BUSINESS PERFORMANCE
Summary on business performance 2020
| No. | Item | Unit | Actual 2019 | Plan 2020 | Actual 2020 | Ratio compared with 2019 (%) | Plan completion rate (%) |
|---|---|---|---|---|---|---|---|
| A | B | C | 1 | 2 | 3 | 4=3/1 | 5=3/2 |
| 1 | PRODUCTION | ||||||
| 1.1 | Phu My Urea | Thousand tons | 707.9 | 785.0 | 865.9 | 122% | 110% |
| 1.2 | UFC 85 | Thousand tons | 11.8 | 13.0 | 13.5 | 115% | 104% |
| 1.3 | NPK | Thousand tons | 84.5 | 180.0 | 114.9 | 136% | 64% |
| 1.4 | NH3 (for trading) | Thousand tons | 61.5 | 57.8 | 73.6 | 120% | 127% |
| 2 | SALES VOLUME | ||||||
| 2.1 | Phu My Urea | Thousand tons | 691.2 | 780.0 | 826.8 | 120% | 106% |
| 2.2 | Phu My NPK | Thousand tons | 76.6 | 180.0 | 94.5 | 123% | 52% |
| 2.3 | Other fertilizers | Thousand tons | 207.9 | 189.0 | 179.0 | 86% | 95% |
| 2.4 | UFC 85 | Thousand tons | 8.4 | 9.0 | 9.6 | 114% | 107% |
| 2.5 | NH3 (for trading) | Thousand tons | 58.8 | 55.0 | 67.8 | 115% | 123% |
| 2.6 | CO2 | Thousand tons | 51.2 | 50.0 | 54.3 | 106% | 109% |
| 2.7 | Chemicals | Thousand tons | 1.6 | 0.8 | 0.7 | 41% | 84% |
| 3 | CONSOLIDATED FINANCIAL INDICATORS | ||||||
| 3.1 | Total revenue | Billion VND | 7,831.0 | 9,237.5 | 8,038.0 | 103% | 87% |
| 3.2 | Profit before Tax | Billion VND | 467.1 | 512.6 | 847.9 | 182% | 165% |
| 3.3 | Profit after Tax | Billion VND | 388.9 | 432.8 | 701.6 | 180% | 162% |
| 3.4 | Budget payable (paid) | Billion VND | 127.9 | 159.2 | 439 | 343% | 276% |
| 4 | PARENT COMPANY’S FINANCIAL INDICATORS | ||||||
| 4.1 | Owner’s equity | Billion VND | 8,041.5 | 7,589.1 | 8,127.1 | 101% | 107% |
| 4.2 | In which: Charter capital | Billion VND | 3,914.0 | 3,914.0 | 3,914.0 | 100% | 100% |
| 4.3 | Total revenue | Billion VND | 7,006.1 | 8,703.1 | 7,411.4 | 106% | 85% |
| 4.4 | Profit before Tax | Billion VND | 435.5 | 491.4 | 815.2 | 187% | 166% |
| 4.5 | Profit after Tax | Billion VND | 370.4 | 420.5 | 691.3 | 184% | 162% |
| 4.6 | Ratio of Profit after tax/Charter capital | % | 9% | 11% | 17% | 184% | 162% |
| 4.7 | Budget payable | Billion VND | 106.7 | 141.9 | 419.2 | 343% | 276% |
| 4.8 | Investment | ||||||
| 4.8.1 | Total investment | Billion VND | 116.3 | 106.7 | 75.0 | 64% | 70% |
| Capex | Billion VND | 100.0 | 66.7 | 56.1 | 56% | 84% | |
| Equipment procurement | Billion VND | 16.3 | 40.0 | 18.8 | 116% | 47% | |
| Capital investment | Billion VND | ||||||
| 4.8.2 | Capital investment source | Billion VND | 116.3 | 106.7 | 75.0 | 64% | 70% |
| Owner’s equity | Billion VND | 41.8 | 83.2 | 75.0 | 179% | 90% | |
| Loans and others | Billion VND | 74.5 | 23.5 | 0% | 0% |
Fertilizer and chemicals production in 2020
Thousand tons
Fertilizer and chemicals sales volume in 2020
- Actual 2019
- Plan 2020
- Actual 2020
Phu My Urea
(Thousand tons)
Phu My NPK
(Thousand tons)
Other fertilizers
(Thousand tons)
UFC 85
(Thousand tons))
NH3
(Thousand tons)
CO2
(Thousand tons)
Chemicals
(Thousand tons)
PRODUCTION AND SALES OF PHU MY UREA
Production and sales of Phu My Urea over 2010-2020 period
Unit: Thousand tons
| PRODUCT | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Urea Production | 807 | 802 | 856 | 822 | 850 | 817 | 818 | 799 | 816 | 708 | 866 |
