Chap 3 - Operational situation in 2022

Situation of production and business activities

The year 2022 continues to be a turbulent year for the world, especially after the Russian-Ukrainian conflict took place. Increased and prolonged hostilities and Western sanctions against Russia have caused an unprecedented serious energy crisis. The prices of oil, natural gas and world agricultural products increased sharply. Meanwhile, major economies such as the UK, the US, the EU, and Japan... all suffered from a decline in economic growth, and many countries had to raise interest rates to curb inflation. According to statistics only in 2022, the US Federal Reserve (FED) has made 7 interest rate hikes, basically to about 4.25 - 4.5% - the highest level since December 2007 to prevent the world’s largest economy fell into recession. In its December 2022 report, credit rating agency Fitch Ratings forecast the world economic growth at 2.6% in 2022 and down to 1.4% in 2023.

PVCFC actively deploys a series of demonstration models in the locality

The constantly fluctuating world economic and political situation has caused many difficulties and challenges for domestic and foreign businesses. However, on the positive side, the high price of energy and agricultural products also benefits fertilizer manufacturing and trading companies in general and PVCFC in particular. In 2022, with the strategy of “Great adaptability - Strong innovation”, on the basis of careful preparation of information technology application, management solutions, corporate culture, PVCFC has effectively implemented the production and business plan in 2022 and achieved a high record, specifically:

Performance of production and business indicators

No.

Indicators

Unit

TH 2021

Chỉ tiêu

Ratio

Plan

Performance

Comparison (%)

A

B

C

1

2

3

4=3/2

5=3/1

I

Output indicator

1

Manufacturing products

-

Converted Urea

Thousand tons

898.56

900.00

918.08

102%

-

Of which,
Urea based Products

Thousand tons

75.25

52.00

45.04

87%

60%

-

NPK

Thousand tons

48.19

120.00

115.03

96%

239%

2

Product consumption

-

Urea

Thousand tons

750.03

800.00

844.08

106%

113%

-

Products from urea

Thousand tons

68.42

35.00

35.52

101%

52%

-

NPK

Thousand tons

38.39

80.00

83.67

105%

218%

-

Self-trading fertilizer

Thousand tons

161.07

83.00

123.48

149%

77%

II

Consolidated financial indicators

1

Total revenue

VND Billion

10.041,67

14.524,82

16.240,76

112%

162%

2

Profit before tax

VND Billion

1.956,27

3.897,89

4.596,31

118%

235%

3

After tax profit

VND Billion

1.826,12

3.660,63

4.321,08

118%

237%

4

Payments to the state budget

VND Billion

222,41

578,34

679,34

118%

305%

III

Financial indicators of the parent company

1

Total revenue

VND Billion

10,056.63

14,564.62

16,214.03

111%

161%

2

Profit before tax

VND Billion

1,956.27

3,897.89

4,596.31

118%

235%

3

After tax profit

VND Billion

1,826.12

3,660.63

4,321.08

118%

237%

4

Payments to the state budget

VND Billion

222.41

578.34

679.34

117%

343%

5

Ratio profit before tax /charter capital

%

37

74

87

118%

235%

IV

Investment in basic construction & MS TTB

1

Total investment

VND Billion

72.58

89.60

85.78

96%

118%

2

Investment funds

VND Billion

72.58

89.60

85.78

96%

118%

-

Equity

VND Billion

72.58

34.60

31.59

91%

44%

-

Other loans

VND Billion

-

55.00

54.19

99%

-

Note: (*) The planned indicators for 2022 are implemented according to the announcement 2022/PVCFC-IR dated December 29, 2022 of PVCFC. These indicators are adjusted to replace the production and business indicators approved in the Resolution of the 2022 annual meeting No. 828/NQ-PVCFC dated April 26, 2022.

