Fertiliser and explosives heavyweight, Incitec Pivot Limited (IPL), has lifted its after-tax net profit for the year to September 30 to almost $319 million, despite tough fertiliser trading conditions.
The company will use the eight per cent profit rise as an opportunity to buy back up to $300 million in shares, in addition to paying a final unfranked dividend of 4.9 cents a share.
Fertilser earnings before interest and tax (EBIT) were down by almost 2pc, while overall the company’s overall EBIT jumped 17pc.
IPL described its fertiliser division performance as a strong result given poor global demand from croppers and low fertiliser prices.
Incitec’s total revenue rose 3.6pc to $3.5 billion, from $3.4b in 2015-16, driven largely by record earnings from explosives.
Its new Waggaman nitrogen plant in Louisianna, USA, proved “a major highlight of the year”, with the project completed on time and under budget and now producing ammonia volumes beyond expectations.
The plant began operating in October 2016 and was this week described by IPL chief financial officer, Frank Micalleff, as the “most successful new nitrogen investment in North America in many years”.
Incitec’s US pre-tax earnings jumped 46pc, driven by strong quarry and construction demand for explosives and a resurgent coal and base metals sector.
The company has also welcomed a new managing director this week as James Fazzino stepped down after eight years in the job.
His replacement, Jeanne Johns, previously ran industrial and commodity-based businesses in the US, Asia and the UK.
IPL chairman, Paul Brasher, said the strong result in 2017 and the commissioning at Waggaman had left IPL in a “stronger business position to meet the challenging market conditions” and with net debt down 7.3pc.
Mr Brasher said the departing Mr Fazzino left a legacy of successful transformation at IPL and an embedded culture of continuous improvement.
“Under James’ leadership, IPL has grown six-fold,” he said.
“In particular, he was instrumental in the integration of the Dyno Nobel acquisition, the construction and successful operation of world scale nitrogen plants at Moranbah, Queensland, and Waggaman and the establishment of IPL’s business model for continuous improvement and productivity, BEx.”
His replacement, Ms Johns looked forward to “building on IPL’s solid foundation”.
IPL’s share price has responded to this week’s solid result climbing from $3.74 on Monday to almost $4 each – the best price in two years.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
