Incitec Pivot to close phosphate site

INCITEC Pivot is closing a Victorian phosphate factory at a cost of $13 million and has flagged another $20 million earnings hit, this time from the dry weather across the eastern states.

The chemicals and fertiliser manufacturer said yesterday it would close its Portland facility next month and consolidate operations into its Geelong site, almost 300km away.

The $13 million cost will be counted in full-year results, which include a $20 million hit to earnings from low sales due to dry weather across pasture, summer and winter cropping regions during the first half.

“Distribution sales in the first half of FY19 are currently down approximately 200,000 tonnes versus the prior corresponding period, and it seems unlikely at this stage that there will be any substantial recovery of those lost volumes in the second half,” the company said in a statement to the ASX.

The full-year results due on May 20 will also show the approximately $100 million impact of the rail outage caused by February’s Queensland floods.

Incitec Pivot said efficiencies from amalgamating operations from Portland and Geelong will add $3 million to EBIT per annum from the next financial year, and save about $1 million in capital annually.