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Fertilizer industry – Q2/2025 business results are outstanding and 2H2025 is expected to grow strongly

• The Q2/2025 business results of fertilizer enterprises all recorded growth in revenue with the Urea, NPK, and DAP segments outperforming phosphate fertilizers. However, NPAT-MI has a differentiation from DAP>Phosphorus>Urea>NPK fertilizer enterprises mainly due to the growth of selling prices of DAP, Phosphorus>Urea and NPK fertilizers.
• Urea selling prices have grown while input prices have decreased mainly due to the influence of world selling prices. World selling prices have increased recently due to the following events:
o In June 2025, the Iran-Israel conflict disrupted Egypt's Urea supply chain, limiting regional supplies.
o After the conflict cooled down in August, the United States imposed reciprocal tariffs on urea fertilizer imports, which increased the price of urea in the United States, indirectly putting pressure on urea prices in the Middle East to increase.
o At the same time in August, India increased imports at high prices to help maintain the peak season in July-August accompanied by favorable weather conditions
• The selling price of phosphate fertilizer and DAP increased mainly due to the sharp increase in the cost of pushing from the price of raw materials, sulfuric acid.
• In 2H2025, we expect revenue to increase thanks to the growth in production and selling prices of fertilizers.
o The average selling price in 2H2025 of Urea fertilizer is expected to reach 13,000 VND/kg (+30% YoY), NPK price will reach 13,500 VND/kg (+10% YoY) and DAP price will reach 18,000 VND/kg (+30% YoY).
o Urea production increased thanks to exports to markets while domestic growth slowed down. NPK production increased due to stable demand from industrial crops as well as DCM's new marketing strategy and increased capacity from DPM. Imported fertilizer production also grew strongly thanks to high selling prices.
• In 2H2025, the gross profit margin of Urea fertilizer businesses is expected to grow more strongly than that of enterprises in the field of DAP and NPK fertilizers. The reason is that the selling price of Urea has increased while the cost of input materials, which is gas prices, tends to decrease. Meanwhile, for DAP fertilizer, although the selling price tends to increase, the cost of input materials such as sulfuric acid also increases accordingly, thereby limiting the ability to improve profit margins.