By Rhiannon Hoyle

Incitec Pivot on Monday reported an annual loss mostly because of write-downs of its fertilizers businesses, but flagged a strong outlook for the year ahead reflecting a sharpened focus on sales prices and business costs.

The Australia-listed explosives and chemicals company said it made a net loss of 310.9 million Australian dollars (US$204.7 million) in the 12 months through September, weighed by A$712 million in one-off items that include the fertilizers writedowns and business transformation costs. It made a net profit of A$560.0 million a year ago.

Still, the company said profit from continuing operations before material items was 24% higher year over year, at A$357.8 million.

Directors declared a final dividend of 6.3 Australian cents per share, up from 5.0 Australian cents a year ago. That represents a 50% payout of annual profits before those write-downs and other one-off costs, the company said.

Incitec Pivot said it posted growth in all customer-facing businesses, with record earnings before interest and taxes, or Ebit, notched by both the Dyno Nobel Asia Pacific business and the Fertilisers Distribution business.

"The outlook for FY25 is expected to be strong, supported by transformation activities focusing on areas such as price discipline and cost management, recontracting benefits and improved margins from technology," the company said.

It said it is committed to completing an ongoing A$900 million on-market share buyback. The company bought A$149 million worth of shares in fiscal 2024.

It also plans to separate its fertilizers operations in the next six to 12 months, "with a potential divestment in parts to maximize value and increase execution certainty," said Chief Executive Mauro Neves.

The company in July ended talks to sell the Incitec Pivot Fertilisers business to Indonesia's PT Pupuk Kalimantan Timur, raising concerns about how long it could take a deal to complete. Instead, it proposed a structural split of its fertilizers and Dyno Nobel explosives arms.

The separation will give the different businesses greater strategic focus, and reduce Dyno Nobel's earnings volatility and capital intensity, Incitec Pivot said.

It is planning sales processes for its Distribution business and Gibson Island real estate assets, to begin in early 2025.

The company has also decided to stop manufacturing single super phosphate fertilizer at its Geelong manufacturing plant by the end of 2025, said Neves.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

November 10, 2024 17:30 ET (22:30 GMT)

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