After 1H2024, DPM has reached 93% of its 2024 after-tax profit target.

Promote restructuring

In the first months of 2024, DPM faced several challenges because of rising natural gas prices and high transportation costs, while urea prices fell substantially due to sluggish demand in important markets. In this circumstance, DPM continues to restructure its organizational structure, update business strategy, renovate business models, and manage risk.

In 2H 2024, DPM sets the duty of running factories safely and efficiently. Priority will be devoted to cutting expenses and increasing product quality. At the same time, it will explore adapting its business strategy and distribution systems to the present market conditions. As a result, DPM will pursue all export prospects in order to alleviate local market overstock pressure.

Positive changes

In the face of a challenging market and attempts to reform its operation system, DPM's business outcomes in the first half of 2024 surpassed expectations and anticipated goals.

Specifically, net sales revenue and after-tax profit in the second quarter were VND3,948 billion and VND235.5 billion, respectively, rising 6.5% and 123% from the same period last year. DPM's after-tax profit for the first six months of this year was VND503 billion, rising 37% from the same period last year and accounting for 93% of the annual plan.

By the end of the second quarter of 2024, this enterprise's total assets will exceed VND15,700 billion. Meanwhile, its equity rose to VND12,000 billion.

What outlook for DMP?

In the first six months of 2024, DPM's urea consumption production reached 501,000 tons, increasing 4% over the same time the previous year. NPK fertilizer output reached 87 thousand tons, completing 61% of the annual goal and increasing 21% year on year.

The growth is fueled by excellent weather conditions for agricultural production and increased fertilizer affordability as global fertilizer costs fall. NPK usage is also predicted to rise in 2024, owing to DPM's reorganization, which reduced selling prices and increased farmers' purchasing power.

This rebound reflects a strong increase in consumption demand, as China continues to implement its strategy of limit ing urea exports and lowering production capacity in other countries. The local market is boosted by a favorable global mood and increased purchasing power as Southern Vietnam enters the rainy season following a lengthy heat wave. Furthermore, the steady rise in agricultural prices has contributed to a major improvement in farmers' affordability.

SSI research estimates that the average urea price of VND10,100/kg will provide significant income and profit for DPM. In terms of NPK, current consumption production is estimated to recover to 150,000 tons and 165 thousand tons in 2024 and 2025, respectively, representing 60% and 66% of DPM's working capacity. The average NPK selling price is predicted to rise at a far slower rate than the urea selling price, since DPM is likely to retain a competitive pricing strategy to sustain consumption output. DPM's income from commercial fertilizers is expected to grow by 1% and 8% in 2024 and 2025, respectively.