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Incitec Pivot reports annual results

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World Fertilizer,

Incitec Pivot Ltd, the Australia-based fertilizer and explosives manufactuer, has reported Net Profit After Tax (NPAT) of AUS$152 million for the year ended 30 September 2019, after AUS$140 million of non-recurring items (net of tax), mainly due to the impact of the one in one-hundred-year flood event in north Queensland. This compared to NPAT of AUS$208 million in FY18, or AUS$347 million excluding Individual Material Items (IMI).

Summary of results and strategic priorities

  • Zero Harm: TRIFR of 0.80 (FY18: 0.94), progressing towards the company's FY21 target of 0.70.
  • Earnings Before Interest and Tax (EBIT) ex IMIs: AUS$303.7 million, after AUS$197 million of non-recurring items (FY18: AUS$556.7 million).
  • NPAT ex IMIs: down to AUS$152.4 million, after AUS$140 million of non-recurring items (FY18: AUS$347.4 million).
  • Earnings Per Share (EPS) ex IMIs: down to 9.5 cents per share (FY18: 20.9 cents per share).
  • Fertilisers Asia Pacific: EBIT loss of AUS$79.7 million (FY18: profit AUS$104.6m), after AUS$148 million of non-recurring items mainly from the Queensland rail outage, following the one in one-hundred-year flood in north Queensland. EBIT was also impacted by the severe and prolonged drought on the Australian east coast.
  • Australian gas cost: AUS$43 million net adverse movement affecting FY19 Fertilisers earnings due to the impact of higher cost Australian East Coast gas.
  • Manufacturing Excellence strategy progressing, with AUS$40 million-AUS$50 million per annum uplift anticipated by FY22 from improved plant reliability across the Group.
  • Strategic review of Fertilisers business initiated and progressing, with decision to sell, demerge or retain and invest, to be made in FY20.
  • Balance Sheet and Share Buy Back: Net Debt/EBITDA ratio of 2.8x (pcp 1.6x), with completion of previously announced AUS$300 million share buy-back in December 2018.
  • Dividend: Final dividend of 3.4 cents per share, 30% franked. Total dividends for FY19 are 4.7 cents per share, down from 10.7 cents per share in FY18. This represents a 50% payout ratio of NPAT.

Incitec Pivot Limited Managing Director & CEO, Jeanne Johns, said: “We have a clear focus on our underlying performance and driving improvements in what we can control in our fertilizers business moving into FY20, ensuring we are well-placed to benefit when weather conditions and global commodity prices improve."

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