Incitec Pivot lifts interim profit

Explosives and fertiliser maker Incitec Pivot  has surprised the market with a 7% increase in first-half net profit, defying analyst expectations of an estimated 20% decline.

In the six months to March 31, Incitec posted a net profit of $115.7 million, up from $107.9m in the previous corresponding period and well above market estimates of $86.3m.

The divergence in the result from analyst expectations is partly explained by the fact that Incitec does not provide profit guidance, due to the variability of global fertiliser prices and foreign exchange movements

The group said the result was partly driven by increase cashflow from the Moranbah ammonium nitrate plant in central Queensland, lower costs and greater productivity.

Revenue in the period was $1.508 billion, a 6% lift on the $1.427bn in the first half of the previous year.

The group will pay a partially-franked interim dividend of 3.5c of which 2.63c will be franked.

The interim dividend will be paid on July 1 to shareholders on the register at May 22.

Chief executive James Fazzino said the company was working to drive returns from its existing operations while also growing the business.

"I'm a firm believer that execution on strategy is key and that a compelling source of shareholder value lies in improving the businesses you already own. We are focused on optimising the performance of IPL's existing manufacturing assets, lifting productivity and concentrating on costs," he said.