Incitec Pivot posts full-year loss

INCITEC Pivot reported a full-year loss as the fertiliser and explosives maker wrote down goodwill from its Dyno Nobel business, bought in the prior fiscal year. The company recorded a loss of $179.9 million for the 12 months to September 30 compared with a profit of $604.6 million in the prior corresponding period, Melbourne-based Incitec said in a statement today.

Net profit excluding material items slumped 46 per cent to $347.8 million, as earnings from its fertiliser business fell because of challenging conditions in Australia.

Revenue rose 17 per cent to $3.42 billion as Incitec benefitted from the first full-year contribution from explosives maker Dyno Nobel.

Incitec said that Australian conditions in segments of the fertiliser distributions business were likely to remain challenging.

Business conditions as a whole were expected to be soft in the first half of fiscal 2010 because of the high Australian dollar and ongoing weakness in global fertiliser demand and seasonal conditions in North America.

In the longer term, Incitec said industry fundamentals remained intact for both explosives and fertilisers. Explosives would continue to be in demand with Australian mining growth.

The company said it would also benefit from its Velocity program, with $US60 million ($65.05 million) of savings targeted for fiscal 2010.

"We experienced unprecedented global volatility in our businesses in 2009 and the actions that we have taken, through the Velocity business efficiency program, customer relationships and continued financial discipline, will enable us to manage the continued challenges of the external environment in 2010," chief executive James Fazzino said in the statement.

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