SFG’s 2024 Annual General Meeting of Shareholders was held on the morning of April 19th in Nha Be district, Ho Chi Minh City
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The supply of apatite is very scarce
Speaking at the meeting, Chairman of the Board of Directors of Southern Fertilizer Joint Stock Company (HOSE: SFG) Mr. Nguyen Van Quy said that the current world situation is greatly affecting domestic manufacturing enterprises, especially fertilizer businesses. Issues related to oil prices… are all very difficult to predict.
For the Vietnam Chemical Group, including the fertilizer manufacturing companies, the signals for 2024 are better than those for 2023.
“In the first 6 months of this year, the chemical industry is showing more favorable conditions, while the same period last year was very difficult. At that time, most of the fertilizer production units of the Vietnam Chemical Group almost made losses”, Mr. Quy shared.
Another difficulty is that the superphosphate product of SFG or the fertilizer production units with raw materials from apatite ore are facing challenges in supply. From the beginning of the year, the shortage of ore has made the situation difficult, but the Company has promptly found a solution.
According to SFG’s Chairman, unexploited apatite ore is not available this year and the Company is applying a solution to improve the technology to run ore. However, the transportation of the selected ore to the South is extremely difficult due to the humidity problem.
“We would like to report to the shareholders that after our assessment in late 2023, we have developed proactive solutions. When we run out of ore, we switch to technology to run selected ore to continue maintaining production. Apatite ore is currently very scarce, especially Grade I ore, but the Company has promptly converted technology to continue to create products”, Mr. Quy provided more information to shareholders.
First quarter profit before tax decreased by 85%
Closing the first quarter of 2024, SFG recorded 349 billion VND in revenue and 5.1 billion VND in profit before tax, which are 21% and 16% of the target, respectively. While revenue has improved according to the Chairman, up 12% compared to the same period in 2023, but profit before tax decreased by 85%.
With an unpromising start, SFG expects the second quarter to be more positive as it targets 380 billion VND in revenue and 15 billion VND in profit before tax. In the same period of 2023, the Company lost 7.8 billion VND.
| SFG Net profit in Q1 from 2011 – 2023 |
SFG assesses that the global economic recession that has lasted since 2023 has directly affected the Vietnamese economy, and it also predicted that the global situation would continue to fluctuate this year, potentially bringing difficulties and challenges to the fertilizer industry.
The subsidiary of Vietnam Chemical Group cautiously aims for a revenue of 1.6 trillion VND this year, unchanged from the result of 2023. Meanwhile, the profit before tax is only expected to be a modest 32 billion VND, or 56% of that of 2023. Dividend is expected to be no lower than 5% of the charter capital of 2023.
SFG plans for phosphate fertilizers of various types, NPK fertilizers, sulfuric acid, foliar fertilizers, and packaging to all be higher than those of 2023, ranging from 16% to 31%. Sales volume is also expected to improve, except for a 5% decrease in phosphate fertilizers.
This year, the fertilizer company will focus on the Northern market, the Central Highlands, and leverage the advantage of the Long Thanh Phosphate brand to develop new markets. In addition, it will participate in trade promotion programs at home and abroad to promote its products.
According to General Director Dang Tan Thanh, last year, the fertilizer industry faced many difficulties. The price of fertilizer dropped rapidly and sharply in the first months of 2023, which affected production and business efficiency. The fact that China reopened its economy, resumed production, and exported fertilizers has put great pressure on the domestic fertilizer market in terms of price competition.
In addition, the Law on VAT for fertilizers has not yet been amended to include fertilizers in the list of goods subject to VAT that has significantly affected investment and continued to increase expenses, leading to an increase in input costs of production and business operations.
However, the industry still has certain advantages. For example, the prices of a number of key agricultural products have increased, stimulating investment in agricultural production, and therefore increasing the demand for fertilizers. However, the price of raw materials for fertilizer production has decreased compared to 2022 but still remains at a high level, leading to a decrease in fertilizer production costs compared to the same period.
Also at this meeting, Mr. Thanh submitted a resignation from the position of a Member of the Board of Directors for the term 2020-2025 due to reaching the retirement age according to the state’s regulations, effective September 1st, 2024.
Mr. Do Van Tuan was elected by the meeting as a Member of the Board of Directors for the term 2020 – 2025, replacing Mr. Thanh. Mr. Tuan (born in 1978) started working as the Deputy General Director of SFG since August 2023. Before that, he held many important positions at SFG from 2004, including Chief Accountant and Head of Financial Accounting…
Vietnam Chemical Group authorized Mr. Tuan to represent the Group’s capital, corresponding to 20% of the charter capital at SFG, to represent the Group in exercising rights, responsibilities, and obligations for the Group’s capital invested in the Company.
