Fertiliser producers toast to 2021's buoyant business

Lam Thao Fertilisers and Chemicals JSC (LAS) just announced its fourth-quarter financial statement which saw its Q4/2021 accrued profits from sales and services provision shedding 34 per cent on-year to just more than $3.73 million as the growth of capital expenditure outpaced that of net income.

After cost deduction, the company posted $348,000 in Q4 post-tax profit, shedding 76 per cent compared to one year ago.

Similarly, DAP-Vinachem JSC (DDV) caught $31.3 million in net revenues in Q4, equal compared to one year ago due to a sharp rise in capital expenditure. The soaring material cost had overshadowed the company’s Q4 profit. Accordingly, DDV just counted nearly $1.43 million in post-tax profit in the fourth quarter last year, down 42 per cent on-year.

Soaring fertiliser prices in 2021, particularly in the first three quarters, were attributed to the undersupply on the global scale, and to countries like China and Russia that had exercised restricting policies for fertiliser exports.

Notwithstanding, both LAS and DDV eyed sharp growth in 2021’s first three quarters thanks to upbeat business performance. Accordingly, LAS posted $126.3 million and $2.91 million in post-tax profit in 2021, up 22 per cent in revenue and more than double in profit on-year.

Meanwhile, DDV raked in $125 million in net revenue in 2021, soaring 52 per cent on-year and nearly $8.34 million in post-tax profit, a six-fold increase on-year.

Earlier, DDV's and LAS’ parent company Vietnam Chemical Corporation (Vinachem) said that its many units closed in 2021 with a bang, such as Southern Fertiliser JSC that posted a 12-fold increase, or Viet Tri Chemical JSC that saw a two-fold increase in their 2021 profits.

Several other fertiliser firms have announced healthy business results in 2021 albeit without making their financial statements public.

Along with this, Phu My Fertiliser JSC reaped $557.6 million in total revenues and $156.5 million in pretax profits, up 63 per cent in revenues and 324 per cent in pre-tax profit compared to 2020.

With such results, the company surpassed its 2021 revenue target by 54 per cent, and its 2021 profit target 8.2-fold, setting its 10-year record in terms of profits.

Similarly, Ca Mau Petroleum Fertiliser JSC (DCM) just recorded a record profit in its history reaching $79.13 million in 2021, triple the 2020 level.

The company’s total revenue surpassed $434 million last year, equalling a 30-per-cent jump on-year. Although DCM had revised its revenue and profit, which rose four-fold compared to those set early in the year, its actual revenue and profit figures had far outstripped revised levels.

Soaring fertiliser prices in 2021, particularly in the first three quarters, were attributed to the undersupply on the global scale, and to countries like China and Russia that had exercised restricting policies for fertiliser exports.

The fertiliser price is forecast to still peak at a high level this year. Growth from fertiliser firms, however, would catch a pause as it would be hard for the product price to further go up remarkably, and the government might take measures to stabilise the local fertiliser market.