Fertiliser firm, Incitec Pivot (IPL) posted an impressive full-year result on Wednesday – propelling its shares to an all-time high of $94.76, but the company remained tight-lipped about its stake in Dyno and speculation about further acquisition opportunities.
Shares soared by as much as $7.8 to $94.76 after the company posted a 145% increase in its full-year profit.
Net profit after tax excluding individually material items was $202.5 million for the year ended 30 September 2007, up from $82.80 million the previous financial year.
However, managing director Julian Segal said difficult trading conditions are anticipated for domestic sales.
Incitec said the positive gains were due to a full year contribution from its Southern Cross Fertilisers acquisition and strong global fertiliser prices.
IPL’s performance came despite a 15% downturn in domestic sales volumes resulting from continued drought conditions.
However, total sales volume increased 16.5% to 3.17 million tonnes through increased traded tonnages, including exports, and a lift in industrial sales.
"The results underscores the value derived from the business strategy IPL has embraced, including the SCF acquisition," managing director Julian Segal said.
IPL’s earnings per share (EPS) excluding individually material items increased 175% to $4.02 in 2007.
Segal said the result also reflected a strong company culture built around personal responsibility, responsiveness to community issues and constantly looking to improve individual and corporate performance.
The record date for final dividends is 27 November 2007 and the payment date is 13 December 2007.
The company purchased 13.2% stake in explosives maker, Dyno Nobel Ltd in August for $257 million.
This has fuelled market speculation about further opportunities.
"We will be waiting for the company’s (Dyno’s) guidance on the cost of the Moranbah project," Segal said.
The Moranbah project is an ammonium nitrate plant located in Queensland whose revised construction costs exceeded initial estimates.
Incitec Pivot is a relatively new company, created by the merger of two of the powerhouses of the Australian fertiliser industry in June 2003. Its scale and production capacity was greatly increased in August 2006 with the purchase of Southern Cross Fertilisers, Australia’s only manufacturers of MAP and DAP fertilisers.
Shares in Incitec traded in a range between 92.23 – 94.76 during intra-day trading, closing at $91.65.
