Incitec Pivot’s Shares Plunged On ASX After Reporting 35% Decline In FY 2018 NPAT

  • Nov 13, 2018 AEDT
  • Team Kalkine
Incitec Pivot’s Shares Plunged On ASX After Reporting 35% Decline In FY 2018 NPAT

Incitec Pivot Limited’s (ASX: IPL) shares decreased by 5.437 percent, following the release of its full-year results on 13 November 2018. The company delivered Net Profit After Tax (NPAT) after minority interests of $207.9 million in FY 2018 which is 34.8 percent less than FY 2017. NPAT excluding Individually Material Items (IMIs) increased by $28.7 million or 9% to $347.4 million when compared to FY 2017 NPAT ex IMIs of $318.7 Mn. The Group revenue of the company increased by 11.0% to $3,856.3 Mn as compared to $3,473.4 Mn in FY17. The Operating cash flows increased by $15.0 Mn or 2.3% to $662.7 Mn as compared to the prior year. The Explosives earnings for the year increased by US$12.4 Mn or 10.5% of US$130.2 Mn driven by market growth and share gains.

According to company’s CEO Mr. Jeanne Johns, the company delivered a strong result with full-year EBIT ex IMIs up 11 percent to $557 Mn. The company reported a good uplift in operating performance across its portfolio, including the explosives businesses in the US and Australia, which were benefited from strong underlying mining and quarry & construction demand.

The company also reported about the record production at the Moranbah ammonium nitrate plant and an outstanding second year of production at the Waggaman Louisiana ammonia plant. The new ammonia plant in the US operated at 103% of its nameplate capacity for its first full year of production. UAN production from Cheyenne was down by 9.8% compared to the corresponding previous period, as a result of the turnaround completed in November 2017 and an unplanned outage in April 2018. Ammonium nitrate production from the plant increased by 2.9% compared to the previous corresponding period, with the major turnaround commencing in September 2017 impacting production in both FY17 and FY18.

In September 2018, IPL refinanced its Syndicated Term Loan (AUD360 Mn and USD217 Mn) that was going to mature in October 2018. The refinanced Syndicated Term Loan includes two tranches: Tranche A has a limit of A260 Mn and Tranche B has a limit of US$220 Mn.

In Dyno Nobel Americas segment, the explosives business of the company is expected to generate moderate earnings growth in FY 2019 through higher volumes in the Quarry & Construction (mid-single-digit) and Base & Precious Metals (low single digit) sectors. It is expected that the Waggaman plant will continue its strong production performance from FY 2018, at slightly above nameplate capacity, with no planned outages scheduled for FY19.  Agriculture & Industrial Chemicals production volumes are expected to be higher, with no major turnarounds planned for FY 2019. In Dyno Nobel Asia Pacific Segment, the Sales volumes are expected to remain strong across all sectors in FY19 underpinned by robust mining activity, particularly in the Bowen Basin. In Fertilizers Asia Pacific Segment, it is expected that the Phosphate Hill plant will produce approximately 1 million mt of ammonium phosphates in FY19.

In the last six months, the share price of the company increased by 20.86 percent as on 12 November 2018. IPL’s shares traded at $4.00 with a market capitalization of circa $6.9 billion as on 13 November 2018 (AEST 2:48 PM).


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