Incitec Pivot Ltd shares declined as much as 5.6% to A$2.53—marking their lowest point since July 2022—after the company flagged a delay in fertiliser sales due to adverse weather conditions. Prolonged dry weather across South Australia, Victoria and southern New South Wales, combined with cyclonic activity in Queensland and northern New South Wales, has led many farmers to postpone fertiliser purchases, particularly for winter cropping.
The company also cited ongoing sulphuric acid supply disruptions affecting its Phosphate Hill operations as a compounding factor. As a result, Incitec Pivot anticipates a significant skew in Fertilizer segment earnings toward the second half of the 2025 financial year, with around 90% of those earnings now expected in that period.
Although no formal revision to FY25 earnings guidance was issued, market sentiment remains cautious. Shares last traded down 3.4% at A$2.59, with technical support from the 2023 low at A$2.58 appearing to hold for now.
FY25 earnings risk
RBC Capital Markets analyst Owen Birrell noted that weather-induced sales deferrals have heightened FY25 earnings risk. “The implied downgrade to first-half earnings and the increased execution risk in the second half are key concerns,” he said.
Birrell highlighted that the updated first-half/second-half earnings split for Dyno Nobel suggests a 13% downgrade to first-half consensus EBIT, requiring an 8% uplift in the second half to reach the prior full-year estimate of A$490 million. For the Fertilizers business, the shift implies a 50% reduction in first-half EBIT expectations, necessitating a 13% recovery in the second half to meet the earlier forecast of A$118 million.
While heavy rainfall has disrupted Queensland coal mining activity, Birrell remains cautiously optimistic that a rebound in the second half could support recovery. However, limited visibility on operational improvements at Phosphate Hill warrants a prudent outlook.