Incitec Pivot recovers from plant outages, floods and accidents

Chemicals and explosives business Incitec Pivot made a strong return to profits for the year ended 30 September, growing profits 23 per cent as it recovered from plant outages, floods and industrial accidents.

The international fertilizer and explosives business grew earnings before interest and tax (EBIT) by 23 per cent to $374.5 million and reduced net debt by $66 million following a successful equity raise which netted $646 million from investors.

However the company decided not to pay a full year dividend because of continuing uncertainties caused by the Covid-19 pandemic.

Incitec Pivot’s previous year’s results were hit by massive unbudgeted costs.

These included $60 million cost associated with a rail outage in Queensland following the Townsville floods, $16 million from a third party gas pipeline rupture in the US and $65 million from outages of its Waggaman and Phosphate Hill fertiliser plants.

This led to a strategic review of the company’s fertilizer business, which the company decided to retain.

In the latest year the company’s Dyno Noble explosives business reported an EBIT of $230.8 million in the Americas, down one per cent on the previous year.

Volumes were impacted by the structural decline in the coal mining market.

Dyno Noble Asia Pacific reported EBIT of $149.3 million, down 17 per cent on the previous year.

The company’s fertilizer businesses increased EBIT to $26.2 million, a turnaround from a loss of $79.7 million, though profits were affected early in the year by drought.

CEO Jeanne Johns said the company’s manufacturing excellence strategy was progressing well, with key plants operating at 86 per cent reliability during the year.

“We…are on track to deliver our reliability target of 95 per cent by FY22.”

Image: Incitec Pivot/Gibson Island

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