Incitec flags weather hit on earnings, shares tumble

The news: Incitec Pivot has flagged lower first-half sales in both its fertilisers and explosives businesses due to weather conditions, sending its shares lower in early trading.

The numbers: Incitec said significant rainfall in Queensland had impacted first-half volumes for its Dyno Nobel explosives business. It expects to recoup these in the second half, but this will result in an earnings split of 35% in H1 and 65% in H2.

Separately, persistent dry conditions in the southern states, along with the recent cyclonic conditions in Queensland and northern NSW, had caused farmers to delay fertiliser dispatches, it said. Combined with supply disruptions at its Phosphate hill site, this would result in an earnings split of 10% in the first half and 90% in the second for the fertiliser business.

Incitec shares were down nearly 5% to $2.55 each after the news.

The context: The update comes a month after Incitec reaffirmed its full-year outlook despite trimming production guidance at its Phosphate Hill plant in north-west Queensland. The company reported a full-year loss in November after heavy write-downs in its US and Australian fertiliser businesses and lower earnings following the sale of its US ammonia facility.