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DPM [M-PF +3.7%] - Strong fuel oil prices flatten 2018 earnings growth - Update

We downgrade DPM from OUTPERORM to MARKET PERFORM (M-PF) given an expected rise in input gas cost will wipe out 2018 earnings contribution from new NH3-NPK plants. H1 2017 NPAT-MI dropped 42.2%YoY to USD20 million, mainly due to weak urea sales volume and rising input gas cost. The chemicals segment was also weak. We forecast 2017 EPS to drop by 29.6% on expected lower sales volume, flat urea prices and soaring input gas prices.