Duc Giang Chemicals (DGC) Q2 2026 Net Profit Falls 50%, Proposes 80% Cash Dividend

Overview

Duc Giang Chemicals (DGC) reported a 50.5% decline in Q2 2026 net profit to VND 441 billion, with H1 2026 revenue falling 20% to VND 4,540 billion. The company attributed the drop to higher raw material costs and a temporary suspension of its mine 25. Concurrently, DGC proposed an 80% cash dividend for 2025, reflecting strong cash reserves.

Key Facts

• Q2 2026 net profit: VND 441 billion, down 50.5% YoY from VND 891 billion.
• Q2 2026 revenue: VND 2,415 billion, down 17% YoY from VND 2,894 billion.
• H1 2026 revenue: VND 4,540 billion, down 20% YoY from VND 5,705 billion.
• H1 2026 net profit: VND 871 billion, down 50% YoY from VND 1,728 billion.
• Gross profit in Q2 2026 fell 53.5% to VND 456 billion due to rising input costs (sulfur, electricity, coke, ammonia).
• Mine 25 temporarily halted for investigation, forcing reliance on imported and purchased ore, raising costs for yellow phosphorus.
• Total assets at June 30, 2026: VND 19,271 billion, down 1.37% from year-end 2025.
• Proposed 2025 cash dividend: 80% (30% already paid, 50% to be paid).
• 2026 full-year guidance: revenue VND 10,100 billion, net profit VND 1,600 billion.

What Happened

Duc Giang Chemicals (DGC) released its Q2 2026 consolidated financial statements, revealing a sharp decline in profitability. Net profit for the quarter fell 50.5% to VND 441 billion, while revenue dropped 17% to VND 2,415 billion. The company cited higher costs for raw materials such as sulfur, electricity, coke, and ammonia, as well as the temporary suspension of mine 25 for investigation, which forced the use of more expensive imported and purchased ore for yellow phosphorus production.

For the first half of 2026, cumulative net profit reached VND 871 billion, down 50% from VND 1,728 billion in H1 2025. Revenue for the period was VND 4,540 billion, a 20% decline. Despite the earnings miss, DGC announced a proposal for an 80% cash dividend for 2025, with 30% already distributed and the remaining 50% to be paid. The company also set a 2026 business plan targeting VND 10,100 billion in revenue and VND 1,600 billion in net profit.

Market Context

DGC shares closed at VND 43,000 on July 21, 2026, on the HOSE. The stock has likely faced pressure from the weak earnings report, though the high dividend proposal may provide some support. The chemicals sector in Vietnam has been impacted by rising input costs and global commodity price volatility. DGC’s large cash position (nearly VND 10,922 billion) provides a buffer, but the operational challenges from mine 25’s suspension and cost inflation remain key concerns.

Strategic Significance

The earnings decline underscores DGC’s vulnerability to input cost fluctuations and operational disruptions. The temporary mine closure highlights dependency on captive ore supply for cost advantage in yellow phosphorus. The 80% cash dividend signals management’s confidence in liquidity and commitment to shareholder returns, but the 2026 guidance implies a recovery in H2, which may be optimistic given current headwinds. Long-term investors should monitor the mine 25 situation and cost trends.

What to Watch

• Resolution of mine 25 investigation and resumption of operations.
• Q3 2026 earnings release to assess recovery trajectory.
• Raw material price trends (sulfur, electricity, coke, ammonia).
• Execution of 2026 full-year guidance (revenue VND 10,100 billion, net profit VND 1,600 billion).
• Dividend payment schedule for the remaining 50% cash dividend.