Source: tapchicongthuong.vn
Will complete the acquisition of Korean – Vietnamese Fertilizer this year
Recently, the Board of Directors of PetroVietnam Ca Mau Fertilizer Joint Stock Company (Ca Mau Fertilizer, stock code DCM – HoSE) approved the policy to buy back 100% of the capital contribution at Han Fertilizer Company Limited – Viet (KVF) from a Korean organization.
Sharing more information about this deal, Mr. Van Tien Thanh, General Director of Ca Mau Fertilizer said that this deal is expected to be completed this year and a subsidiary will be established to operate this plant. . Ca Mau Fertilizer It is expected to receive all current personnel and only add key personnel to operate KVF Factory.
The acquisition of the Korean – Vietnamese NPK Factory brings many strategic advantages to Ca Mau Fertilizer.
This deal has a maximum value of about 25 million USD. KVF factory is located in Hiep Phuoc Industrial Park (Nha Be District, Ho Chi Minh City), with an area of 8.8 hectares with a total capacity of 360,000 tons of NPK/year. Mr. Van Tien Thanh commented that the price of the deal is “good” when the price to buy equivalent premises on the market alone is about 17 million USD.
At the same time, Ca Mau Fertilizer confidently affirms that after returning home, KVF Factory’s sales output will increase to 150,000 tons/year, ending losses by the end of 2024 and striving to be profitable from 2025.
General Director of Ca Mau Fertilizer also shared that, with the advantage of geographical location and available distribution system, the acquisition of KVF Factory will create conditions for Ca Mau Fertilizer to penetrate the NPK market in the Southeast, Central Highlands and Central region. Ca Mau Fertilizer’s current NPK plant mainly serves demand in the Southwest region and Cambodia.
In addition, Ca Mau Fertilizer can take advantage of KVF Factory’s facilities such as warehouses to increase storage of raw materials and goods. At the same time, the company will invest in warehouse systems in target markets such as Ho Chi Minh City and surrounding areas, Can Tho, An Giang, Dong Thap, Quy Nhon, Central Highlands… to increase sales. .
According to the assessment of some financial institutions, the successful acquisition of KVF Factory will create a new growth driver for Ca Mau Fertilizer, helping to increase NPK fertilizer production capacity by more than double, reaching a total of 660,000 tons/year. year. In particular, Ca Mau Fertilizer also has an advantage over other NPK enterprises when it is able to control its input urea fertilizer source.
“90% of fertilizer prices are determined by input materials. Therefore, any unit that proactively sources input materials at good prices will have an advantage.”, said Mr. Van Tien Thanh. Ca Mau Fertilizer will maintain both brands, NPK Ca Mau and NPK Han Viet – which are positioned as high-end products in the market.
Ca Mau Fertilizer can record sudden profits
Price movements of urea fertilizer in Phu My and Ca Mau. (Source: Ca Mau Protein)
Cumulatively for the first 10 months of 2023, Ca Mau Fertilizer recorded revenue of 10,118 billion VND and pre-tax profit of 804 billion VND, a significant decrease compared to last year’s record high level. However, in October 2023 alone, Ca Mau Fertilizer’s pre-tax profit has recovered to 90 billion VND, compared to the entire third quarter of 2023 reaching 105 billion VND.
Ca Mau Fertilizer currently forecasts that this year’s total revenue will reach 13,504 billion VND and pre-tax profit will reach 1,029 billion VND, down 18% and 78% respectively compared to 2022. Thus, it is estimated that in the fourth quarter of 2023, Ca Mau Fertilizer will achieve revenue of 4,067 billion VND and pre-tax profit of 315 billion VND.
However, Mr. Van Tien Thanh shared that the actual profit achieved at the end of the year could be higher, around 1,100 – 1,200 billion VND in the context of many positive market developments. In particular, the Russian Government has just decided to extend fertilizer export restrictions for another 6 months, from November 2023 to May 2024, said General Director of Ca Mau Fertilizer.
Trading volume and price trend of DCM shares of Ca Mau Fertilizer from the beginning of 2023 to present. (Source: TradingView)
In addition, according to Maybank Investment Bank’s assessment, Ca Mau Fertilizer may have a positive surprise factor in terms of profit accounting for 2022 and 2023 when the input gas price for 2022 has not yet been finalized. since the gas price for the entire PM3 – Ca Mau cluster has not been finalized. With conservative accounting in 2022, Ca Mau Fertilizer can record provision reversal in the near future.
In the first 9 months of this year, Ca Mau Fertilizer also applied a conservative accounting method for the ratio of gas supplied between Vietnam Oil and Gas Group (PVN) and Petronas (Malaysia). Therefore, it is likely that when finalizing the actual costs will be lower, helping Ca Mau Fertilizer’s profit increase compared to expected, Maybank Investment Bank said.
On the stock market, ending December 1, market price DCM shares reached 32,000 VND/share, an increase of more than 32% compared to the beginning of this year.
