OVERVIEW
In 2023, the global fertilizer market faced significant challenges, with geopolitical instability and shifts in export policies of key countries leading to oversupply and sharp price declines compared to the high levels of 2022.
Apart from external factors, the domestic fertilizer market suffered from unfavorable impacts due to VAT policies, escalating input costs, and escalating competition among manufacturers. This led to a significant reduction in prices for fertilizers and chemicals within the country.
Through diligent operational management, proactive sales volume enhancement, and cost-saving measures throughout the production-to-consumption process, the Corporation overcame external and internal challenges. This ensured stable production and business operations, leading to positive outcomes.
RESULTS
Playing the role of managing the Corporation between two terms of Annual General Meeting of Shareholders, Board of Directors reviewed the 2023 year-end performance amidst both favorable and challenging conditions. With the right solutions, the Corporation successfully achieved its fundamental tasks and production targets as per the adjusted plan authorized by the General Meeting of Shareholders.
The Corporation has adopted an honesty and transparency policy. As an award-winning organization, the management adhered to these principles as a foundation and standard for best practices. Internal auditing was deployed with a fresh strategy to complete and upgrade risk management in PVFCCo's manufacturing and commercial operations.
ASSESSMENT OF THE BOARD OF DIRECTORS ON THE BOARD OF MANAGEMENT'S OPERATIONS
A general assessment of the Board of Management on business operation management:
- The members of the Board of Management are all qualified, capable, and qualified, professionally trained, knowledgeable in their assigned fields, and have extensive experience managing and administering significant projects/enterprises.
- The President & CEO has delegated specific roles to the Vice Presidents and conducted weekly briefings to assess weekly work results and assign the work plan for the following term.
- The Board of Management conducted the unit's business activities in accordance with the General Meeting of Shareholders' resolutions, under the direction of the Board of Directors, and in strict compliance with the enterprise's charter and legal provisions.
- The Board of Management maintained a comprehensive awareness of the Corporation's advantages and disadvantages, which enabled it to adapt operating production and business activities while also issuing internal documents in accordance with its authority to effectively control the Corporation's production and business activities; effectively performing the role of risk control beginning with the Board of Management and general managers.
ASSESSMENT ON ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES
The Corporation is committed to upholding the highest standards of environmental and social responsibility in all of its manufacturing, commercial, and investment activities. The Corporation’s primary activities are in the sector of fertilizer and chemical production, both of which are environmentally responsible and have a high potential for negative impact on the environment. Compliance with applicable safety and environmental laws is therefore a major emphasis during production.
In product distribution, the Corporation is constantly developing programs and initiatives to educate farmers about the effective and economical use of fertilizers while reducing environmental impact. The Corporation remains focused on its duties and obligations to society. It has consistently and actively contributed to social security work and cared for its employees throughout the years.
The results of the implementation of environmental and social responsibilities in 2023 are presented in detail in Chapter 5 - Sustainable Development Report (pages 80- 105).
THE BOARD OF DIRECTORS’ PLANS AND ORIENTATIONS FOR 2024
In 2024, the fertilizer market and gas prices remain challenging due to the ongoing difficulties from late 2023, compounded by political factors. Notably, the natural gas supply has entered a challenging phase, with cheaper sources experiencing production declines. Considering these factors, the Board of Directors has approved and assigned the 2024 production and business plan for the Corporation as follows:
PRODUCTION TARGETS
| No. | Item | Unit | Plan 2024 |
|---|---|---|---|
| 1 | Production output | ||
| 1.1 | Phu My Urea | Thousand tons | 850.0 |
| 1.2 | Phu My NPK | Thousand tons | 143.1 |
| 1.3 | Other fertilizers (produced by the factory) | Thousand tons | 4.0 |
| 1.4 | UFC85/Formaldehyde | Thousand tons | 12.5 |
| 1.5 | NH3 (for trading) | Thousand tons | 65.5 |
| 2 | Sales volume | ||
| 2.1 | Phu My Urea | Thousand tons | 870.0 |
| 2.2 | Phu My NPK | Thousand tons | 143.1 |
| 2.3 | Other fertilizers (produced by the factory) | Thousand tons | 5.0 |
| 2.4 | UFC 85/Formaldehyde | Thousand tons | 8.5 |
| 2.5 | NH3 | Thousand tons | 65.0 |
| 2.6 | Other fertilizers | Thousand tons | 260.0 |
| 2.7 | CO2 | Thousand tons | 45.0 |
| 2.8 | Other chemicals | Thousand tons | 0.787 |
THE CORPORATION'S FINANCIAL PLAN (CONSOLIDATED)
| No. | Item | Unit | Plan 2024 |
|---|---|---|---|
| 1 | Total revenue | VND billion | 12,755 |
| 2 | Profit before tax | VND billion | 660 |
| 3 | Profit after tax | VND billion | 542 |
| 4 | Budget payable | VND billion | 263 |
PARENT COMPANY'S PLAN
Financial plan
| No. | Item | Unit | Plan 2024 |
|---|---|---|---|
| 1 | Owner's equity | VND billion | 10,316 |
| 2 | Total revenue | VND billion | 11,534 |
| 3 | Profit before tax | VND billion | 611 |
| 4 | Profit after tax | VND billion | 509 |
| 5 | Ratio of Profit after Tax/Average Owner's equity | % | 4.9 |
| 6 | Ratio of Dividend/Charter capital (*) | % | 15 |
| 7 | Total debt/total Owner's equity | Times | 0.22 |
| 8 | Budget payable | VND billion | 240 |
Note: (*) Charter capital is expected to increase according to the 2024 plan
Capital investment plan
| No. | Item | Unit | Plan 2024 |
|---|---|---|---|
| I | Total capital investment | VND billion | 666.15 |
| 1 | Capex | VND billion | 223.13 |
| 2 | Procurement projects | VND billion | 443.02 |
| 3 | Capital contribution to member companies | VND billion | - |
| II | Capital investment source | VND billion | 666.15 |
| 1 | Owner's equity | VND billion | 666.15 |
| 2 | Loans and others | VND billion | - |
| III | Capital expenditure | VND billion | 666.15 |
| 1 | Owner's equity | VND billion | 666.15 |
| 2 | Loans and others | VND billion | - |