Remarks on the performance

Regarding the performance of the parent company

In 2022, PVCFC completed the indicators assigned by the General Meeting of Shareholders with impressive and especially, the revenue, profit, profit/capital ratio reached the highest record ever:

Urea production output reached

918,08

thousand tons

Urea production output reached 918.08 thousand tons, fulfilled 102% of the plan and reached 102% compared to the same period in 2021.

NPK consumption volume reached

115,03

thousand tons

This is the first year of commercial production by the NPK workshop and the output reached 115.03 thousand tons, which is 139% higher than the same period in 2021.

Urea consumption reached

844,08

thousand tons

Urea consumption reached 844.08 thousand tons, equaling 106% of the plan and reaching 113% compared to the same period in 2021. NPK consumption reached 83.67 thousand tons, marking the penetration into the market. impressive market of NPK Ca Mau in the context of fierce competition with reputable and long-standing NPK business units in the market.

Total consolidated revenue reached

16.240,76

VND
billion

Total consolidated revenue reached 16,240.76 VND billion, fulfilling 112% of the plan, up 62% over the same period. This is the first year that the Company has fulfilled its revenue indicator of over 16,000 billion with constant efforts in consumption as well as benefiting from the high selling price.

The consolidated Profit before tax

4.596,31

VND
billion

The consolidated profit before tax was 4,596.31 VND billion, equaling 118% of the plan, up 162% over the same period. consolidated after tax profit was 4,321.08 VND billion, fulfilling 118% of the plan, up 137% over the same period. This is the highest profit ever of PVCFC due to the increase in revenue, and at the same time the Company implements activities to optimize savings and reduce savings, and is flexible in management activities. Payments to the state budget were 679.34 VND billion, reaching 117% of the plan, up 205% over the same period in 2021.

NPK consumption volume reached 83.67 thousand tons, marking the impressive market penetration of Ca Mau NPK

Regarding Performance of Subsidiary - PetroVietnam Packaging Joint Stock Company (PPC)

PPC has strived to complete the indicators assigned by the parent company: achieving the plan and the same period in terms of packaging production output, timely supply, and quality assurance of packaging for PVCFC.

Besides, PPC is always actively looking for external markets for two product lines of packaging & fertilizer; cooperate with PVCFC to research and apply QR code printing on packaging to control the flow of goods; coordinate research and trial production of new fertilizer lines according to PVCFC’s strategic direction.

Revenue increased by

8%

compared to the plan

3%

over the same period in 2021

Profit before tax increased

14%

compared to the plan

4%

compared to the
same period in 2021

Ca Mau Fertilizer products with outstanding packaging have been trusted by farmers.

Ca Mau NPK products at the display booth during the 8th Dak Lak Coffee Festival

Organization and personnel

Executive Board of the Company

No.

Full name

Position

Number of shares owned at period closing

Shares ownership ratio at period closing

1

Mr. Van Tien Thanh

General Director

30,000

0,005667%

1

Mr. Tran Chi Nguyen

Deputy General Director

1,600

0,000302%

1

Mr. Le Ngoc Minh Tri

Deputy General Director

1,600

0,000302%

1

Mr. Nguyen Tuan Anh

Deputy General Director

0

0,000000%

1

Ms. Nguyen Thi Hien

Deputy General Director

0

0,000000%

1

Mr. Nguyen Thanh Tung

Deputy General Director

5,003

0,000945%

1

Mr. Dinh Nhu Cuong

Chief accountant

2,900

0,005667%

Changes in Executive Board

In 2022, PVCFC has no change in Executive Board personnel.

HR Report 2022

PVCFC always upholds the strength of human resources, considering each employee as a valuable asset of the Company. The company is constantly improving the management model, creating an attractive working environment, focusing on building and training human resources with high professional qualifications, good qualities, and promoting personal development. sustainability of the Company.

