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Good news from Moranbah companies Incitec Pivot
My view is that this company has gone beyond their plans for Moranbah and continues to grow.
They have a great reputation in the town and people like saying my job is to make stuff to blow stuff up.
But on a serious note.
Dyno Nobel's Moranbah operation looks to far exceeded overseas profit in the comparison margin. The risk is down since demand is giving investors a great profit in Moranbah.
They also say they are keen to develop the explosive arm and sell to China , but also locally.
They will expand and will put on new jobs.
With Caval Ridge going towards construction now they will need a lot of explosives just to get started,
so the future is bright for this company.
Good news from Moranbah companies Incitec Pivot - Dyna Nobel
The company's net profit of $510.7 million for the 12 months to September 30 was up from $463.2 million in the prior fiscal year.
The bottom line was boosted by one-off items, which delivered a $106 million benefit in fiscal 2012, and a $67 million cost in fiscal 2011.
Net profit excluding one-off items was $404.7 million in fiscal 2012, down 24 per cent on the prior year's profit of $530.1 million.
Earnings before interest and tax (EBIT) in the fertiliser business fell 40 per cent to $270.9 million, but earnings from explosives rose eight per cent to $399.9 million.
Mr Fazzino said explosives currently accounted for 60 per cent of Incitec's business and generated more stable and predictable returns.
Incitec expected demand for explosives from the mining sector in Australia to pick up.
"If you look over a longer period, we're not of the view that the boom is over in Australia," Mr Fazzino said.
"Clearly, Australia is very competitive still, and as our mining customers get productivity moving again, we'd expect to see the industry revert to long-term growth rates, but there'll be a pause there."
Mr Fazzino said that in the United States, the worst of the decline in demand for explosives from the coal sector had probably passed.
The explosives business in the US was expected to generate moderate earnings growth through the sale of higher volumes to the mining and metals sector, and the quarry and construction sector.
'The $17 million cost of the feasibility study will be expensed in the 2012 financial year."
Yet at the same time its Moranbah facility continues to grow, producing its first ammonium nitrate in July and commencing ammonia production in house in September.
The site is now on track to produce around 250 000 tonnes of ammonium nitrate in its 2012/13 financial year, rising to 330 000 tonnes of ammonium nitrate the following financial year.
Incitec Pivot managing director James Fazzino says the company is lobbying the government to keep coal seam gas prices low, to keep its costs down.
"Gas is a major input into fertiliser manufacturing, particularly with our Gibson Island Plant, which ends up being fairly marginal at high gas prices," he said.
"This is a crazy result that we're ending up with.
"The result of the gas boom on the east coast of Australia is going to mean that gas consumers, industry, mining and domestic households are going to be asked to pay the world's highest prices (which is Asian oil-linked LNG prices) for our own gas."
The annual results out today coincide with a blowout of the boiler at its sulphuric acid plant in Mt Isa, causing a $25 million shutdown and loss of production for the next month.
The acid plant supplies the phosphate plant at Phosphate Hill. Mt Isa.
It will be offline for the next month while repairs take place.
The breakdown was caused by a boiler failure and will mean substantial operational losses and repair costs.
Xstrata's Copper smelter relies on the plant to capture sulphur emissions produced during copper refining, and it's unknown how the closure of the acid plant will impact Xstrata's copper operations.
Mr Fazzino says the breakdown will reduce the plant's annual output by 50,000 tonnes.
"There will be a $25 million impact in terms of repair costs, the cost of supplying Phosphate Hill with purchased acid and also under-absorption of fixed costs," he said.
"Obviously it's disappointing and not where we want to be."
Incitec Pivot is replacing the boiler rather than repairing it and Mr Fazzino says existing employees will be working throughout the recovery process.