Incitec Pivot has announced that its explosives business has outperformed expectations, while its fertilizers business has fallen below projections. Despite these variations, the company states that its overall financial performance remains in line with the outlook provided in May.
Explosives Business Shows Strong Margins
According to Incitec Pivot, the explosives business of Dyno Nobel Americas has achieved favorable margins in the second half of the year, thanks to a focus on price and cost discipline. This positive performance has helped to offset the challenges faced by the fertilizers business.
Fertilizers Business Struggles in a Challenging Market
On the other hand, the margins in the fertilizers business continue to be depressed due to the sale of products in a declining market and farmers switching to lower margin alternatives. As a result, the company expects earnings in its fertilizers distribution business to be at the lower end of the usual range, ranging from 40 million Australian dollars ($26 million) to A$60 million.
Phosphate Hill Plant Output Guidance Revised
Due to ongoing maintenance work, Incitec Pivot has downgraded its full-year output guidance for the Phosphate Hill plant. The revised estimate now stands at 870,000-880,000 metric tons, compared to the previous range of 900,000-930,000 tons. The impact of this adjustment on fiscal 2023 earnings before interest and taxes is expected to be around A$13 million-A$15 million.
Pursuit of Fertilizers Business Sale Continues
Incitec Pivot is actively pursuing a potential sale of its fertilizers business. As part of this effort, the company has disclosed that the planned sale of its Waggaman facility to CF Industries is still contingent on approval from the U.S. antitrust regulator.