Incitec Pivot Limited (ASX: IPL) is a leading Australian multinational corporation specialising in the manufacture of fertilisers, explosives, and chemicals. The company supports the resources and agricultural sectors with innovative technology solutions aimed at sustainability. Incitec operates two primary business units including Dyno Nobel and Incitec Pivot Fertilisers.
Incitec is investing in several cutting-edge innovations to enhance safety, efficiency, and sustainability. Notably, the company is advancing its CyberDet I and CyberDet II wireless detonator technologies, which improve safety and operational efficiency in blasting operations.
The company is also focusing on sustainable practices, such as reducing carbon emissions and developing environmentally friendly fertilisers. These innovations are part of the company’s broader strategy to leverage technology for creating a sustainable and decarbonised world.
Change of Segment Reporting and Business Update Announcement
On the 28th of March 2025, Incitec Pivot Limited announced significant changes to its segment reporting structure ahead of the release of its 2025 Half Year Results on 12 May 2025. Incitec outlined their new DNEL business segment and also provided updates on its first half performance for its explosives and fertilisers businesses.
New DNEL Business Unit
Incitec Pivot has introduced a new business unit, Dyno Nobel EMEA & LATAM (DNEL), reflecting its strategy to expand in Latin America, Europe, and Africa. This new segment will leverage Dyno Nobel’s globally recognised brand, unique technology, and strong customer relationships. The DNEL segment will include operations such as Titanobel in France, Nitromak in Turkey, and various businesses across Latin America and South Africa.
Titanobel is a leading industrial explosives manufacturer based in France, known for its innovative products and services in the explosives industry. Nitromak, based in Turkey, supplies a wide range of explosives products and services, catering to the mining and construction sectors.
The Latin American businesses will focus on growth across the region using traded ammonium nitrate and flexible assets, while the South African joint ventures include DetNet, which specialises in electronic detonators, and Sasol, which provides enviro blasting services. These operations were previously reported under different segments but will now be consolidated under DNEL. The financial results from 2020 to 2024 have been restated to reflect this new structure.
Dyno Nobel Business Update
Dyno Nobel, a global leader in the commercial explosives industry, has a rich history connected to significant breakthroughs in explosives technology. With over 3,770 employees and 32 manufacturing facilities across three continents, Dyno Nobel manufactures over 54 million pounds of packaged explosives and more than 1.2 million tons of ammonium nitrate capacity. The business has been performing robustly, with recent milestones including the successful completion of the scheduled turnaround at the Moranbah plant in Queensland.
However, significant rainfall in Queensland during the first half of FY25 impacted volumes for the Dyno Nobel Asia Pacific business. Despite these challenges, the company expects to recover these volumes in the second half of the year, with an anticipated earnings split of approximately 35% in the first half and 65% in the second half.
Fertilisers Business Update
Incitec Pivot’s fertilisers business is a key player in the agricultural sector, providing essential nutrients to support crop growth and soil health. The business includes the manufacturing and distribution of a wide range of fertilisers, including nitrogen, phosphate, and potassium-based products.
Persistent dry conditions across South Australia, Victoria, and southern NSW, along with cyclonic conditions in Queensland and northern NSW, have caused delays in fertiliser dispatches. This has resulted in the deferral of sales volumes from the first half of FY25 to the second half. Previously announced sulphuric acid supply interruptions to the Phosphate Hill plant have further impacted the business. The earnings split for the fertilisers business is expected to be around 10% in the first half and 90% in the second half, similar to the previous year.
Financial Performance
For the year ended 30 September 2024, Incitec Pivot Limited reported a revenue from external customers of A$5,364.9 million. This includes contributions from various segments: Dyno Nobel Asia Pacific (DNAP) with A$1,240.1 million, Dyno Nobel Americas (DNA) with A$1,715.4 million, Dyno Nobel EMEA & LATAM (DNEL) with A$288.6 million, and Fertilisers with A$3,194.1 million. The eliminations and adjustments resulted in a net revenue of A$5,278.5 million from continuing operations and A$86.4 million from discontinued operations.
Their restated revenue is up from the originally reported A$5,278.50, although still down from 2023’s A$5,403.5, although their annual revenue increased over six years, is has been declining over three years.
The company achieved an EBITDA of A$924.8 million and an EBIT of A$579.8 million for the consolidated group with DNA being the top EBITDA contributor at A$344.8 million and DNAP contributing the most to EBIT at A$236.1 million. Segment assets totalled A$8,391.7 million, while segment liabilities amounted to A$3,445.1 million, resulting in net assets of A$4,844.9 million.
Their EBITDA was restated up from $A692.9 million and EBIT up from $A347.9 million. The company’s EBITDA has declined over six years, improving up to FY22 then sharply falling during FY23 and FY24. EBIT has also decreased over six years and followed the same trend as EBITDA.
These financial results reflect the company’s struggling financial performance across its diverse business segments, facing challenges such as weather conditions and supply chain disruptions. The introduction of the DNEL business unit is expected to streamline operations and enhance financial performance by consolidating various international operations under a single segment.
Basic Materials Sector (XMJ)
The Materials Sector has experienced a notable decline of 7.87% over the past year. This drop can be attributed to fluctuations in commodity prices, supply chain disruptions, and changes in global demand. Despite this recent downturn, the sector has shown resilience and growth over a longer period, with an overall increase over the past five years.
Rising commodity prices over the past five years have positively impacted the revenues and profitability of companies within the sector. Technological advancements in mining and materials processing have improved efficiency and reduced costs, contributing to better financial performance. Increased demand for raw materials, driven by industrialisation and infrastructure development in emerging markets, has also supported the sector’s growth.
Strategic investments in expanding operations and acquiring new assets have bolstered market positions and growth prospects for these companies.
Overall, while the Basic Materials Sector has faced challenges in the short term, its long-term growth trajectory remains positive, supported by strong fundamentals and strategic initiatives.
Incitec is positioned in a challenging and competitive sector that demands innovation, asset acquisition and consistent revenue growth as commodity prices rise.
