Thread Content
Decline in Performance of Listed Fertilizer Companies in the First Three Quarters Author/Source: China Fertilizer Network Date: 11-06-2019 Clicks: 246 The third-quarter performance reports of listed companies were released by the end of October, and the performance of 22 fertilizer-related listed companies showed an overall decline. In the first three quarters, 22 listed fertilizer companies achieved a total profit of 3 billion yuan, a decrease of 44.5% on a year-on-year basis; the arithmetic average earnings per share was around 0.1 yuan, down 62% year-on-year. Industry experts analyze that the decline in the performance of listed fertilizer companies can be attributed to three main reasons: First, many fertilizer companies, especially those dealing in nitrogen-based fertilizers, adopt a strategy of developing both fertilizer production and chemical manufacturing; while focusing on fertilizer production, they also use raw materials, intermediate products, and waste gases to produce chemical products. This year, the prices of some chemical products have dropped significantly, which has had a considerable impact on corporate profits. In the first three quarters, the 11 listed nitrogen fertilizer companies together achieved profits of 1.06 billion yuan, a decline of 82.6% year-on-year, representing the largest drop among all sub-sectors. Second, the prices of fertilizer products have fallen. Affected by factors such as declining market demand and falling prices of imported fertilizers, domestic fertilizer prices dropped across the board in the first three quarters. Among them, the price of urea dropped by 12.2% on a year-on-year basis, the price of diammonium phosphate fell by 5.7%, the price of potassium chloride decreased by 6.3%, and the price of compound fertilizers dropped by 1%; overall, the fertilizer price index declined by 9.4% on a year-on-year basis. The falling prices of fertilizers have a negative impact on corporate profitability. Thirdly, affected by factors such as environmental protection and safety inspections, some enterprises operate at insufficient capacity, resulting in reduced output and a negative impact on their profitability. In the third-quarter reports released this time, 3 listed fertilizer companies provided forecasts for their full-year performance in 2019; 2 of them expected a decline, while 1 expected an increase. Overall, the performance of fertilizer companies listed in 2019 was not optimistic. Specifically, Xinyangfeng is expected to achieve profits of 650 million to 750 million yuan in 2019, a year-on-year decline of 9.49% to 21.56%; Sichuan Meifeng is expected to record profits of 90 million to 125 million yuan in 2019, a year-on-year drop of 43.08% to 59.02%; Yuntu Holding is expected to earn profits of 210 million to 260 million yuan in 2019, a year-on-year increase of 20% to 50%.