Sulfur prices soar 84%! Yuntianhua's net profit declined 3.4% year-over-year to 5.1 billion last year

On March 23, China’s leading fertilizer company, Yuntianhua (600096), released its latest annual report. The company achieved revenue of 48.415 billion yuan in 2025, a decrease of 21.47% year-on-year; net profit was 5.156 billion yuan, down 3.4% year-on-year. The decline in revenue was mainly due to the company’s focus on core business and proactive reduction of trading business scale based on market conditions, leading to a year-on-year decrease in trade income.

Yuntianhua stated that during the reporting period, fluctuations in raw material prices significantly affected the company’s profit stability. In 2025, due to international, domestic situations and policy influences, raw material price volatility posed high risks. Under the current supply tight balance affected by multiple factors, the company’s large purchases of bulk raw materials such as electricity, natural gas, sulfur, and coal, and the high proportion of raw materials in the cost of its products, had a substantial impact on costs.

In 2025, sulfur purchase prices soared 84% year-on-year to 2,191 yuan per ton. Although energy prices for natural gas and coal declined, the sharp increase in sulfur prices, an essential raw material for phosphate fertilizer production, still exerted significant cost pressure.

From production and sales data, in 2025, Yuntianhua produced 4.6388 million tons of phosphate fertilizer and sold 4.5041 million tons; sales of compound (mixed) fertilizer slightly exceeded production, reaching 2.0427 million tons; urea production was 2.8921 million tons, with sales of 2.8455 million tons; yellow phosphorus production was 30,500 tons, with sales of 17,900 tons.

Notably, resource advantages provided a buffer against cost fluctuations. During the reporting period, phosphate ore market prices remained stable around a high median, with a total of 11.7375 million tons of finished mineral produced. Additionally, in December of that year, Yuntianhua’s associate company, Polyphosphor New Material (holding 35%), obtained mining rights for Wanchang phosphate mine in Zhenxiong County, with a resource volume of 2.438 billion tons, further strengthening the company’s phosphate mineral resources.

In 2025, Yuntianhua continued to optimize capacity. Through technological upgrades during the period, subsidiaries Tianan Chemical and Dawei Ammonia jointly increased their ammonia synthesis capacity from 500,000 tons/year to 580,000 tons/year; Jinxin Chemical increased its ammonia capacity from 500,000 tons/year to 640,000 tons/year, and urea capacity from 800,000 tons/year to 1.12 million tons/year.

On the same day, Yuntianhua also announced that it plans to distribute a cash dividend of 12 yuan per 10 shares (tax included) to all shareholders, combined with the 365 million yuan dividend paid in the first half of 2025, totaling 2.552 billion yuan in cash dividends for 2025, accounting for 49.5% of net profit.

Yuntianhua is one of the largest fertilizer producers in China, with business covering fertilizers, phosphate mining and processing, phosphate chemicals, new materials, and trade logistics. By the end of 2025, the company’s phosphate reserves reached nearly 800 million tons, with an ore production capacity of 14.5 million tons per year; total fertilizer capacity exceeded 10 million tons per year, including over 2.9 million tons of urea, 5.55 million tons of phosphate fertilizer, and 1.85 million tons of compound fertilizer; capacity for melamine was 90,000 tons/year; and feed-grade calcium phosphate capacity was 500,000 tons/year.

Looking ahead to 2026, the company plans to produce and sell 2.8 million tons of urea, 4.63 million tons of phosphate fertilizer, and 2 million tons of compound fertilizer; and produce and sell 600,000 tons of feed-grade calcium phosphate, 116,000 tons of melamine, 30,000 tons of yellow phosphorus, and 110,000 tons of iron phosphate.

As of the close on March 24, Yuntianhua’s stock price was 34.51 yuan per share, down 5.94% for the day, with a total market value of 62.911 billion yuan.

(Source: The Paper)