IPL releases FY24 Results 

ASX RELEASE 

11 November 2024

IPL delivers strong FY24 underlying earnings growth

FY24 highlights – Statutory results

Incitec Pivot Limited (ASX:IPL) today reported a net loss after tax including individually material items (IMIs) of $311m (FY23: $560m profit). This result included IMIs totalling $712m (after tax) relating primarily to a non-cash impairment of the Australian fertilisers business.

Other IMIs included a non-cash impairment of the US fertilisers business, separation costs, business transformation costs and Dyno Nobel Asia Pacific site closure costs, offset by a gain on sale of IPL’s ammonia manufacturing facility in Waggaman, Louisiana.

IPL also reported Earnings Before Interest and Tax (EBIT) excluding IMIs of $580m, down from $880m in FY23. The principal driver of the reduced earnings was the sale of Waggaman (sold on 1 December 2023), and the closure of fertiliser manufacturing at Gibson Island, Queensland.

FY24 highlights – Underlying results

IPL delivered underlying EBIT growth of 18% compared to the prior corresponding period (pcp) after adjusting for re-basing items, which relate primarily to the closure of manufacturing at Gibson Island and the sale of Waggaman. A key driver of the improved performance was growth in all customer-facing businesses, with record EBIT achieved by both the Dyno Nobel Asia Pacific business and the Fertilisers Distribution business.   

Financial performance

• Zero Harm: Tragically, IPL lost a valued employee as a result of a fatal incident on a public road. Total Recordable Injury Frequency Rate (TRIFR) for the rolling twelve-month period ended 30 September 2024 was 1.08, up from 0.92¹ at 30 September 2023
• Statutory Net Loss After Tax and IMIs²: $311m (FY23: $560m profit)
• NPAT ex IMIs: $401m (FY23: $582m)
• EBITDA ex IMIs: $925m (FY23: $1,215m)
• Earnings Per Share ex IMIs:7 cents per share (FY23: 30.0 cps)
• Return on Invested Capital including goodwill (ROIC):3% (FY23: 6.1%)
• Final dividend of 6.3 cents per share (unfranked) representing a 50% payout ratio
• Capital management: $500m capital return completed; $900m on-market share buy-back program ongoing with $149m completed in FY24.³

Business performance

Dyno Nobel Asia Pacific: Record EBIT of $257m (FY23: $188m) with earnings and margins increasing strongly. Customer recontracting as well as operational improvements returned margins to appropriate levels with further benefits delivered from the steady uptake of Dyno Nobel’s premium technology suite, particularly electronic detonators, and Differential Energy emulsions.

Dyno Nobel Americas: EBIT of US$172m (FY23: US$390m) with the reduction in earnings largely due to the sale of the Waggaman facility. US explosives earnings of US$132m (FY23: US$117m) increased 13% on the pcp supported by improved margins driven by cost management initiatives and successful recontracting.  

Fertilisers Asia Pacific: EBIT of $120m (FY23: $153m) with the result impacted by the closure of Gibson Island and reduced manufacturing performance at Phosphate Hill. The Distribution business delivered a strong year, reflecting improved customer demand and effective management of fertiliser supply chains.

Sustainability and decarbonisation

During 2024 IPL completed the installation of the Moranbah N₂O Tertiary Abatement Project, the first of several major capital projects that will significantly reduce greenhouse gas emissions against its 2020 baseline. Having successfully completed this project, IPL will deliver a similar project at its Louisiana, Missouri (LOMO) facility, with a commitment to completing this installation in 2025. The business was also a winner of Chemistry Australia’s 2024 HSE Award, in recognition of IPL’s safe closure of the Gibson Island manufacturing facility with zero reportable incidents.

Commentary from IPL’s CEO & Managing Director

CEO & Managing Director, Mauro Neves, said:

“Our headline results reflect the sale of Waggaman, the closure of Gibson Island and portfolio restructuring. IPL delivered a strong underlying performance in FY24, with improved normalised earnings, reflecting growth and operational improvements in all customer facing businesses.”

