Dry east coast conditions have hampered Incitec Pivot’s first-half profit, which has fallen 95 per cent to $7.6 million following a previously flagged gas related write down at its explosives services business.
The company reported a 9.6 per cent lift in revenue for the six months to March 31, but its bottom line fell sharply due to the non-cash goodwill impairment of $236 million against its Dyno Nobel Asia Pacific industrial explosives and blasting services business.
In April, Incitec indicated it would cut the value of its Dyno Nobel Asia Pacific business from $1.145 billion to $908.5 million, partly because of the impact of rising gas prices on the east coast.
Earnings before interest and tax from Incitec’s Fertilisers Asia Pacific business fell 11.7 per cent following delayed sales of ammonium phosphates for winter crops, in the wake of arid conditions across eastern Australia.
In March, agribusiness specialist Rabobank said the La Nina climate pattern that usually brings wet weather to the east coast has been particularly weak this year.
In a statement on Wednesday, Incitec said its fertiliser business was also hit by a higher Australian-US dollar exchange rate, partially, which was offset by higher global fertiliser prices.
At 1047 AEST shares in Incitec had fallen 18.5 cents, or 4.9 per cent to $3.565.