Duc Giang Chemicals plans “backward” profit in Q2/2024. Illustrative image.
Duc Giang Chemicals Corporation (MCK: DGC) recorded a slight decline of 4% in revenue in Q1/2024 compared to the same period last year, down to 2,385 billion VND. In which, revenue from fertilizer of all kinds increased by 24%, revenue from DAP increased by 99%, and revenue from laundry detergent and detergents increased by 21%. In contrast, revenue from yellow phosphorus and H3PO4 decreased by 7%.
DGC’s after-tax profit in Q1/2024 reached nearly 704 billion VND, a decrease of more than 14% compared to the same period last year, the lowest level in the past 10 quarters.
In Q2/2024, Duc Giang Chemicals planned consolidated total revenue of 2,405.8 billion VND, after-tax profit of 700 billion VND, and capital construction costs for the repair and maintenance of the Duc Giang alcohol factory of 40 billion VND.
In addition, in terms of revenue structure in Q2/2024, Duc Giang Chemicals expects revenue from yellow phosphorus to be 1,018.5 billion VND, accounting for 42.3% of total revenue; revenue from WPA extraction acid (50%) is 315 billion VND, accounting for 13.1% of total revenue; revenue from phosphoric acid HPO (85%) is 237 billion VND, accounting for 9.9% of total revenue; revenue from DCP and MCP feed additives is 198 billion VND, accounting for 8.2% of total revenue …
It is known that in Q2/2023, Duc Giang Chemicals recorded an after-tax profit of 881.81 billion VND. Thus, Duc Giang Chemicals’ profit plan for Q2/2024 is estimated to decrease by 20.6% compared to the same period, equivalent to a decrease of 181.81 billion VND.
Duc Giang Chemicals is expected to return to growth from Q3/2024 thanks to the strong recovery in demand for semiconductors and the Nghi Son Soda project coming into operation from Q2/2025. The second Apatite mine will also help to improve DGC’s gross profit margin in the long term.
At the recent 2024 Annual General Meeting of Shareholders, Duc Giang Chemicals approved this year’s target with consolidated revenue of 10,202 billion VND and after-tax profit of 3,100 billion VND. Thus, at the end of Q1/2024, Duc Giang Chemicals had achieved 23% of the after-tax profit plan set out.