“Dyno Nobel Asia Pacific delivered a record EBIT, with a 36% improvement year on year, as major resource sector customers like Peabody, Fortescue and BHP Mitsubishi Alliance, recommitted to contracts and use of our innovative technology to unlock value in their businesses.

“Dyno Nobel Americas underlying performance increased 15% on the back of improved pricing discipline and cost management initiatives.

“Despite a challenging first half, our efforts to enhance operational efficiency and reliability have delivered significant improvements at Phosphate Hill, with the site finishing the year strongly. Pleasingly, our Distribution business delivered its strongest result on record with an EBIT of $60m, positioning this business well for the future alongside a strong agricultural industry.

“We remain committed to delivering the Fertilisers separation in the next six to twelve months, with a potential divestment in parts to maximise value and increase execution certainty. We have confirmed the closure of the Gibson Island primary distribution centre and will be transitioning to a third-party facility operated by Qube at the Port of Brisbane. This will significantly modernise IPF's Brisbane PDC capability, enabling us to meet our customers’ expectations well into the future.

“The decision to relocate the PDC allows us to progress our plans to sell our real estate holdings at Gibson Island. We have also made the decision to cease manufacturing single super phosphate at the Geelong manufacturing facility before the end of 2025 and sell the IPF Distribution business.”

“Our commitment to zero harm is non-negotiable. The tragic loss of our colleague, while driving on a Queensland public road in the first half of FY24, reminds us of the importance of our relentless pursuit of this goal. Our aim is to ensure a safe workplace for our people every day, and this remains our focus going forward.

“This has been a year of transformation for the company, and I am pleased with the progress we are making on our strategy of methodically exiting the IPF business and building a leading global explosives business.”

“I’m very proud of the professionalism and commitment of our teams around the world, and as we head into 2025 we are well positioned for further success.”

Outlook

The outlook for FY25 is expected to be strong, supported by transformation activities focusing on areas such as price discipline and cost management, recontracting benefits and improved margins from technology. Turnarounds in FY25 are expected to have an earnings impact of $45m to $55m for the year.

Further information on the FY25 outlook for IPL’s business segments is contained on page 16 of the FY24 Profit Report.  

 

You can find a link to our ASX release and Profit Report here.

 

¹ 1H23 TRIFR has been restated due to the inclusion of the Titanobel business.

² Statutory Net Loss After Tax includes IMIs of $712m (loss) after tax (FY23: $22m loss). FY24 IMIs largely relate to a non-cash impairment of the global fertilisers business which was partially offset by a gain on the sale of IPL’s ammonia manufacturing facility in Waggaman, Lousianna.

³ Although it is IPL’s current intention to recommence buyback activity following today’s results, any purchases under the program remain at IPL’s discretion.  Please refer to IPL’s Notice of 2023 Annual General Meeting and Investor Showcase Presentation dated 16 September 2024 for further details.

 

 

This document has been authorised for release by Richa Puri, Company Secretary.

This announcement contains certain forward-looking statements, including statements in relation to expectations, intentions, estimates, targets, and indications of, and guidance on, future outcomes, earnings, future financial position and performance and the implementation of IPL’s strategy. The words “expect”, “would”, “could”, “potential”, “may”, “intend”, “will”, “believe”, “estimate”, “aim”, “target” and “forecast” and other similar expressions are intended to identify forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of IPL, its officers and employees. There can be no assurance that actual outcomes will not differ materially from these statements. There can be differences between forecast and actual results because events and actual circumstances frequently do not occur as forecast and their differences may be material.  Undue reliance should not be placed on forward-looking statements.  IPL disclaims any responsibility to update or revise any forward-looking statement to reflect any change in IPL’s financial condition, status or affairs or any change in the events, conditions or circumstances on which a statement is based, except to the extent required by law.  Additionally, to the maximum extent permitted by law, IPL and its affiliates, directors, officers, partners, employees, agents and advisers disclaim any responsibility for the accuracy or completeness of any forward-looking statements whether as a result of new information, future events or results or otherwise.