Workforce overview

As of December 31, 2022

the total number of employeesof the Company is

1,042

people

The average salaryin 2022 is

29.76

million VND/ person/month

the average incomein 2022 is

36.53

million VND/ person/month

The labor structure of the Company is shown as follows

In 2022, the number of employees increased by 22 people compared to the end of the period in 2021 due to the recruitment of additional missing personnel for departments/units according to the staffing schedule and the need to use labor to serve production and business.

Employees and cadres planning, assessment and classification are carried out in accordance with regulations and processes, stemming from actual needs. The appointed cadres have well promoted their roles and tasks in their new positions, contributing to the construction and development of the Company.

PVCFC’s staff at the Review Conference 2022

Policies and benefits for employees

Remuneration policy

The salary policy is always perfected by the Company with the goal of creating all conditions for employees to feel secure and stick with the Company for a long time. In 2022, the Company will pay salaries, bonuses, overtime pay, and other allowances in accordance with the regulations on management of salaries and bonuses in accordance with the provisions of the Law, the Group and the provisions of law of the company.

PVCFC Trade Union Congress term 2023-2028

Insurance and benefits policy

The Company implements policies on social insurance, health insurance and unemployment insurance for employees according to current regulations of the State. In 2022, the Company does not owe social insurance, health insurance, unemployment insurance.

Insurance payment

Unit

Year 2020

Year 2021

Year 2022

Social insurance

VND

50,940,330,264

53,532,779,655

55,738,288,840

Health insurance

VND

9,021,022,719

9,547,281,420

9,956,269,170

Unemployment insurance

VND

4,214,046,825

3,910,995,569

2,937,511,100

In addition, the Company also buys in comprehensive health care insurance for employees such as PVI Care, Voluntary retirement insurance, “Postpaid benefits”Life insurance, etc., carry out activities to take care of spiritual life, give gifts, support tough situations for staff and employees, organize cultural exchange programs and sports festivals to create a spiritual playground and create solidarity. within the Company.

Holiday regime, Tet holiday

PVCFC arranges employees to take vacations, Tet holidays ... correctly and sufficiently in the number of days, or arrange alternate leave and make-up breaks in accordance with the provisions of the Labor Code.

Maternity

PVCFC fully and promptly implements maternity benefits for female employees, ensuring compliance with regulations on social insurance and health insurance.

Education policy

At PVCFC, the training and development of human resources is always concerned by the Company’s leaders in order to create favorable conditions for employees to maximize their inherent potential and increase their engagement with the Company. In 2022, the Company has effectively implemented training courses on management, corporate governance, skills improvement, expertise, corporate culture development, specifically: Professional human resource director, Corporate governance according to good and advanced practices in the world, Environmental - Social - Governance issues of corporate…

Changes in policies for the laborers

In 2022, the Company has made a number of improvements in the field of salary, regimes and policies to serve the Company’s human resource development strategy such as: Draft amending and promulgating regulations on management salary, bonus and welfare regime; Employee policy of the Company; Reviewing regulations on salary and bonus for the position of Area Manager, Customer Manager of the Sales Department and promulgated to apply from January 2023.

Investment situation, project implementation situation

From the beginning of 2022, after the epidemic response policy was released and travel activities resumed normally, PVCFC has urgently implemented a number of preparations to invest in projects according to the approved list, such as: surveying, selecting site locations to receive transfers in accordance with project requirements, contacting and negotiating with partners, carrying out other necessary legal procedures for the implementation. project...

Basically, the investment indicators of the projects are still low compared to the plan because the site preparation for the project faces many difficulties such as: the real estate market is quiet, transactions are gloomy, the disagreement of planning management of the locality where the project is implemented, resulting in the time extension of granting investment policies, the investment value is large, the project investment location is in a remote locality, the asset purchase valuation faces difficulties, the required legal corridor must be strictly implemented. Therefore, the work of receiving land transfer to implement the project needs to be carried out carefully.

In addition, the items of equipment procurement for network security and administration activities are still carried out according to the plan to ensure continuous and safe operation, improve and digitize management activities, improving labor productivity.

