Incitec reflects on tough year
Incitec Pivot's James Fazzino (left) and Paul Brasher. Photo: Eddie Jim
IT WAS an annual result one broker said ''should largely be seen as being as bad as it gets''.
Now fertiliser and explosives company Incitec Pivot has shrugged off a ''tough'' 2012, expressing optimism about its medium and long-term outlook, driven by the industrialisation of Asia.
Incitec Pivot reported a 24 per cent fall in profit, excluding individually material items, to $404.7 million. Earnings before interest from its fertiliser arm fell by 40 per cent to $270.9 million. By contrast, its explosives unit increased EBIT by 8 per cent to $399.9 million.
New chairman Paul Brasher told shareholders at the annual meeting in Melbourne that the results were disappointing. ''Some parts of our business have performed extremely well and others have had a difficult year,'' he said.
''Overall, the results have been disappointing, which has resulted from a combination of external factors, such as exchange rates and commodity prices, which to a large extent are beyond our control, and a few areas which we could have done better.''
Shares in Incitec Pivot closed 1 per cent lower on Tuesday at $3.21.
Royal Bank of Scotland analysts said last month that the market ''should now turn its attention to the growth opportunity that the Moranbah [ammonia] project provides and Incitec Pivot's earnings skew to the higher-quality explosives business in the next couple of years''.
The new Moranbah project, in Queensland's Bowen Basin, was on track to produce 250,000 tonnes of ammonium nitrate this financial year, the company said.
Chief executive James Fazzino said he expected ''strong returns'' from its Dyno Nobel Asia Pacific explosives business in the medium term.
''With Dyno Nobel Americas, we believe that there will be significant medium-term growth on the back of the US economic recovery, which is being driven by energy self-sufficiency,'' he said.