Improved second half performance delivers strong full year result
Nov 15, 2021Incitec Pivot Limited (ASX:IPL) today reported a Net Profit After Tax (NPAT) of $359m excluding individually material items (IMIs) (1) for FY21, an increase of 91% compared to $188m in FY20.
Statutory FY21 NPAT including IMIs was $149m, an increase of 21% over $123m in FY20.
Highlights
- Zero Harm: Total Recordable Injury Frequency Rate (TRIFR) of 0.87, an increase from 0.58 on the prior corresponding period (pcp)
- NPAT: A$359m, ex IMIs of A$209m, up 91% from A$188m on pcp
- Earnings Before Interest and Tax (EBIT) ex IMIs: A$566m, up 51% from A$374m on pcp
- Earnings Per Share ex IMIs: 18.5 cents per share, up 70% from 10.9 cents per share on pcp
- Strengthened balance sheet with net debt of $1bn and Net Debt/ EBITDA ratio of 1.1x at
- 30 September 2021, down from 1.4x at 30 September 2020
- Return on invested capital (ROIC) improved during the year to 5.8%
- Final dividend of 8.3 cents per share declared, 14% franked; total dividends of 9.3 cents per share for FY21
Dyno Nobel Americas
- Dyno Nobel Americas reported EBIT of US$141m, down 9% on pcp, supported by a strong second half as markets recovered to pre-COVID levels
- Base and Precious Metals volumes increased 22% on pcp with strong demand from gold customers in Canada and metals customers in western USA
- Volumes were stable in Quarry and Construction, and Coal volumes were down 1% on pc (excluding the impact of bankruptcies)
- Strong momentum in technology with sales of Premium Emulsion up 22% and Electronic Detonators up 18% on pcp
- Waggaman performed well in the second half and continues to operate at name plate, with second half earnings supported by a strong upswing in ammonia prices
Dyno Nobel Asia Pacific
- Dyno Nobel Asia Pacific delivered EBIT of A$140m, down 6% or A$9m on pcp absorbing the earnings impact of the planned Moranbah turnaround of A$15m
- Strong momentum in technology continued with a $14m increase on pcp with mining customers continuing to seek out premium technology, outpacing the final recontracting impacts
- While volumes in the Australian business held up well during COVID-19, earnings in Indonesia and Turkey were impacted by COVID-19
Fertilisers Asia Pacific
- Fertilisers EBIT increased to A$268m, up 924% on pcp, with the benefit of the commodity price upswing in the second half of FY21
- Phosphate Hill manufacturing reliability and performance was strong at 958k mt of ammonium phosphates
- Due to not being able to secure affordable gas from 2023, the decision was made to cease manufacturing at Gibson Island at the end of 2022, and increase fertiliser import capacity to continue to support domestic customers
- The business continues to progress its soil health strategy, highlighted by the introduction of Precision Ag and an increase in Nutrient Advantage earnings
Incitec Pivot Limited Managing Director and CEO, Jeanne Johns commented on the Company’s performance:
“The strong full year result reflects the strength of the second half, with strong pull through from technology in explosives and a recovery in our end markets as well as our Fertilisers business capturing the upswing in commodities prices.”
Throughout the last 12 months our number one priority has been the safety of our people as we continued to face the challenges of COVID-19. Our strict protocols and resilient supply chains have enabled us to continue to safely operate and provide our resources and agricultural customers with the high-quality products, solutions and support they need for their businesses.
“Premium technology continues to increase productivity and safety and reduce environmental footprint for our customers, which is underpinning strong demand. Our technology vision is coming to life with our product development work now being commercialised. Our wireless electronic detonator CyberDet ITM (2) has been successfully trialled at a number of customer sites across Australia with further trials planned, and commercial supply arrangements expected to commence in 2022.
“Our Fertilisers business has a high quality stable distribution business with good growth potential as it evolves into a soil health company. During FY21, Precision Agriculture and Nutrient Advantage increased their range of soil tests to meet a sophisticated agricultural sector.
“Reluctantly, we announced last week the cessation of traditional manufacturing at our Gibson Island after our current natural gas contract runs out at the end of 2022, after being unable to secure an affordable long-term gas supply. Importantly, we have positioned Gibson Island for
a potential transition and commercial opportunity in green ammonia.
