Incitec Pivot has slashed its dividend after the chemicals and fertiliser manufacturer’s first-half profit tumbled by more than two thirds following the north Queensland floods.
Profit for the six months to March 31 dropped 72 per cent to $42 million once prior corresponding period impairments were stripped out, as Incitec Pivot took a $60 million earnings hit from lost sales margin on product not made as a result of the rail line closure between Townsville and Phosphate Hill.
There was a $16 million impact from increased costs related to a gas supply disruption, while the impact of drought conditions on fertilisers sales volumes and mix weighed by about $21 million.
There will be another $55 million hit from the rail closure to be registered in what Incitec Pivot, which cut its dividend from 4.5 to 1.3 cents, said on Monday should be an improved second half.
“While the first half result was impacted by some significant non-recurring events, we are making good progress with our strategic agenda,” managing director and chief executive Jeanne Johns said.
“The underlying market fundamentals remain strong and we have an improved outlook for the second half and beyond.”
INCITEC PIVOT’S FIRST-HALF PROFIT
* Net profit $41.9m v $7.6m in pcp
* Revenue up 3.5pct to $59.1m
* Interim dividend down 3.2 cents to 1.3 cents, unfranked