Vanadium and titanium shares 'net profit in the third quarter fell 80% year-on-year, and the imbalance between supply and demand of products and prices remained low.
On October 18, Vanadium and Titanium Co., Ltd. released its third quarterly report. In the third quarter of 2024, revenue was 3.316 billion yuan, a year-on-year decrease of 6.04%, and net profit attributable to the parent company was 45.9257 million yuan, a year-on-year decrease of 82.74%. Revenue in the first three quarters was 10.474 billion yuan, a year-on-year decrease of 6.12%, and net profit attributable to the parent company was 183 million yuan, a year-on-year decrease of 78.92%.
The company's semi-annual report shows that in the first half of this year, the company achieved revenue of 7.158 billion yuan, a year-on-year decrease of 6.16%, and net profit attributable to the parent company was 137 million yuan, a year-on-year decrease of 77.23%. The third quarter's results continued the decline in the first half of the year.
Source: The company's 2024 third quarterly report
In the first three quarters, the company's accounts receivable were 181 million yuan, a year-on-year increase of 23.46%, and accounts payable were 879 million yuan, a year-on-year increase of 28.61%.
The report shows that as revenue declines, the company's expenses also decrease. In the first three quarters of this year, the company's sales expenses were 88.6337 million yuan, a slight increase of 3.22% year-on-year, management expenses were 122 million yuan, a year-on-year decrease of 16.64%, and financial expenses were-46.8573 million yuan, a year-on-year increase of 34.38%. R & D expenses were 321 million yuan, a year-on-year decrease of 15.18%, and a year-on-year decline for three consecutive years.
Source: The company's 2024 third quarterly report
Data shows that Pangang Group Vanadium and Titanium Resources Co., Ltd. was established in 1993 and listed on the Shenzhen Stock Exchange in 1996. The company is headquartered in Panzhihua City, Sichuan Province. The company's main business includes vanadium, titanium and power businesses, mainly covering the production, sales, technology research and development and application development of vanadium products and titanium products. The main products include vanadium oxide, vanadium iron, vanadium-nitrogen alloys, vanadium-aluminum alloys, vanadium electrolytes, titanium dioxide, titanium slag, etc. The company is a major vanadium-producing enterprise in China. It is also a major supplier of titanium raw materials in China. It is an important producer of titanium slag, sulfuric acid and chlorinated titanium dioxide in China.
In the first half of 2024, affected by the sluggish macroeconomic environment and the lagging effect of economic stimulus policies, production capacity and output were released, and demand was far lower than expected, resulting in oversupply in both the vanadium and titanium dioxide markets. The price of vanadium products fell. Titanium dioxide was affected by the high operating price of raw materials, and prices rose.
The scale of the company's vanadium products continues to be at the forefront of the world and has strong market competitiveness. However, the price of vanadium products has dropped sharply since last year, with prices falling by about 30% year-on-year in the first half of the year. In the first half of the year, the output of rebar in the main application areas of the vanadium industry fell sharply, but other steel varieties increased, showing a decrease in demand for vanadium and nitrogen and an increase in demand for iron vanadium. The completion and implementation of vanadium energy storage projects have increased appropriately. The overall supply-demand relationship continues in 2023. Excess situation. The company predicts that there will be a weak balance between supply and demand in the second half of 2024, and demand may increase significantly. On the one hand, as the national standard for ordinary hot-rolled rebar is changed from a recommended standard to a mandatory standard, it will be officially implemented on September 25. It is expected that the demand for vanadium and nitrogen may increase significantly; on the other hand, some vanadium energy storage projects are expected to be connected to the grid before the end of the year, thus driving demand for vanadium raw materials.
In addition, the company's sulfuric acid titanium dioxide production capacity is 220,000 tons per year. After the 60,000-ton project is put into operation, the chlorinated titanium dioxide production capacity will increase to 75,000 tons/year. However, terminal demand is currently weak, industry profits have generally fallen sharply, and gross profit margins have continued to fall. Straight Flush iFinD data shows that in the first three quarters, the company's sales gross profit margin has dropped to 6.89%. From 2021 to 2023, the company's sales gross profit margins are 19.92%, 16.30%, and 14.40% respectively, which has dropped significantly since this year.
How is the 60,000 tons of chlorinated titanium dioxide project progressing? On the 18th, a reporter from Fengkou Financial and Economic Affairs contacted Vanadium Titanium Co., Ltd. by phone. Company staff said that the construction of the project has now been basically completed and is in trial production of equipment and is expected to reach production next year. At present, the company's capacity utilization rate has reached 100%. Regarding the price of the company's vanadium-titanium products, the company's work stated that the vanadium-titanium products are currently in a stage of slight fluctuations, which is basically similar to the situation in the second quarter, but overall they are still at a low level. The fourth quarter has just begun, and the impact of the price of vanadium and titanium products on the company's performance is unclear.
Judging from the performance in recent years, the company's revenue scale has been affected to a certain extent during the epidemic and is gradually recovering. Net profit is greatly affected by lower product prices. The annual report shows that in 2023, the company achieved revenue of 143.80 yuan, down 4.69% year-on-year, and net profit attributable to the parent company was 1.058 billion yuan, down 21.32% year-on-year.