“We also saw a significant improvement in our manufacturing performance in the second half, with our Waggaman plant performing well following the delayed restart in June. We expect the benefits of our manufacturing reliability to come through following completion of the current turnaround cycle in FY22.
“In addition to our longstanding commitment to sustainability, there was a step change in our work on climate change during the year. We increased our commitment to decarbonisation including setting out a potential Net Zero pathway by 2050 or earlier if practicable. We are
embedding climate change into our strategy to make sure we leverage commercial opportunities as well as manage risks effectively.
“Our pathway to Net Zero requires investigation of new and emerging technologies and key to this is leveraging our world leading ammonia manufacturing expertise. We have recently formed two significant partnerships – with Fortescue Future Industries at Gibson island, and two of Singapore’s leading companies Keppel Infrastructure and Temasek at Newcastle and Gladstone. Both partnerships are investigating the commercial feasibility of manufacturing green ammonia from renewable hydrogen.
“Looking ahead, as we enter FY22 we are well positioned to benefit from the continued execution of our strategy, as we invest in and grow our two strong base businesses in explosives and fertilisers and capture the strength in commodity pricing.”
Throughout the last 12 months our number one priority has been the safety of our people as we continued to face the challenges of COVID-19. Our strict protocols and resilient supply chains have enabled us to continue to safely operate and provide our resources and agricultural customers with the high-quality products, solutions and support they need for their businesses.
“Premium technology continues to increase productivity and safety and reduce environmental footprint for our customers, which is underpinning strong demand. Our technology vision is coming to life with our product development work now being commercialised. Our wireless electronic detonator CyberDet ITM (2) has been successfully trialled at a number of customer sites across Australia with further trials planned, and commercial supply arrangements expected to commence in 2022.
“Our Fertilisers business has a high quality stable distribution business with good growth potential as it evolves into a soil health company. During FY21, Precision Agriculture and Nutrient Advantage increased their range of soil tests to meet a sophisticated agricultural sector.
“Reluctantly, we announced last week the cessation of traditional manufacturing at our Gibson Island after our current natural gas contract runs out at the end of 2022, after being unable to secure an affordable long-term gas supply. Importantly, we have positioned Gibson Island for
a potential transition and commercial opportunity in green ammonia.
“We also saw a significant improvement in our manufacturing performance in the second half, with our Waggaman plant performing well following the delayed restart in June. We expect the benefits of our manufacturing reliability to come through following completion of the current turnaround cycle in FY22.
“In addition to our longstanding commitment to sustainability, there was a step change in our work on climate change during the year. We increased our commitment to decarbonisation including setting out a potential Net Zero pathway by 2050 or earlier if practicable. We are
embedding climate change into our strategy to make sure we leverage commercial opportunities as well as manage risks effectively.
“Our pathway to Net Zero requires investigation of new and emerging technologies and key to this is leveraging our world leading ammonia manufacturing expertise. We have recently formed two significant partnerships – with Fortescue Future Industries at Gibson island, and two of Singapore’s leading companies Keppel Infrastructure and Temasek at Newcastle and Gladstone. Both partnerships are investigating the commercial feasibility of manufacturing green ammonia from renewable hydrogen.
“Looking ahead, as we enter FY22 we are well positioned to benefit from the continued execution of our strategy, as we invest in and grow our two strong base businesses in explosives and fertilisers and capture the strength in commodity pricing.”
2 This proprietary technology is held by DetNet South Africa (Proprietary) Limited, in which IPL holds a 50% interest.
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For more information:
Investors
Geoff McMurray
General Manager Investor Relations
Tel: +61 3 8695 4553
Mobile: +61 418 312 773
Investors
Geoff McMurray
General Manager Investor Relations
Tel: +61 3 8695 4553
Mobile: +61 418 312 773
geoff.mcmurray@incitecpivot.com
Media
Matthew Flugge
Group Vice President Corporate Affairs
Tel: +61 3 8695 4617
Mobile: +61 409 705 176
Media
Matthew Flugge
Group Vice President Corporate Affairs
Tel: +61 3 8695 4617
Mobile: +61 409 705 176