- 2024-10-23T00:00:00
- Company Research
- DGC announced its Q3 2024 results with revenue of VND2.6tn (+2% QoQ; +4% YoY) and NPAT-MI of VND706bn (-17% QoQ; -7% YoY). Overall, 9M 2024 revenue and NPAT-MI fulfill 69% and 67% of our full-year forecasts, respectively. We foresee minimal changes to our forecasts, pending a fuller review.
- In Q3 2024, sales of industrial phosphorus chemicals (IPC) grew 23% QoQ, mainly due to a 53% increase in P4 sales volume, supported by customers restocking as their inventories reached a healthy level. We expect the IPC segment to continue recovering moving forward, driven by improving orders and P4 selling prices.
- For agricultural phosphates (AP), in Q3 2024, DGC converted all WPA into fertilizers, which benefit from geographical advantages in the domestic market. We expect the company to continue maintaining this strategy for the rest of 2024.
- GPM fell to 34.5% in Q3 2024, down from 39.2% in Q2 2024. This decline was caused by a 5% QoQ decrease in P4 prices and a 20-25% rise in input apatite ore prices, as the ore supply was disrupted by Typhoon Yagi, capping the ore mining volume quota.
- SG&A/revenue rose to 8.1% in Q3 2024, compared to the 6.1% average from 2021 – H1 2024, mainly due to a spike in shipping costs from July to August. However, we expect this ratio to normalize in Q4 2024, as shipping costs have been declining since September.
- Additionally, financial income fell to VND151bn in Q3 2024 (-26% YoY; -9% QoQ), which further contributed to the company’s slightly lower-than-expected earnings.
- We maintain our expectations for DGC’s ethanol factory to begin operating and its chlor-alkali project to begin construction in Q4 2024.
DGC’s 9M 2024 results
| Q3 2023 | Q2 2024 | Q3 2024 | QoQ | YoY | 9M 2023 | 9M 2024 | YoY | 9M 2024/2024F | 2024F |
ASP (VND mn/tonne) | 70 | 74 | 75 | 0% | 7% | 77 | 74 | -4% | 102% | 73 |
Industrial phosphorus chemicals | 95 | 98 | 93 | -5% | -2% | 108 | 96 | -11% | 98% | 98 |
Agricultural phosphates | 45 | 49 | 57 | 10% | 26% | 47 | 52 | 11% | 110% | 47 |
Revenue | 2,464 | 2,505 | 2,558 | 2% | 4% | 7,360 | 7,447 | 1% | 69% | 10,757 |
In which: |
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- Industrial phosphorus chemicals | 1,494 | 1,291 | 1,581 | 23% | 6% | 4,589 | 4,144 | -10% | 71% | 5,871 |
- Agricultural phosphates | 902 | 1,014 | 829 | -23% | -8% | 2,452 | 2,849 | 16% | 71% | 4,002 |
Gross profit | 840 | 983 | 881 | -10% | 5% | 2,670 | 2,630 | -1% | 71% | 3,727 |
Selling expenses | -118 | -117 | -168 | 44% | 43% | -340 | -390 | 15% | 76% | -514 |
G&A expenses | -39 | -53 | -40 | -25% | 2% | -110 | -133 | 21% | 78% | -171 |
EBIT | 683 | 813 | 673 | -17% | -1% | 2,220 | 2,107 | -5% | 69% | 3,042 |
Financial income | 203 | 165 | 151 | -9% | -26% | 549 | 481 | -12% | 61% | 793 |
Financial expense | -22 | -16 | -22 | 39% | 2% | -67 | -56 | -16% | 71% | -80 |
Others | -1 | -9 | -2 | -81% | 90% | -2 | -10 | 535% | N/M | 0 |
PBT | 864 | 953 | 800 | -16% | -7% | 2,701 | 2,522 | -7% | 67% | 3,756 |
NPAT-MI | 761 | 842 | 706 | -16% | -7% | 2,391 | 2,221 | -7% | 67% | 3,313 |
EBITDA | 777 | 919 | 760 | -17% | -2% | 2,474 | 2,406 | -3% | 71% | 3,402 |
Margin |
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GPM | 34.1% | 39.2% | 34.5% |
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| 36.3% | 35.3% |
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| 34.6% |
SG&A as % of revenue | -6.4% | -6.8% | -8.1% |
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| -6.1% | -7.0% |
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| -6.4% |
EBIT margin | 27.7% | 32.5% | 26.3% |
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| 30.2% | 28.3% |
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| 28.3% |
NPAT-MI margin | 30.9% | 33.6% | 27.6% |
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| 32.5% | 29.8% |
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| 30.8% |
EBITDA margin | 31.5% | 36.7% | 29.7% |
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| 33.6% | 32.3% |
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| 31.6% |
Source: DGC, Vietcap
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