| Urea Consumption | 806 | 752 | 908 | 835 | 843 | 835 | 823 | 794 | 812 | 691 | 827 |
Production and sales of Urea indicators structure
Thousand tons
CONSOLIDATED FINANCIAL INDICATORS
Unit: Billion VND
| Year | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 6,999 | 9,763 | 13,906 | 10,807 | 9,972 | 10,047 | 8,170 | 8,178 | 9,439 | 7,831 | 8,038 |
| Budget payable | 405 | 537 | 694 | 602 | 308 | 420 | 474 | 515 | 297 | 128 | 439 |
| Profit before tax | 1,922 | 3,510 | 3,542 | 2,468 | 1,285 | 1,880 | 1,393 | 853 | 871 | 467 | 848 |
| Profit after tax | 1,706 | 3,140 | 3,016 | 2,142 | 1,096 | 1,488 | 1,165 | 708 | 712 | 389 | 702 |
Consolidated financial indicators structure
Billion VND
Major changes in business strategy, revenue, profit, expenses, market, products and supplies - The reasons:
Major difficult factors in production and sales in 2020 can be evaluated as follows:
In 2020, Vietnam showed a dramatic decrease in Urea import (by 78% in volume and by 80% in turnover) as compared to 2019 due to Covid-19. Urea import price was much higher than that of domestic price whilst domestic supply was on the increase. In the meantime, Urea export skyrocketed in 2020, reaching 450 thousand tons, 133% higher than 2019. Besides, turnover increased by 106%, standing at USD 116 million. The selling price of the agricultural products which are the main consumers of NPK and Urea, such as pepper, coffee, rubber and rice all plummeted. This discouraged investing/re-investing in fertilizers. In some other regions, farmers were inclined to abandon their old farming land, bringing about the decrease in the selling price of key fertilizer products in comparison to 2019. Climate change, drought and saltwater intrusion in the Central South, the Central Highlands, the Southeast and the Mekong Delta, as well as floods in the Central Region further caused a reduction of cultivation area and crop yields, leading to reduced demand for fertilizers.
The Covid-19 pandemic has seriously affected the export of Vietnam's agricultural products to its main agri-product consumer markets. It also disrupted Vietnam's agribusiness in these markets. For the time being, every trading activities were implemented very cautiously to avoid Covid-19 infection, which lead to reductions in export and considerable drop in agri-product, limited agricultural investment and demand for fertilizers.
The proportion of low-priced associated gas (Bach Ho - Rong Doi Moi fields in Cuu Long basin) is lower than the plan and declining faster than expected, whilst the proportion of compensated gas from other sources (Nam Con Son and Cuu Long) has increased with associated high transportation costs, leading to gas price increase.
Revenue and profit structure of fertilizers and chemicals in 2020
Revenue structure
Profit structure
Production and business analysis
Project and other investment
According to the 2020 plan, total capital for investment in construction and procurement was VND 107 billion. In 2020, PVFCCo disbursed VND 75 billion, achieving 70% of the plan according to the actual progress.
