Fer­tiliser the growth fac­tor as Incitec’s profit jumps

Townsville Bulletin - - NEWS - CHRIS­TIAN ED­WARDS

INCITEC Pivot has more than dou­bled full- year profit courtesy of ris­ing fer­tiliser prices and launched a $ 300 mil­lion buy­back, but the fu­ture of the com­pany’s Gib­son Is­land plant in Queens­land re­mains un­der a cloud as it strug­gles to se­cure new gas sup­ply.

Incitec has re­ported net profit of $ 318.7 mil­lion, a rise of $ 190.6 mil­lion on the pre­vi­ous year, sup­ported by a re­bound in com­mod­ity and fer­tiliser prices, par­tic­u­larly ni­tro­gen and am­mo­nia.

How­ever, in­com­ing chief ex­ec­u­tive Jeanne Johns, who takes over from long- term boss James Fazz­ino today, will face the ur­gent mat­ter of se­cur­ing a new gas con­tract for the Gib­son Is­land fer­tiliser plant or shut­ting the plant down. Incitec recorded a $ 167 mil­lion write­down on the 48- year- old Gib­son Is­land fa­cil­ity in 2016, due largely to the spi­ralling do­mes­tic gas costs.

The com­pany’s chief op­er­at­ing of­fi­cer, Frank Mi­callef, said on Tues­day it was time to make a de­ci­sion on the plant and its 450 work­ers.

“The cur­rent gas is con­tracted to 30 Septem­ber next year, clearly we want some clar­ity be­fore that,” Mr Mi­callef said at the com­pany’s full- year re­sults pre­sen­ta­tion.

“But if we are un­able to se­cure gas on eco­nom­i­cally favourable terms, then man­u­fac­tur­ing at Gib­son Is­land is likely to cease.”

Mr Mi­callef said 2017 earn­ings at­trib­ut­able to Gib­son Is­land were around $ 45 mil­lion.

Clos­ing the plant will cost Incitec about $ 50 mil­lion.

Mr Mi­callef said the value of Gib­son Is­land land would be be­tween $ 40 to $ 55 mil­lion net but that the re­al­i­sa­tion of any sur­plus of land would come af­ter clo­sure costs.

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