DPM – Lower earnings in 2023 but attractive cash dividend
- DPM announced its preliminary result with VND 19,400 bn (+51.8% YoY) in revenue and VND 6,400 bn (+69.1% YoY) in PBT due to high global Urea price. The average selling price of Urea (ASP) is estimated at VND15,200 per kg, up 44%. DPM also recorded an additional tariff of USD 18 mn (VND 430 bn) in 2022.
- We anticipate a cool down in Urea price for 2023 as production cost is likely to ease and the supply will increase. According to Argus, Urea price is around 400 USD/ton –500 USD/ton in 2023, compared to the highest level of 1,000 USD/ton in 2022. Revenue and NPATMI are forecasted to post VND14,373bn (-25.9% YoY) and VND3,028bn (-40.6% YoY) respectively in 2023. Before that, DPM has released 2023 guideline with VND17,400 bn in revenue and VND2,700bn in net profit.
- Despite the lower earnings in 2023, DPM is able to pay high cash dividend based on the positive profit in previous years. EGM 2022 has approved 2022 cash dividend of VND7,000. We belive that the fair value of DPM should be VND40,700
PetroVietnam Fertilizer and Chemicals Corp. PetroVietnam Fertilizer and Chemicals Corporation is a Vietnam-based manufacturer of agricultural chemicals. It manufactures and trades diversified fertilizer products, including urea fertilizers; nitrogenous phosphatic potassic (NPK) fertilizers, liquefied ammonia, as well as other industrial gases and chemicals used for oil and gas exploration and refinery. The Company is also involved in the provision of technical services in fertilizer and petrochemical production.
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