Press Release: PVFCCo determinately deployed management, production and business solutions, and achieved positive outcomes over the first 6 months of 2018


HCMC, August 2nd, 2018- PetroVietnam Fertilizer and Chemicals Corporation (PVFCCo - Security Code: DPM) said that despite of facing challenges from rising gas prices and fiercer competition, PVFCCo has made efforts to synchronously implement solutions and achieved positive results over the first 6 months of 2018.

 In terms of gas input, because of being affected from increased gas prices, in the first 6 months of 2018, the input gas prices for PVFCCo's production have increased by about 19% over the same period in 2017 and more than 24% over the planned price in 2018. Specifically, the average gas price in 2017 is US$5,027/million BTU, the planned gas price for 2018 is US$4,906/million BTU and the estimated gas price in the first 6 months of 2018 is US$6.07/million BTU (above prices including VAT and freight charges). In addition, cheaper imported fertilizers continue to pour into the Vietnamese market, in which the volume of imported ureawas estimated at 261 thousand tons, increased by 16.2% over the same period of 2017 (according to data from MARD).

Facing such challenges, PVFCCo has actively implemented projects and determinately made efforts in production and business management. On the implementation of the projects, important projects were basically completed, contributing positively to the growth of PVFCCo. The NH3 unit revampedproject has been handed over and officially operated from Quarter 1 of 2018. Phu My NPK Chemical Technology Plant has basically completed the commissioningphase and is ready to be put into commercial operation in the Quarter 3 of 2018. The completion of these two projects significantly contributed to PVFCCo's business performance and profitability in the first half of this year.

Business outcomes are very positive with the financial business targets exceeding the plan. Specifically, production output of Phu My Fertilizer Plant in the first 6 months of 2018 is estimated at 427 thousand tons, fulfilling 108% of the plan for the first 6 months and 53% of the plan for whole this year. Salesof Phu My urea products in the first 6 months was estimated at 437 thousand tons, fulfilling 53% of the plan for the whole year. Other fertilizers’ sales were estimated at 195,000 tons, gaining 151% of the plan for 6 months and fulfilling 87% of the plan for the whole year. Especially, although just operating in the commissioningphase, Phu My NPK products from Phu My NPK Chemical Technology Plant have reached the commercial standards, have been launched to the market about 22,000 tons and warmly received by farmers. Chemical segment also achieved positive outcomes, in which NH3 sales increased sharply, reached over 21 thousand tons, increasing 235% over the same period because PVFCCo has officially operated a NH3 Unit’s revamped line from the beginning of the year 2018. In addition, in the first 6 months of 2018, PVFCCo has sold more than 27,000 tons of other chemical products including UFC85, CO2 and petrochemicals.

Overview of Phu My Urea Plant

Total revenue in the first 6 months of 2018 reached VND4,841 billion, fulfilling 108% of the plan for 6 months, 56% of the plan for the whole year, increasing 9% over the same period. Profit before tax reached VND465 billion, fulfilling 201% of the plan for 6 months, and 105% of the plan for the whole year. Profit exceeded the set-out plan mainly due to brand advantages, so the business outputs are increased, selling price of Phu My-branded fertilizer products and chemicals are higher than the average price of same products on the market and the planned price, specifically: The selling price of Phu My urea products increased by 5%, other fertilizer products increased by 13%, UFC85 increased by 23% and other chemicals increased by 15%. At the same time, the operating efficiency of machinery at the factory has reached maximum level, the time of stopping the machine is less, so the fuel consumption is lower than the norm..

Regarding the business plan for the last 6 months of 2018, based on the situation of the market as well as business performance in the first 6 months, PVFCCo has set a profit target for the last 6 months of the year to be lower than the first 6 months because the NPK project is started to be depreciated after the official acceptance and operation, and the market has passed the largest fertilizer consumption period as the summer-autumn/rainy season. With this forecast, PVFCCo's total revenue in 2018 is estimated at VND8,954 billion and pre-tax profit is estimated at VND676 billion, surpassing 4.4% and 53% of the targets approved by the General Meeting of Shareholders. PVFCCo will maximize its advantages, overcome difficulties and obstacles to achieve the best profits and ensure the benefits for shareholders.

Phu My fertilizers are warmly received by farmers

Apart from production and business activities, PVFCCo has always focused on the investor relationship, providedtimely, full and accurate information on the company's activities to all shareholders and investors. However, in recent times, some PVFCCo’s shareholders as individuals and organizations have presented inaccurate, one-sided information, and expressed their personal opinions, lacking contribution to PVFCCo's management activities and business performances, although PVFCCo had previously discussed, explained and provided information to them in accordance with the law. Spreading unreasonable views and opinions can have a negative impact on PVFCCo's image, as well as DPM shares. In this regard, PVFCCo has also timely announced official information at the link: so that the media, shareholders and investors can grasp the full nature of the issue, and from which, make objective, right and sense-of-justice reflections.