$ 140m write- off hits Incitec profit

INCITEC Pivot has suffered a deep fall in its full- year profit after the fertiliser maker wrote almost $ 140 million off the value of a key business.

The company yesterday reported a net profit of $ 207.9 million for the year to September – down about 35 per cent from the previous year.

It came after the group cut $ 139.5 million off the value of goodwill it ascribes to its Dyno Nobel Asia Pacific industrial explosives and blasting services business.

The previous year, Incitec Pivot’s net profit had clocked in at $ 318.7 million.

That made it the worst performing company in the ASX 100 index, which broadly tracks the 100 biggest compan- ies listed on the Australian Securities Exchange.

Incitec Pivot, which declared a partly franked final dividend of 6.2c a share, did not provide a profit forecast for this financial year.

It said dry conditions in New South Wales and Queensland could hit irrigation water availability in key summer crop markets.

The company said the impact of drought across much of the east coast – that dampened nitrogen demand for winter crops – was somewhat mitigated by higher global urea prices, higher sales volumes in other regions and higher distribution profit margins.

Improved supply chain management had also helped, the group said. Revenue jumped 11 per cent to $ 3.86 billion.

Managing director Jeanne Johns said operating performance had improved across the company’s portfolio, including the explosives businesses in the US and Australia.

“Our fertilisers business in Australia also had a strong result, considering the large turnaround at Phosphate Hill and the drought conditions experienced in much of New South Wales and southern Queensland,” Ms Johns said in a statement.

Incitec Pivot had made “excellent progress on our strategic agenda,” she said.

“There’s more upside from leveraging our superior technology in the US.”