Return on capital
(Summary report on the performance of subsidiaries and capital contributors)
| No. | ITEM | Equity to total charter capital ratio (Billion VND) | Total invested capital (Billion VND) | Charter capital (Billion VND) | Profit after tax (PAT) (Billion VND) | PAT to charter capital ratio | 2020 dividend (Billion VND) |
|---|---|---|---|---|---|---|---|
| I | Investment in subsidiaries | 386.25 | 515.00 | 41.25 | 31.88 | ||
| 1 | PVFCCo North | 75.00% | 90.00 | 120.00 | 8.79 | 7.3% | 9.00 |
| 2 | PVFCCo Central | 75.00% | 75.00 | 100.00 | 12.83 | 12.8% | 9.00 |
| 3 | PVFCCo SE | 75.00% | 75.00 | 125.00 | 11.26 | 9.0% | 7.50 |
| 4 | PVFCCo SW | 75.00% | 127.50 | 170.00 | 8.37 | 4.9% | 6.38 |
| II | Investment in joint venture companies | 680.90 | 2,487.80 | -586.70 | 1.42 | ||
| 1 | VNPOLY | 25.99% | 562.70 | 2,165.11 | -603.03 | - | - |
| 2 | PVC Mekong | 35.63% | 100.00 | 280.69 | 10.14 | 3.6% | - |
| 3 | PVFCCo Packaging | 43.34% | 18.20 | 42.00 | 6.19 | 14.7% | 1.42 |
| III | Other long-term investments | 20.50 | 396.35 | -41.89 | 0.07 | ||
| 1 | PAIC | 8.50% | 3.60 | 42.35 | 3.58 | 8.4% | 0.07 |
| 2 | Ut Xi Aquatic Products Processing Corporation | 6.78% | 16.90 | 354.00 | -45.47 | - | - |
| TOTAL | 1,087.65 | 3,399.15 | -587.34 | - | 33.37 |
The Corporation’s financial performance
Assets and capital
Unit: Billion VND
| ITEM | 31/12/2019 | 31/12/2020 | % Increase (Decrease) |
|---|---|---|---|
| Total assets | 11,440 | 11,300 | -1% |
| Current assets | 5,944 | 6,314 | 6% |
| Non-current asset | 5,496 | 4,986 | -9% |
| Total resources | 11,440 | 11,300 | -1% |
| Liabilities | 3,279 | 3,052 | -7% |
| Owner’s equity | 8,161 | 8,247 | 1% |
| Charter capital | 3,914 | 3,914 | 0% |
| Total revenue | 7,831 | 8,038 | 3% |
| Total cost | 7,366 | 7,192 | -2% |
| Interest | 106.9 | 88.4 | -17% |
| EBIT | 574 | 934 | 63% |
| Profit before tax | 467 | 848 | 82% |
| Profit after tax | 389 | 702 | 80% |
| Profit after tax of minority shareholders | 11 | 10 | -8% |
| Profit after tax of parent company | 378 | 692 | 83% |
Financial indicators
| ITEM | 2019 | 2020 |
|---|---|---|
| Liquidity ratios | ||
| Current ratio | 2.88 | 3.12 |
| Quick ratio | 2.23 | 2.39 |
| Solvency ratios | ||
| Total debt/total assets | 28.66% | 27.01% |
| Total debt/total equity | 40.18% | 37.01% |
| Operational capacity ratios | ||
| Inventory turnover | 4.17 | 4.28 |
| Net revenue/total assets | 67.16% | 68.69% |
| Profitability ratios | ||
| Net profit after tax/Net revenue | 5.06% | 9.04% |
| Profit before tax/Total revenue | 5.96% | 10.55% |
| ROE | 4.74% | 8.55% |
| ROA | 3.45% | 6.17% |
BOARD OF MANAGEMENT REPORT
IN GENERAL
After 18 years of establishment and 14 years of operation as a joint stock company, PVFCCo has been increasingly growing, developing and improving its sustainable values. The Corporation is inspired by past experiences to promote human resource development in line with dynamic changes in organization structure, management, and business operations. In 2020, despite facing many challenges and difficulties, the Corporation has strived to achieve certain results in production and business activities to create premise for its development in the coming years.
In order to achieve the important targets assigned by the General Meeting of Shareholders in 2020, the Corporation has taken advantages of and overcome the following main difficulties:
The input supply of gas is ensured and fully meets the operational demands of the Phu My Fertilizer Plant.
Phu My brand has created its prestige with customers.
The distribution system has been deployed deeply and widely to the consumption regions.
Funds are sufficiently and promptly secured for production and business activities.
