Company Quarterly Earnings Update – DPM VN – 2021 Q1

Summary of the 2021 Q1 results of Phu My Fertilizer (DPM VN)

Q1/2021 results: highlights

  • Net revenue increased by 14.6% y/y mainly thanks to (i) an increase of 6.7% y/y in the selling price of urea while its volume remained almost unchanged, and (ii) an increase of 136.4% y/y in in-house NPK volume though its contribution to total sales was still small. The urea factory was running at full capacity in the first quarter while the NPK plant was operating at approximately 40% capacity.
  • The gross margin improved by two percentage points in Q1/2021 versus Q1/2020 mainly thanks to higher utilization of the NPK plant. On the other hand, the margin of the urea business as a whole shrank as input gas prices outpaced the recovery of urea prices. All in all, net profit advanced by 62.9% y/y to VND 170bn.
  • DPM’s cash and cash equivalent were VND3,974bn, accounting for 36.3% of its total assets. Financial leverage was low with a D/E of 0.12x.


  • Globally urea prices have surged since the beginning of 2021, reflecting higher feedstock prices (coal, natural gas) and rising crop prices. As for the Vietnamese market, any changes to the price of urea in Q1 were quite insignificant, however since April the price has begun to rise strongly. We think the domestic urea prices will stay at their current high level before softening in Q4/2021.
  • We believe the company’s profitability will expand significantly in the coming quarters thanks to the current rise in domestic urea prices. We maintain a nearly unchanged outlook for 2021 revenue which is expected to increase by 15.8% y/y, while revising up net profit by 7.5% to VND893bn, up 29.3% y/y. The projected net profit will include an extraordinary income of VND115bn from the insurance claim.
  • For 2022, we forecast net profit to decline by 20.1% y/y to VND714bn due to lower urea prices and no one-off insurance claim. Without the one-off impact, 2022’s net profit should decrease by 11.2% y/y instead.

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