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Incitec Pivot releases financial results

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World Fertilizer,

Incitec Pivot has announced results for the half year ended 31 March 2020.

Key financial metrics

  • Statutory NPAT: AUS$65 million, up 22% from AUS$42 million in HY19.
  • Earnings before interest and tax (EBIT): AUS$159 million, up 34% from AUS$118.7 million in HY19
  • Earnings per share (EPS): 4 cents per share, up from 2.6 cents per share in HY19.
  • Operating cash flow: AUS$152 million, up from a cash outflow of AUS$35 million in HY19.

Balance sheet

  • Net debt of AUS$1.88 billion, Net debt/EBITDA ratio of 2.8x at 31 March 2020.
  • Capital raising announced today will reduce pro forma net debt to AUS$1276 million and net debt/EBITDA to 1.9x.
  • Capital raising will strengthen balance sheet to make our business more resilient in the current uncertain environment and support financial flexibility to pursue disciplined organic growth opportunities.
  • IPL has determined not to pay an interim dividend for the half year.

Covid-19 response

  • Covid-19 response plan in place, with ~AUS$60 million cash savings to be delivered through cost discipline initiatives, and reductions and deferrals in CAPEX.

Fertilisers Asia Pacific

  • EBIT loss of AUS$9.9 million, an improvement from a loss of AUS$32.5 million in HY19.
  • Weak fertilisers volumes in the first four months due to drought conditions as well as historic low commodity prices weighed on performance.
  • Very strong demand over February, March and April reflecting improved weather conditions.

IPL’s Managing Director and CEO, Jeanne Johns, said: “The fertilizers business was weighed down by record low commodity prices, as well as drought conditions in the first four months. Improved weather conditions have driven record demand over the last three months and we are well placed to benefit from any future improvement in global fertilizer prices.

“Our fertilizers business continues to have a prominent market position in Eastern Australia. “The explosives and fertilizer businesses are well positioned for long term customers trends across the essential mining and agricultural industries.

“Covid-19 pandemic brings future economic uncertainty on commodity pricing and demand, and this will inevitably present challenges for every business. However, we are well placed to manage short term risks and continue to leverage our strategically located assets to support our customers.

“The capital raising we announced today will strengthen our balance sheet to make us more resilient in the current environment, as well as keeping the business strong and support the flexibility to pursue disciplined organic growth opportunities to deliver long term shareholder value.”

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