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PetroVietnam Fertilizer profit drops on rising costs
PetroVietnam Fertilizer & Chemical Joint-Stock Co., the country’s biggest fertilizer producer, said net income plunged 31 percent on lower prices and costs the firm incurred developing a distribution network.
Profit declined to VND756 billion (US$42.4 million) in the first half from the same period a year earlier, the company said in a statement on its website Tuesday. Spending on products rose 67 percent to about VND3 trillion, sales expenses almost tripled to VND144 billion and management costs climbed 71 percent to VND122.7 billion, the statement said.
Instead of selling directly from factories, the Ho Chi Minh City-based company began transporting fertilizer to warehouses to maintain quality this year, Pham Dang Nam, a company spokesman, said by phone Tuesday.
“The company has had to bear higher expenses when it wanted to support distributors by transporting fertilizer to them,” said Khong Van Minh, an investment director at Jaccar Capital Fund in HCMC. “Fertilizer prices this year are also lower.”
Fertilizer prices dropped about 30 percent in the first half from the same period last year, PetroVietnam’s Nam said. A weakening dong has also raised costs, he said. The company imported about 150,000 metric tons of fertilizer last half, nearly triple the same period last year, he said.
Vietnam’s currency has weakened 1.8 percent this year.
PetroVietnam Fertilizer’s sales rose almost 37 percent to VND4.1 trillion from a year earlier, the statement said.
The figures were released after the close of trading on the Ho Chi Minh Stock Exchange. PetroVietnam Fertilizer, the fifth-biggest company on the exchange, fell 5 percent, the biggest decline in more than seven months, to VND45,600.
thanhnien, bloomberg
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