As fire ravages the eastern states it is bizarre that today fertiliser and explosives group Incitec Pivot (ASX: IPL) was reporting a drop in profit caused by massive floods in North Queensland.
The company reported EBIT of $304 million for the year ended 30 September, down from $557 million the year before largely because of flood losses.
Incitec’s fertiliser business was hit by a $140 million of non-recurring items following February’s rail outages in Queensland caused by the state’s one in a hundred year flood.
The loss was of product not made as a result of the rail line closure between Townsville and Phosphate Hill.
The fertiliser business was also hit to the tune of $43 million by the rising cost of gas to industrial users in eastern Australia.
Incitec’s Dyno Noble explosives business was also hit by the effects of adverse weather subduing market conditions.
However Dyno Noble has increased market share in North America, with its premium blasting technologies including electronic detonation systems gaining market acceptance.
There was a 31 per cent increase in electronic detonator sales in the US and a 54 per cent increase in Asia Pacific.
Incitec Pivot CEO Jeanne Johns said that despite non-recurring issues, the fundamentals of the business were strong.
She said: “We are pleased with the progress we have made on our strategic agenda, including the roll-out of our manufacturing excellence strategy to deliver top quartile reliability across our four major plants by 2022.
“We have a clear focus on our underlying performance and driving improvements in what we can control in our fertilisers business…ensuring we are well placed to benefit when weather conditions and global commodity prices improve.
“The fundamentals unerpinning our Dyno Noble business are strong with significant upside from our manufacturing excellence programme.”
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