However, the bright lights in investment that should be mentioned are:

01

Completing the final settlement “Project of complex fertilizer production from molten urea 300,000 tons/year”.

02

Completed the transfer of land use rights and was granted by the Long An Provincial People’s Committee the decision to approve the investment policy of the PVCFC Research and Development Center project.

03

Completing the investment preparation for implementation of the project “Expanding rain cover for product production system”.

04

Completing investment preparation “Housing project for officials and employees of Ca Mau PVC Fertilizer Joint Stock Company - LC”.

05

Completing the final settlement and putting into operation “Item OF transformation and supply of raw CO2” to increase the residual CO2, increasing urea products, contributing to increase in revenue and profit.

Total investment value in 2022

85.78

VND
billion

reaching

96%

of the year plan

Financial situation

Financial situation (consolidated)

No.

Financial indicators

Year 2021
(VND billion)

Year 2022
(VND billion)

Comparison
(%)

1

The total value of assets

11,072.12

14,166.86

128%

2

Net Revenue

9,869.76

15,924.53

161%

3

Profits from business activities

1,954.50

4,593.15

235%

4

Other profits

1,767.08

3,166.45

179%

5

Profit before tax

1,956.27

4,596.31

235%

6

After tax profit

1,826.12

4,321.08

237%

Key financial indicators

No.

Financial indicators

Unit

Year 2021

Year 2022

Note

1

Indicators of liquidity

Short-term payment ratio

Time

2.28

4.04

Quick payout ratio

Time

2.28

3.25

2

Capital structure indicators

Liabilities/Total Assets ratio

%

32

25

Liabilities/Equity ratio

%

48

34

3

Performance indicators

Inventory turnover

Day

4.67

4.56

Net Revenue/Total Assets

%

89.14

112.41

4

Profitability indicators

After tax profit/Net revenue ratio

%

18.50

27.13

Profit before tax/Total revenue ratio

%

19.48

28.30

After tax profit/Equity ratio (ROE)

%

26.46

47.79

After tax profit/Average total assets ratio (ROA)

%

18.46

34.24

Shareholder structure, change in owner’s investment capital

Stock information as of December 31, 2022

Par value shares

10,000 VND/share

Total value of shares

5,294,000,000,000 VND

Types of shares in circulation

Common shares

Number of freely transferable shares

529.4 million shares

Number of shares restricted to transfer

0 (zero) shares

The company has no securities traded overseas.

Shareholder structure as of December 31, 2022

No.

Shareholder

Number (person
/organization)

Number of shares (shares)

Value at face value (VND)

Ratio

I

Domestic shareholders

20,982

498,451,013

4,984,510,130,000

94.15

1

Organization shareholders

90

409,291,750

4,092,917,500,000

77.31

1.1

Of which: PVN

1

400,023,057

4,000,230,570,000

75.56

1.2

Other

89

9,268,693

92,686,930,000

1.75

2

Individual shareholders

20,922

89,159,263

891,592,630,000

16.84

II

Foreign shareholders

112

30,948,987

309,489,870,000

5.85

1

Institutional shareholders

30

29,240,890

292,408,900,000

5.52

2

Individual shareholders

82

1,708,097

17,080,970,000

0.32

Total

21,094

529,400,000

5,294,000,000,000

100.00

Information about major shareholders owning more than 5% of charter capital as of December 31, 2022

Name of shareholder

Business registration number/ID card

Address

Number of shareshold (share)

Proportion/capital (%)

Vietnam Oil and Gas Group - PVN

0106000811

18 Lang Ha, Ba Dinh District, Hanoi

400,023,057

75.56

Total

400,023,057

75.56

Changes in owner’s investment capital

In 2022, the Company has no change in owner’s investment capital.

Treasury shares

Current number of treasury shares: 0 (zero) shares

In 2022, the Company did not conduct treasury stock transactions.

Other Securities

In 2022, the Company did not issue any securities.

steadfast path

Operational situation in 2022