- 2024-05-02T00:00:00
- Company Research
- DPM released its Q1 2024 results with revenue of VND3,307bn (+1% YoY; USD132mn) and reported NPAT-MI of VND264bn (+2% YoY; USD10.6mn). These results completed 24% and 40% of our respective full-year forecasts.
- We attribute the higher NPAT to 1) a higher proportion of the cheap input gas source from the Cuu Long basin in Q1 2024 (vs 100% from the expensive gas source in Q1 2023); 2) the urea segment’s higher-than-expected sales volume completing 28% of our full-year forecast; and 3) ASP was also better than our expectation despite the weaker YoY Middle East urea price.
- We see slight upside potential to our 2024F earnings forecast as the higher-than-forecasted sales volume and lower-than-expected input gas price might outweigh a potential downside adjustment to our Middle East urea price forecast as industry players expect a continuing downward trend for the urea price in Q2 after a weak Q1 (the average price was USD339/tonne in Q1 2024, -9% YoY).
- We note that both financial income and financial expenses decreased substantially and offset each other to help maintain solid PBT growth of 7.6% YoY. However, the income tax expense increased 45.3% YoY and brought NPAT down to flat YoY growth.
- We currently have a MARKET PERFORM rating for DPM with a target price of VND30,300/share.
DPM’s Q1 2024 results
VND bn | Q1 2023 | Q1 2024 | %YoY | % of Vietcap’s 2024F |
Input gas price (USD/MMBTU), including VAT* | 10.02 | 9.79 | -2.3% | 93% |
Urea average selling price (VND/kg)* | 9,600 | 9,800 | 2.1% | 105% |
Total urea sales volume (thousand tonnes)* | 213 | 240 | 12.6% | 28% |
Revenue | 3,265 | 3,307 | 1.3% | 24% |
COGS | (2,742) | (2,706) | -1.3% | 23% |
Gross profit | 523 | 602 | 15.1% | 33% |
Sales & marketing exp | (174) | (199) | 14.2% | 23% |
General admin (GA) exp | (94) | (105) | 11.8% | 23% |
Operating profit (EBIT) | 255 | 298 | 16.9% | 56% |
Financial income | 70 | 28 | -59.9% | 8% |
Financial expenses | (26) | (2) | -92.2% | 2% |
In which, interest expense | (17) | (0) | -99.4% | 0% |
Net other income/loss | 2 | (0) | N.M | -17% |
Profit before tax (PBT) | 301 | 324 | 7.6% | 40% |
Income tax expense | (39) | (56) | 45.3% | 41% |
NPAT | 262 | 268 | 2.1% | 40% |
Minority interests | (2) | (4) | 63.4% | 55% |
NPAT-MI | 260 | 264 | 1.6% | 40% |
EBITDA | 358 | 396 | 10.7% | 42% |
Source: DPM, Vietcap (* Vietcap estimates)
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