Incitec (ASX: IPL) focuses on commercial discipline and cost management to drive profitability

4 min read | February 06, 2024 11:36 AM AEDT | By Team Kalkine Media

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Incitec (ASX: IPL) focuses on commercial discipline and cost management to drive profitability — Image source: © Bogdanhoda | Megapixl.com

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Highlights

Incitec is an ASX-listed chemicals company that operates through two business segments, Incitec Pivot Fertilisers and Dyno Nobel

In FY23, IPL’s revenue decreased by 5% YoY and EBIT fell by 40.76% YoY

Janchor Partners Limited has the maximum stake in IPL, with a shareholding of around 8.91%

Incitec Pivot Limited (ASX:IPL) is a chemicals company that caters to the resources and agriculture sectors through its two business segments, Incitec Pivot Fertilisers and Dyno Nobel. Incitec Pivot is a supplier of bulk commodities and Dyno Nobel provides blasting services and industrial explosives.

In the financial year 2023 (FY23), the company witnessed around 5% YoY drop in its revenue to AUD 6,008.10 million, due to decrease in commodity prices from the historic high in FY22. During the reported period, EBIT decreased by 40.76% YoY to AUD 879.80 million and group NPAT declined by 44.76% YoY to AUD 560 million.

FY23 earnings were the second-highest since 2008, supported by continued technology and customer growth.

Top 10 shareholders of IPL

The top 10 shareholders of IPL have around 37.10% shareholding in the company, while the top four have nearly 25.28% shareholding. The top two shareholders of IPL are Janchor Partners Limited and Allan Gray Australia Pty Ltd, with a shareholding of ~8.91% and 6.11%, respectively.

Recent business update

Through an ASX update dated 25 January 2024, the company informed that it would return AUD 500 million to shareholders through an AUD 0.1557 per share equal capital reduction and an unfranked special dividend of AUD 0.1071 per share. Record date for the return of capital and special dividend was 1 February 2024 and payment date is 8 February 2024.

Outlook

For the Dyno Nobel business, the company expects that market conditions will be positive in Australia, including a firm, short-term demand outlook for iron ore and coal, and a tightening AN market.

In the first two months of FY24, the Waggaman plant made USD 38 million revenue, before the sale completion on 1 December.

The company expects its profitability to grow backed by continuous commercial discipline and more focus on cost management. The company believes that its premium technology provides a competitive edge in the market, which prioritises value over cost.

Share performance of IPL

IPL shares closed at AU$2.67 apiece on 6 February 2024. In the last 12 months, IPL’s share price has decreased by 17.05% and in the past three months, it has increased by 4.96%.

The 52-week high of IPL is AUD 3.27, recorded on 16 February 2023, while the 52-week low is AUD 2.35, recorded on 15 June 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 06 February 2024. The reference data in this report has been partly sourced from EODHD/Others.

Disclaimer

This article has been prepared by Kalkine Media, echoed on the website kalkinemedia.com/au and associated pages, based on the information obtained and collated from the subscription reports prepared by Kalkine Pty. Ltd. [ABN 34 154 808 312; AFSL no. 425376] on Kalkine.com.au (and associated pages). The principal purpose of the content is to provide factual information only for educational purposes. None of the content in this article, including any news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations, and video is or is intended to be, advisory in nature. The content does not contain or imply any recommendation or opinion intended to influence your financial decisions, including but not limited to, in respect of any particular security, transaction, or investment strategy, and must not be relied upon by you as such. The content is provided without any express or implied warranties of any kind. Kalkine Media, and its related bodies corporate, agents, and employees (Kalkine Group) cannot and do not warrant the accuracy, completeness, timeliness, merchantability, or fitness for a particular purpose of the content or the website, and to the extent permitted by law, Kalkine Group hereby disclaims any and all such express or implied warranties. Kalkine Group shall NOT be held liable for any investment or trading losses you may incur by using the information shared on our website.

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