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.

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 als the Geelong manufacturing facility, targeted by the end of 2025, and to 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.

You can find a link to the ASX release here.