Dyno Nobel shares rise on sale of fertiliser distribution arm
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More news: Shares in Dyno Nobel have gained in early trading after the company announced that it would sell its fertiliser distribution arm to Ridley Corporation for $375 million.
Its shares were up 1.95% to $2.62 by 10:24am AEST.
The company also posted a statutory NPAT of $7 million for the first half of the financial year, up from a loss of $148 million during the prior corresponding period.
Dyno Nobel offloads fertiliser distribution arm to Ridley Corporation for $375m
The news: Dyno Nobel, formerly known as Incitec Pivot, has announced it will sell its fertiliser distribution arm to Ridley Corporation and that it has swung to a first-half net profit.
The numbers: The company has been looking to separate its fertiliser arm from its core explosives business since July 2024 and has made three sale agreements of up to $835 million so far to divest the business.
These include:
- The fertiliser distribution sale to Ridley that will see gross proceeds for $375 million plus an additional $121 million of working capital release;
- The sale of an offtake agreement with Perdaman Chemicals and Fertilisers to Macquarie Group’s Commodities and Global Markets for gross proceeds of $145 million; and
- A conditional contract of sale for Gibson Island land to a subsidiary of an ASX-listed property developer for gross proceeds of $194 million
Dyno is also in the middle of a strategic review of Phosphate Hill and said it would make a decision by September 2025.
The company also posted a statutory NPAT of $7 million for the first half of the financial year, up from a loss of $148 million during the prior corresponding period.
However, its EBITDA for the period excluding individually material items was at $323 million, down from $425 million. The biggest EBIT loss came from its Americas business which recorded an EBIT of $84 million, down from $148 million. The earnings reduction was largely due to sales of the Waggaman facility and land at Cheyenne, Wyoming, and the impact of the Louisiana and Missouri turnaround.
What they said: Dyno Nobel chief executive and managing director Mauro Neves said: “Ridley is a major agribusiness in Australia with an extensive and complementary footprint. This is the start of an exciting new chapter for Incitec Pivot Fertilisers and its valued customers and employees.
“Our transformation program remains on track to achieve the 40-50% EBIT exit run rate expected for FY25, in line with our ambition to double earnings and deliver ROIC above WACC9.
Despite weather related challenges experienced during the half, the net transformation earnings benefit of $25m builds on the strong FY24 result delivered by the program, and we continue to expect further upside as we move through FY25”.
The source: ASX
