Incitec Pivot has warned shareholders of a challenging future, as it deals with a weak cycle for the mining sector and a looming jump in manufacturing costs.
However the explosives and fertiliser manufacturer was controlling costs to offset that and believed it could capitalise on Asian demand for commodities and the US shale gas boom, chairman Paul Brasher told Incitec's annual general meeting.
Falls in the Australian dollar's US value were also welcome, with every one cent fall worth an extra $9 million in earnings, the company said.
Demand for Incitec Pivot's explosives is strongly leveraged to the mining industry and Asia's demand for commodities.
"While the future is positive, there will be challenges," Mr Brasher said.
"Our company will confront issues beyond our control - input costs, exchange rates, global prices - but we will continue to succeed if we maintain our focus on those things which underpin our performance."
Incitec has warned that it expects a decline in earnings next year after achieving 21 per cent growth in underlying net profit to $356.3 million.
Gas also represents a high proportion of its manufacturing costs at a time when the price of domestic gas is set to rise sharply, due to the looming start of exports from Queensland's burgeoning gas sector.
Mr Brasher called for a coherent energy policy that encourages new supply from junior companies to ensure manufacturers get reliable, reasonably priced gas.
"This always leaves us open to accusations of rent seeking but, in fact, it is a call for a coherent energy policy for this country which is sorely needed as a basis for our economic future," he said.
Incitec Pivot recently struck a deal with central Australia-based Central Petroleum to buy its natural gas to head off the supply crunch, but is not yet in production.
Despite falls in commodity prices, China was still projected to grow at more than seven per cent in 2015, underwriting strong demand for its products, Mr Brasher said.
The re-industrialisation in the US, driven by the energy revolution, meant its new $US850 million ammonia plant in Louisiana was well placed to deliver strong returns when it started operating in 2016.
Incitec Pivot's shares gained seven cents to $3.21 and are up 20 per cent this year.
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