Duc Giang Chemicals' profit dropped to its lowest point in nearly five years during the first quarter, primarily due to the suspension of a key raw material mine for investigation and a significant increase in input costs. The company's chairman and vice chairman were also temporarily detained on allegations of illegal mineral exploitation and waste dumping, further impacting operations.
According to its QI financial report, Duc Giang Chemicals recorded a 24% decrease in net revenue, reaching 2,125 billion dong. Sales of finished products remained the largest contributor to the company's revenue, accounting for 99%, equivalent to 2,122 billion dong. The enterprise primarily sells products related to yellow phosphorus, chemicals, and detergents.
The profit margin declined from 34.8% to 23%, its lowest in six years, as the cost of goods sold only decreased by 10%. Financial and selling expenses decreased, while general and administrative expenses increased.
As a result, Duc Giang Chemicals reported a post-tax profit of 430 billion dong, a 49% decrease compared to QI/2025. Post-tax profit attributable to parent company shareholders also fell 49% to 409 billion dong, the lowest since QIII/2021.
According to an explanation submitted by the company to the Ho Chi Minh City Stock Exchange (HoSE), the decrease in QI profit was due to declining revenue, while input material costs for items such as sulfur, electricity, coke, and ammonia rose sharply.
Additionally, in the first quarter, Khai truong 25 temporarily ceased operations for investigation purposes. This led the company to use entirely imported and externally purchased ore, resulting in higher cost of goods sold for yellow phosphorus compared to QI/2025.
On 17/3, the Investigation Police Agency of the Ministry of Public Security initiated legal proceedings and temporarily detained Dao Huu Huyen, Chairman of Duc Giang Chemicals, and his son Dao Huu Duy Anh, Vice Chairman and former General Director of the company. This was due to a series of violations including illegal waste dumping and mineral exploitation. Khai truong 25 in Lao Cai province has also been suspended since then to facilitate the investigation.
Vietcap Securities noted that Duc Giang Chemicals currently self-supplies apatite ore from Khai truong 19B and Khai truong 25 at significantly lower costs compared to market prices. Khai truong 25 began exploitation in 2022, with approved reserves of approximately 2 million tons (converted to type one ore).
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Duc Giang Chemicals Group Joint Stock Company is located in Tang Loong industrial park (Tang Loong commune, Lao Cai province). Photo: Ngoc Thanh |
As of 31/3, Duc Giang Chemicals' total assets reached 18,093 billion dong, a 7.5% decrease compared to the end of last year. Bank deposits, specifically, decreased from 13,106 billion dong at the beginning of the period to 11,255 billion dong, though still accounting for 62% of total assets.
To date, Duc Giang Chemicals has not yet released its audited 2025 financial report, which is 30 days later than stipulated. The company submitted an explanation to the State Securities Commission and HoSE, requesting an extension for the submission deadline past 30/3. The enterprise committed to completing the report with its auditing firm and disclosing information as soon as conditions permit.
The company also requested to postpone this year's annual general meeting, which was scheduled for 30/6. Duc Giang Chemicals stated its desire to await the results of the additional board member election at the 2026 extraordinary general meeting on 8/5, as well as the audited 2025 financial report.
Trong Hieu
