DGC — 4Q24 results

Event

DGC reported 4Q24 PATMI growth of +6.2% QoQ / +4.2% YoY, reaching VND749bn. Full-year earnings (-4.1% YoY) achieved 100% of management’s guidance and 94% of our forecast.

Details

4Q24 revenue decreased by -5.5% QoQ (but was up +1.3% YoY) to VND2.4tn. We believe the sequential decline was primarily due to a drop in average production caused by the shortage of apatite ore following the expiration of mining licenses in 3Q24. This issue is not a surprise: we highlighted it in our initiation report published on January 9.

4Q24 gross margin increased by +2.2ppt QoQ/+3.8ppt YoY to reach 36.7%. We believe this improvement was driven by reduced COGS (-8.7% QoQ/-4.5% YoY) and a gradual recovery in yellow phosphorus (P4) prices.

SG&A-to-revenue ratio fell by 90bps QoQ but rose +1.1ppt YoY to reach 7.2% in 4Q24. This was primarily due to reduced shipping rates, which eased from mid-August (after a sharp increase in 2Q24) on the easing of the Red Sea crisis and resolution of congestion at several major ports.

DGC’s 2024 revenue reached VND 9.9tn (+1.2% YoY), achieving 97% of its full-year target and our revenue forecast, while gross margin increased by +20bps YoY to 35.5%.

2024 PAT decreased by -4.1% YoY to VND 3.1tn. DGC’s full-year SG&A to revenue ratio increased by +60bps YoY to 6.7% due to the sharp mid-year rise in shipping rates that eased in 4Q24, as discussed above.

Please access the link for our complete report: DGC 4Q24 results

Analysts: 

An Nguyen, An.nguyen@yuanta.com.vn

Binh Truong, Binh.truong@yuanta.com.vn