Growing opposition from shareholders to a de-merger has forced Incitec Pivot (IPL) to delay the idea and look to asset sales as it reported a surge in revenue, earnings and a higher dividend.
Incitec Pivot will investigate a sale of its troubled Waggaman ammonia plant in the southern United States before pushing ahead with a plan to split into two companies, under a pivot that could delay the proposed split by up to a year.
The changes in strategy were announced on Tuesday as Incitec reported a 45% rise in full-year revenue, a 580% rise in underlying earnings to $1.01 billion and a tripling in dividends.
The news saw the shares end at $3.96, up 5.8% for the day, after they jumped 10% at the start on the news that IPL had received offers for the US ammonia operation.
IPL however, warned the sale option for the facility in Waggaman, Louisiana (WALA) could delay its plans to demerge its explosives manufacturing business, Dyno Nobel, by up to a year.
The WALA facility is a part of Dyno Nobel Americas, and is “a very valuable asset and an attractive investment opportunity for high-quality counterparties”, drawing investor interest, the company said.
“For this reason, we have decided to re-sequence our strategic priorities to assess the opportunity with WALA in the short-term, while we continue to progress our demerger plans,” Chairman Brian Kruger said in Tuesday’s statement.
Incitec had announced in May that it would separately list the explosives maker Dyno Nobel, which it acquired in 2008 with the aim of speeding up growth in the explosives and fertiliser businesses.
The company said the previously announced target of completing the separation in early 2023 will likely be extended by six to 12 months, pending strategic review for the Waggaman plant.
IPL also said its annual adjusted net profit after tax came in at $1.03 billion for the year to September, nearly tripling from $359 million reported a year ago.
It also announced a final dividend of 17 Australian cents a share, taking the total for the year to 27 cents, almost triple the 9.3 cents a share paid for 2020-21.
IPL also said it would conduct a buy-back of up to $400 million over the next year.
