IPL Confirms Guidance

  Shares in chemicals and explosives maker Incitec Pivot rose yesterday after the company revealed lower earnings before one-off items & #160;and indicated it will see higher profits in the second (current) half of the year.The shares rose more than 4%, or 13c to & #36;3.17 after IPL said & #160;reported net profit for the six months to March 31 of & #36;132.4 million, up from & #36;99.6 million in the corresponding period in fiscal 2009.That included one off items: excluding them profit fell 14% & #160;to & #36;146.2 million from just over & #36;169 million reported earlier. & quot;Earnings will be biased towards the second half, reflecting the seasonality of Australian agriculture and the North American explosives market, & quot; the company said in the & #160;statement to the ASX. & quot;Americas Explosives Business will continue to face challenging cyclical trading conditions, partly offset by delivery of the Velocity (IPL's cost cutting) program. & quot;The business is well placed to benefit from the eventual recovery in the US economy, although the timing of any recovery is uncertain. & quot;Earnings before interest and tax (EBIT) fell 15% to & #160; & #36;230.1 million on the previous corresponding period.That & #160;reflected lower global fertiliser prices and the impact of the higher Australian dollar, offset by business improvement initiatives from the Velocity program.Directors said: & quot;the & #160;mix of earnings in the period was 58% Explosives and 42% Fertilisers which compares with 47 % Explosives and 53% Fertilisers in the same period last year. & quot;The company's Explosives division saw earnings before interest and tax (EBIT) rise 3% to & #36;133.2 million, thanks to higher margins in the stronger growing & #160;Asia Pacific region (such as Australia); offset by the impact of those still challenging market conditions in North America. & #160;The high value of the Aussie dollar also had an impact.The Fertilisers EBIT of & #36;96.9 million dropped 32% from the & #160; & #36;143.3 million earned in the same half of last financial year, thanks & #160;to lower average global fertiliser prices and the higher Australian dollar.IPL said its & #160;trading business, Southern Cross International, maintained volumes & quot;but was affected by the global period-on-period drop in the fertiliser price and high Australian dollar which saw sales revenue fall by 30% or & #36;120.1 million. & quot;Looking to the coming year, IPL directors said & #160;there would be continued earnings momentum in the Asia Pacific explosives business, with lower cost sourcing.Domestic fertiliser demand will be dependent on sufficient in-season rainfall, with the & #160;higher Australian dollar impacting farmers.The interim dividend was cut to & #160;1.8c a share from 2.1c in the first half of 2009.  

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