Incitec Pivot (ASX: IPL) continues to perform well from demand for fertiliser, with the company today reporting a NPAT up 22% to $178.6 million, excluding individually material items.
Fertiliser earnings before interest and tax (EBIT) improved 30%, or $31.7 million to $138.6 million, which the company said was largely as a result of stronger global ammonium phosphate and urea prices, partly offset by volume contraction as a result of the flooding that impacted large areas of eastern Australia.
The explosives division EBIT was A$146.9 million in the first half, up 12%, driven primarily by growth in Americas EBIT to A$67.1 million, up 20%, mainly reflecting volume recovery and the impact of the Velocity business efficiency program.
The company also remains on track to complete the 330,000 tonnes per annum ammonium nitrate plant in Moranbah, Queensland, within the expected budget of A$935 million after a delay in construction pushed the completion date to the June quarter of 2012.
IPL Managing Director & CEO, James Fazzino, said: “The result confirms the strength of the business model and the value of the strategic alignment to the industrialisation of Asia. It has been delivered by our people focusing on executing on the basics: customers, financial discipline and efficiency.
“Three of the four business units achieved improved Earnings Before Interest and Tax (EBIT) resulting in a 19% EBIT increase over the 2010 Half Year. This was achieved despite the impacts of severe weather disruptions to Dyno Nobel Asia Pacific and fertiliser distribution.”
The company also plans to develop a 100,000 tonne per annum AN emulsion plant at Port Hedland within the Pilbara in Western Australia with expected cost of A$40 million and a targeted completion for the end of the last quarter in 2012.
The weather, including Cyclone Yasi, has hampered activity on site as well as causing delays to material deliveries with major transport interruptions.