- 2024-01-30T00:00:00
- Company Research
- DPM announced weak Q4 2023 results with revenue of VND3.4tn (-13% YoY) and NPAT-MI of VND108bn (-91% YoY). Q4 2023 NPAT-MI jumped 1.7x from weak NPAT-MI of VND64bn in Q3 2023, which is mainly due to 1) a 7% higher estimated urea average selling price (ASP) QoQ and 2) a 4% lower estimated input gas cost QoQ.
- Q4 2023 blended gross margin was weak at 9.8% vs 12.7% in Q3 2023, which we primarily attribute to 1) a loss in the imported goods segment (mainly due to low selling prices stemming from tough competition) and 2) a loss in the NPK segment (mainly due to high raw material costs, high depreciation expenses, and tough competition from imported products).
- In 2023, DPM recorded revenue of VND13.6tn (-27% YoY) and NPAT-MI of VND533bn (-90% YoY). The sharp decline in NPAT-MI was caused by estimated urea ASP declining 40% YoY and estimated input gas costs increasing 19% YoY, outweighing estimated urea sales volume rising 8% YoY.
- 2023 NPAT-MI is equivalent to 74% of our forecast chiefly due to 1) 20% higher-than-expected GA expenses, 2) a loss in the imported goods segment vs our expectation for this segment to generate VND61bn of gross profit, and 3) lower-than-expected urea sales volume.
- The average Middle East urea price was USD358/tonne (-49% YoY) in 2023 – in line with our forecast of USD360/tonne. In addition, DPM’s estimated urea ASP in 2023 of USD390/tonne is in line with our forecast of USD389/tonne.
- We foresee downside risks in our 2024F NPAT-MI forecast, pending a more comprehensive review.
- We currently have a MARKET PERFORM rating for DPM with a target price of VND31,500/share.
DPM’s Q4 2023 & 2023 results
VND bn | Q4 2023 | YoY | 2023 | YoY | % of Vietcap’s 2023F |
Input gas price (USD/MMBTU), including VAT* | 10.8 | 22% | 10.6 | 20% | 100% |
Urea average selling price (VND/kg)* | 9,934 | -30% | 9,440 | -39% | 100% |
Total urea sales volume (thousand tonnes)* | 169 | 12% | 860 | 9% | 96% |
Revenue | 3,382 | -13% | 13,569 | -27% | 109% |
COGS | -3,050 | 35% | -11,917 | 10% | 112% |
Gross profit | 332 | -80% | 1,652 | -79% | 89% |
Sales & marketing exp | -228 | -24% | -848 | -13% | 100% |
General admin (GA) exp | -150 | -28% | -502 | -10% | 121% |
Operating profit (EBIT) | -45 | -104% | 301 | -95% | 50% |
Financial income | 175 | 20% | 458 | 25% | 128% |
Financial expenses | -13 | -34% | -71 | -17% | 68% |
Share profit/loss from associates | 0 | -69% | 3 | 0% | 100% |
Net other income/loss | -3 | N.M. | 1 | -95% | 5% |
Profit before tax (PBT) | 114 | -91% | 691 | -90% | 79% |
NPAT | 107 | -91% | 543 | -90% | 75% |
NPAT-MI | 108 | -91% | 533 | -90% | 74% |
EBITDA | 58 | -95% | 704 | -90% | 71% |
Source: DPM, Fiinpro, Vietcap (* Vietcap estimates)
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