Shares in fertiliser and explosives group, Incitec Pivot fell more than 8% yesterday after the company revealed a $45 million hit to full 2018-19 profit from surprise operational problems at its plants in both Australia and the US.
The shares ended down nearly 8% at $3.28 after news of the hit to earnings was released before trading started after the holiday weekend.
IPL said that what it called “unplanned outages at its Louisiana and Phosphate Hill plants” are expected to cut earnings before interest and tax (EBIT) by “approximately A$45m” for the financial year ending September 30, 2019.
“The Louisiana ammonia plant has been impacted by downtime caused by issues in the plant’s CO2 removal system.
“Following an inspection of the equipment, repair work has commenced. The repair work is expected to fully resolve the issues.
“The outage is expected to result in a reduction in production for FY19 of approximately 80,000 tonnes. The EBIT impact of the outage (including repair costs) is estimated to be approximately A$25m,“ the company told the ASX.
Australia, IPL says the Phosphate Hill facility in Queensland has been affected by a leak in its phosphoric acid plant.
“The facility has resumed operation. The estimated impact of the outage is a reduction of approximately 50,000 tonnes of ammonium phosphates for the financial year ending 30 September 2019 and the revised production target for FY19 is 950,000 tonnes.
“The EBIT impact is estimated to be approximately A$20m,” directors estimated.
New guidance estimates for the year and the half year to March 31 were not provided in yesterday’s release.
IPL reported an EBIT after one-off items of $556 million and $711 million before one-off items of $139 million for the 2017-18 financial year.