As a result of climate change, serious droughts, floods and rising salinity have caused a drop in agricultural output and have even impacted cultivation ability in some regions. Serious drought and saltwater intrusion in the Central South, the Central Highlands, the Southeast and the Mekong Delta, as well as floods in the Central Region further caused a reduction of cultivation area and crop yields, leading to reduced demand for fertilizers;
The Covid-19 pandemic has seriously affected the export of Vietnam's agricultural products to its main agri-product consumer markets. It also disrupted Vietnam's agribusiness in these markets. For the time being, every trading activities were implemented very cautiously to avoid Covid-19 infection, which lead to reductions in export and considerable drop in agri-product, limited agricultural investment and demand for fertilizers;
The proportion of low-priced associated gases (Bach Ho - Rong Doi Moi fields in Cuu Long basin) is lower than the plan and declining faster than expected, whilst the proportion of compensated gas from other sources (Nam Con Son and Cuu Long) has increased with associated high transportation costs, leading to gas price increase.
The fiercely competitive market, with a high inventory of fertilizers and lowered prices affects the consumption;
Phu My NPK which produced by Phu My NPK Plant, needs more time to improve;
The spread of counterfeit and poor-quality products on the fertilizer market are still not controlled closely.
Machinery and equipment that has been used constantly for 16 years requires higher maintenance costs.
Production and Business Performance
Major achievements in 2020:
With the experience accumulated in periodic maintenance, in 2020, PVFCCo continued to actively and promptly clear up problems that arose and effectively carry out periodic and preventative maintenance for production equipment, a crucial factor in minimizing machine breakdowns. The review, adjustment, and application of these norms were obviously effective, resulting in the total energy consumption of production workshops in 2020 being lower than targets, and the total energy saving costs in the production sector reached VND 39 billion.
Phu My Urea brand retains its solid position in the domestic market amid fierce competition, while taking advantage of the international market’s recovery momentum to develop the export market with the highest quarterly export volume (70 thousand tons of Urea in Quarter 3, 2020). In addition, it has created a foothold in the market with the quality of Phu My NPK, MOP, DAP, and continues to develop chemical production and business activities.
Total disbursement for investment and procurement projects is VND 75 billion.
The NH3 Revamp - Phu My NPK Complex: The projects of increasing the capacity of the NH3 production workshop at the Phu My Fertilizer Plant by 90,000 tons/years (20% higher than the existing capacity) and constructing the plant which utilized the NH3 source made by chemical technology, to produce 250,000 tons of NPK fertilizer per year has been put into operation. In 2020, the Complex project continued to contribute about VND 1,200 billion in revenue, equivalent to 15% of total revenue of the Corporation.
Aiming to conduct research and development with the market in mind, utilizing existing advantages, products and technologies to help solve problems of the Corporation, the research and development of new products in 2020 showed improvement with special achievements. Specifically, the Corporation successfully tested the new Urea-based products (Phu My Urea + KeBo Fertilizer) and officially put them into commercial production from 2021; it introduced liquid NPK products in line with modern, water-saving and environmentally friendly cultivation trends; it conducted assessments and reported on investment opportunities for potential projects/products such as hydrogen peroxide, melamine, organic fertilizers, etc.
The Projects of Remuneration Policy Improvement and KPI have provided motivation for employees to promote creativity and improvement in their work and help the Corporation to retain the high-qualified staff.
Financial Analysis
Total assets as at 31/12/2020 was VND 11,300 billion, decrease of 1% from the beginning of the year (VND 11,300/11,440 billion). Cash and cash equivalents decreased by 32% from the beginning of the year (VND 2,029/2,977 billion) as PVFCCo’s over 3-month term deposits increased by 111%, compared to the beginning of the year (VND 2,185/1,035 billion).
PVFCCo’s 2020 liabilities were VND 3,052 billion, decrease of 7% as compared to the beginning of the year (VND 3,052/3,279 billion).
Total liability to total assets ratio and total liability to equity ratio decreased compared to those of 2019, but current ratio and quick ratio in 2020 were remained higher than 1. This shows the ability to pay the debts well, and the Corporation does not have any pressure on due debt, ensuring good production and business activities.
Given the closing balance of Cash and Cash equivalents at VND 2,029 billion, there is sufficient funding for manufacturing, trading and investment projects as planned.
Profitability ratios of PVFCCo such as ROE, ROA increased significantly compared to those in 2019 (81% and 79%, respectively).
TOTAL ASSETS AS AT 31/12/2020
11,300
BILLION VND
Liabilities as at 31/12/2020
3,052
BILLION VND
Decrease of 7% as compared to the beginning of the year
