Incitec Pivot Ltd (IPL) nudged up its interim dividend for the six months to March 31 – although it wasn’t much of a nudge, more barely a slight tap.
The interim div was lifted to 3.5c a share from 3.4c after the company reported a 7% in after tax profit to $115.7 million.
That was despite lower global fertiliser prices (which some offshore reports suggest could be starting to turn) and weakness in the US coal sector where the company sells explosives.
Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) rose by 20% or $50 million to $302.6 million, primarily driven by cashflow from the Moranbah ammonium nitrate plant and management action on costs and productivity in an external environment "which continues to be challenging,” the company said in yesterday’s statement.
The fertiliser and mining explosives group reported a 14% increase in earnings before interest and tax to $193.1 million for the six months ended March 31.
The company said the result was partly driven by increase cashflow from the Moranbah ammonium nitrate plant in central Queensland, lower costs and greater productivity.
IPL 1Y – Incitec has OK first half – dividend up
Chief executive James Fazzino said the result confirmed the strength of the company’s strategic focus to tap into the urbanisation of China and the shale gas revolution in the US.
He said the group’s business excellence program delivered $13 million in benefits during the half, taking total benefits from the program to $52 million since it began three years ago.
"We are focused on optimising the performance of Incitec Pivot’s existing manufacturing assets, lifting productivity and concentrating on costs," Mr Fazzino said in a statement.
Drought conditions in northern Australia also frustrated the domestic distribution business, but Mr Fazzino said the company still managed to increase the volumes sold.
IPL’s Overseas fertiliser marketing division Southern Cross International enjoyed a trebling in earnings before interest and tax of $12.7m million to $37.9m, underpinned by a lower average dollar
The company’s traditional fertiliser business recorded a marginal 2% lift to $49.8 million in earnings before interest and tax (EBIT).
Incitec Pivot shares rose 1% to $2.85.
