Record earnings from explosives and a new ammonia plant in the US have helped Incitec Pivot lift first-half profit to $152.1 million
The explosives, industrial chemicals and fertiliser supplier's net profit for the six months to March 31 was more than four times the $31.5 million profit a year earlier, which featured writedowns, clean-up costs and environmental provisions.
Excluding one-off items, Incitec's profit was up 11 per cent.
The positive earnings from explosives and the contribution from the Waggaman plant in Louisiana more than offset low fertiliser prices.
"The handover of the world-scale Waggaman ammonia plant in the half completed IPL's transformation from an Australian fertiliser co-operative to a global diversified industrial chemicals company," chief executive James Fazzino said on Tuesday.
"Waggaman is expected to continue to influence earnings as the plant moves to full production."
Mr Fazzino, who is stepping down as chief executive by the end of 2017, said Incitec is well positioned as Waggaman moves to full production, quarry and construction potentially gains further momentum, and the benefits of recent coal sector market share gains in the Americas are realised.
He said well-above-average demand for fertilisers in Australia in the first half is expected to continue into the second half, underpinned by encouraging agronomic conditions and improved water storage levels.
Incitec's earnings from explosives, excluding one-off items, rose by 10 per cent to $A161.5 million, partly driven by growth in the quarry and construction sector in the Americas market and resilient demand in the coal and metals markets in the Asia Pacific.
Earnings from industrial chemicals soared 380 per cent to $A75.8 million on the back of initial operational earnings of $US10.8 million from Waggaman and a $US35.1 million payment from the construction contractor for delays.
Fertiliser earnings fell 67 per cent to $A14.8 million as global fertiliser prices fell below their long-term trend.
Incitec Pivot shares were 11 cents, or 2.96 per cent, higher at $3.80 at 1212 AEST.
INCITEC'S HY PERFORMANCE
* Net profit $152.1m v $31.5m
* Revenue up 0.8 pct to $1.54b
* Interim dividend 4.5 cents, unfranked vs 4.1 cents, fully franked in pcp.
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