China XLX Fertiliser Reports Decline in Profits but Growth in Core Product Margins for Q1 2024

China XLX Fertiliser Ltd. reported a consolidated revenue of RMB 5,750 million for the first quarter of 2024, marking an 8% year-over-year decrease. The income attributable to owners also fell by 15% to RMB 282 million. Despite these challenges, the company experienced stability and growth in the gross profit margins of its core products, largely due to increased promotion of high-efficiency fertilisers and differentiated products.

The company's financial results highlighted a 17% decrease in consolidated net profit, amounting to roughly RMB 383 million. This downturn was influenced by higher investments in research and development as well as elevated marketing expenses aimed at promoting product differentiation. The production of urea saw a significant rise, with a year-over-year increase of 19% in production, supported by the commissioning of a new 700,000-ton urea project at its Xinxiang Production Base.

The company also reported notable performance in other areas, such as methanol, with revenue up by 20% due to increased production and sales. The methanol segment benefitted from reduced costs and increased demand, leading to a desirable rise in gross margin. Conversely, the revenue from medical intermediate products saw a decrease of 23%, as the company strategically suspended less profitable production lines.

Looking forward, China XLX anticipates enhanced market conditions for its fertiliser products, supported by agricultural demand in the upcoming peak season. The company also plans to maintain its competitive edge through strategic investments in production capacity, research and development, and new production bases aiming to enhance its reach in both domestic and Southeast Asian markets.