Incitec Pivot losses continue following plant closure and sale

Explosives and fertiliser manufacturer Incitec Pivot’s losses continued during FY24 as it unwinds the effects of the closure of its Gibson Island, Brisbane fertiliser plant and the sale of its troubled Waggaman, Louisiana ammonia facility.

The company reported a net loss after tax including individually material items (IMIs) of $311 million, down from FY23’s profit of $560 million.

IMIs totalling $712 million relating primarily to a non-cash impairment of the Australian fertilisers business, a non-cash impairment of the US fertilisers business, separation costs, business transformation costs and Dyno Nobel Asia Pacific site closure costs.

This was partly offset by a gain on sale of IPL’s ammonia manufacturing facility in Waggaman, Louisiana.

IPL also reported Earnings Before Interest and Tax (EBIT) excluding IMIs of $580 million, down from $880 million in FY23.

The principal driver of the reduced earnings was the sale of Waggaman and the closure of fertiliser manufacturing at Gibson Island, Queensland which failed to secure ongoing supplies of gas.

CEO & Managing Director Mauro Neves said: “Our headline results reflect the sale of Waggaman, the closure of Gibson Island and portfolio restructuring.

“IPL delivered a strong underlying performance in FY24, with improved normalised earnings, reflecting growth and operational improvements in all customer facing businesses.”

Underlying EBIT growth was 18 percent compared to the prior corresponding period (pcp) after adjusting for the closure of manufacturing at Gibson Island and the sale of Waggaman.

Incitec Pivot failed to sell to an overseas bidder in July, with Neves confirming the company’s intention to separate its explosives and fertiliser businesses, divesting fertilisers.

“Dyno Nobel Asia Pacific delivered a record EBIT, with a 36 percent improvement year on year, as major
resource sector customers like Peabody, Fortescue and BHP Mitsubishi Alliance, recommitted to contracts and use of our innovative technology to unlock value in their businesses.

“Dyno Nobel Americas underlying performance increased 15 percent on the back of improved pricing discipline and cost management initiatives.”

Further reading:
Incitec Pivot fails to secure gas supplies, to close Gibson Island
Incitec Pivot sells troubled Waggaman plant
Incitec fertiliser business sale to PT Pupuk falls over

Picture: Incitec Pivot/Gibson Island failed to secure gas supplies during FY24