:*

 

 

 

 

 

 

 

 

 

- Industrial phosphorus chemicals

1,477

1,272

N/A

N/A

3,095

N/A

N/A

N/A

6,374

- Agricultural phosphates

822

950

N/A

N/A

1,550

N/A

N/A

N/A

3,715

Gross profit

940

766

983

5%

1,831

1,749

-4%

46%

3,778

Selling expenses

-108

-105

-117

8%

-223

-222

0%

43%

-520

G&A expenses

-37

-40

-53

45%

-71

-94

32%

52%

-180

EBIT

796

621

813

2%

1,537

1,434

-7%

47%

3,078

Financial income

181

165

165

-9%

345

330

-4%

41%

797

Financial expense

-25

-18

-16

-36%

-45

-34

-24%

41%

-83

Others

1

1

-9

N/M

-1

-8

1177%

N/M

0

PBT

953

769

953

0%

1,837

1,722

-6%

45%

3,792

NPAT-MI

843

673

842

0%

1,630

1,515

-7%

45%

3,345

EBITDA

875

727

813

-7%

1,698

1,540

-9%

45%

3,439

Margin

 

 

 

 

 

 

 

 

 

GPM

39.0%

32.1%

39.2%

 

37.4%

35.8%

 

 

33.1%

SG&A as % of revenue

-6.0%

-6.1%

-6.8%

 

-6.0%

-6.5%

 

 

-6.1%

EBIT margin

33.0%

26.0%

32.5%

 

31.4%

29.3%

 

 

27.0%

NPAT-MI margin

34.9%

28.2%

33.6%

 

33.3%

31.0%

 

 

29.3%

EBITDA margin

36.3%

30.5%

32.5%

 

34.7%

31.5%

 

 

30.1%

Source: DGC, Vietcap

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