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Strong performance for listed fertilizer companies in the third quarter Author/Source: Sinochem New Network Date: 11-06-2020 Clicks: 40 As of last weekend, the third-quarter reports of listed fertilizer companies had been released. The 20 listed fertilizer companies together achieved a profit of 4.45 billion yuan, a year-on-year increase of 31.7%. Due to the increase in production and sales volumes as well as prices of fertilizer products, most fertilizer-related listed companies achieved year-on-year profit growth in the third quarter. Among the companies with improving performance, Salt Lake Co. achieved the highest profits; in the first three quarters it earned 1.38 billion yuan in profits, a surge of 374.4% on a year-on-year basis. The company stated that the main reason for the significant improvement in performance is that, through judicial restructuring, it effectively disposed of its loss-making assets—namely Phase I and II of its comprehensive utilization projects, its subsidiary Yanhu Magnesium Industry, and its subsidiary Haina Chemical. As a result, the company has regained its profitability, and its financial condition has seen a fundamental improvement. At the same time, the company’s core business of potassium chloride production remained stable: the output of potassium chloride was 4.4158 million tons, while sales volume reached 4.8573 million tons, with both output and sales showing positive growth. Yuntu Holdings’ earnings revision announcement states that the company expects the net profit attributable to shareholders of the listed company for the period from January to September to be between 348 million and 366 million yuan, representing a year-on-year increase of 90% to 100%. The main reason for the growth in performance was that the gross margin of compound fertilizer products was higher than expected; the prices of soda ash products also rose gradually, exceeding expectations. In the first three quarters, Batian Co., Ltd. achieved a profit of 44.8924 million yuan, representing a year-on-year increase of 134.81%. The company stated that thanks to the optimization of the production processes at its production facility in Guizhou and the continuous increase in overall production capacity, the gross profit margin on product sales has risen compared to the same period last year. However, some companies also saw a decline in performance on a year-on-year basis. Among them, Yangmei Chemical suffered a loss of 700 million yuan in the first three quarters, a decrease of 311.5% year-on-year, making it the fertilizer company with the largest losses. The company stated that factors such as the COVID-19 pandemic, a sharp drop in oil prices, and declining demand from downstream sectors have had a negative impact on the prices, sales volumes, and profits of its products. However, Yangmei Chemical stated that it expects substantial positive changes in the company’s performance in the fourth quarter, with a possibility of turning losses into profits. LiuGuo Chemical also stated that it expects its cumulative net profit to turn positive this year, mainly due to a significant increase in the gross profit margins of its main products, namely diammonium phosphate and compound fertilizers, compared to the previous year. Overall, as fertilizer prices rise, the performance of fertilizer-related listed companies is expected to improve further in the fourth quarter.