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Incitec result a tale of contrasting sectors
Incitec result a tale of contrasting sectors

UPDATE 1.50pm: Shares in fertiliser and explosives maker Incitec Pivot have gained nearly 4 per cent after it lifted its annual profit by 10 per cent and increased dividends.

However the share price rise only just managed to offset the previous day's sharp fall caused by the shutdown of an ammonium plant.

Incitec Pivot's net profit in the 12 months to September 30 of $510.7 million was up from $463.2 million in the previous year.

The profit growth was primarily due to one-off items, which delivered a $106 million benefit in fiscal 2012, and a $67 million cost in fiscal 2011.

Incitec Pivot also declared a 75 per cent franked final dividend of 9.1 cents per share, up from 8.2 cents at the same time last year.

Its shares closed up 11 cents, or 3.78 per cent, at $3.02.

Incitec Pivot shares lost 5.2 per cent in value yesterday after the company said a temporary shutdown of a plant in Mt Isa, Queensland could cost up to $25 million.

The company' underlying performance was hampered by a drop in earnings from its fertilisers business.

Net profit excluding one-off items in the year to September of $404.7 million was down 24 per cent from the previous year's $530.1 million.

Earnings in fertilisers fell by 40 per cent from the previous corresponding period, because of a fall in commodity prices and the strong Australian dollar, Incitec Pivot said.

It expects distribution margins in the fertilisers business to recover to average levels in the year ahead, but the plant closure in Queensland will lower ammonium production.

Earnings from explosives were up eight per cent from the previous year.

Chief executive James Fazzino said 60 per cent of the company's earnings came from its explosives business, reflecting a strategic emphasis on that sector.