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DPM [O-PF +18.4%] - A pure dividend play while waiting for long-term growth - Update

We cut the target price for DPM 6.3% but maintain O-PF recommendation with TSR of 18.3%. We forecast 2017 earnings to decline by 9.7% YoY on margin compression because input gas prices recovered faster than urea prices and not yet contribution from NH3-NPK plants. The NH3-NPK project will contribute significantly for DPM from 2018 onward but we assume DPM will need to make provision of ~USD4.4 million p.a. to pay off a PVTex loan.