- 2024-10-30T00:00:00
- Company Research
- DPM announced its Q3 results with revenue of VND3.1tn (USD123mn, -4% YoY) and NPAT-MI of VND63bn (USD2.5mn, -2% YoY). We attribute the slight revenue contraction to the 13% YoY decline in total urea sales volume, down to 184k tonnes, which was partially offset by our estimated 5% YoY higher ASP. Despite GPM contracting by 103bps to 11.7%, the bottom line shared the same movement with revenue due to 5x YoY higher financial income (mainly from interest income).
- For 9M, DPM’s revenue was VND10.3tn (USD412mn, +1% YoY) and its NPAT-MI reached VND558bn (USD22.3mn, +31% YoY), completing 72%/76% of our respective full-year forecasts. 9M total urea sales volume was 685k tonnes (-1% YoY) while our estimated ASP ticked up by 4% YoY; these factors led to flat YoY revenue. However, NPAT-MI expanded stronger than revenue due to (1) a 162bps expansion in GPM and (2) lower taxes; these factors together outweigh the higher YoY SG&A expenses, primarily from administrative, marketing, and promotion expenses.
- Overall, 9M total urea and NPK sales volume complete 76%/77% of our full-year forecasts. We see insignificant changes to our 2024F NPAT-MI projection, pending a fuller review, as higher-than-expected gross profit and financial income might offset high SG&A expenses.
- We currently have a BUY rating for DPM with a target price of VND39,700/share.
DPM’s 9M 2024 results
VND bn | Q3 2023 | Q3 2024 | % YoY | 9M 2023 | 9M 2024 | % YoY | % of Vietcap’s 2024F |
Input gas price (USD/MMBTU), including VAT* | 11.3 | 10.6 | -6% | 10.4 | 10.8 | 3% | 100% |
Urea average selling price (VND/kg)* | 9,266 | 9,700 | 5% | 9,276 | 9,634 | 4% | 99% |
Total urea sales volume (thousand tonnes)* | 211 | 184 | -13% | 691 | 685 | -1% | 76% |
Revenue | 3,216 | 3,077 | -4% | 10,187 | 10,332 | 1% | 72% |
COGS | -2,808 | -2,718 | -3% | -8,868 | -8,827 | 0% | 72% |
Gross profit | 408 | 359 | -12% | 1,319 | 1,505 | 14% | 76% |
Sales & marketing exp | -216 | -233 | 8% | -620 | -651 | 5% | 83% |
General admin (GA) exp | -130 | -166 | 28% | -353 | -391 | 11% | 85% |
Operating profit (EBIT) | 62 | -40 | N.M. | 346 | 464 | 34% | 62% |
Financial income | 27 | 159 | 483% | 282 | 239 | -15% | 90% |
Financial expenses | -16 | -25 | 56% | -58 | -34 | -41% | 159% |
In which, interest expense | -14 | -18 | 27% | -46 | -22 | -52% | N.M. |
Net other income/loss | 1 | 2 | 131% | 4 | 4 | -14% | -4% |
Profit before tax (PBT) | 75 | 95 | 26% | 577 | 674 | 17% | 75% |
Income tax expense | -6 | -27 | 326% | -141 | -102 | -27% | 67% |
NPAT | 69 | 66 | -3% | 436 | 570 | 31% | 77% |
Minority interests | -4 | -3 | -22% | -11 | -12 | 9% | 162% |
Rerpoted NPAT-MI | 64 | 63 | -2% | 425 | 558 | 31% | 76% |
EBITDA | 161 | 58 | -64% | 647 | 758 | 17% | 66% |
| Q3 2023 | Q3 2024 | ppt Δ | 9M 2023 | 9M 2024 | ppt Δ |
|
Gross profit margin | 12.7% | 11.7% | (1.03) | 13.0% | 14.6% | 1.62 |
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Source: DPM, Vietcap (* Vietcap estimate)
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