Problems hit Incitec
Production of ammonium phosphates at the plant is expected to fall to 400,000 tonnes in the second half, restricting year-to-September output to 763,000 tonnes, well short of the expected output of about 950,000 tonnes.
It follows problems at the group's Mount Isa plant that resulted in four weeks of lost production and cost about $25 million to rectify.
"Following the unplanned outage at Mount Isa earlier in this financial year ... the root cause was found to lie in the 2010 turnaround for Phosphate Hill and Mount Isa operations," Incitec chief executive James Fazzino said. A review of the group's manufacturing was being finalised with a specific focus on its maintenance programs, he said.
In the year to September 2012, Incitec Pivot earned a net profit of $405 million, with analysts forecasting a net profit of about $320 million this financial year because of the downturn in fertiliser prices, along with lower resources sector demand, before the earnings hit disclosed on Tuesday.
Frequently Asked Questions about this Article…
Incitec Pivot reported production problems at its Phosphate Hill fertiliser plant that resulted in lost output of about 180,000 tonnes of ammonium phosphates, forcing an unexpected reduction in second‑half production.
The company warned of a $23.5 million hit to its second‑half profit due to the production issues at Phosphate Hill.
Incitec Pivot expects ammonium phosphate production to fall to about 400,000 tonnes in the second half, restricting year‑to‑September output to around 763,000 tonnes versus the previously expected roughly 950,000 tonnes.
Yes. Earlier in the year the group experienced problems at its Mount Isa plant that caused four weeks of lost production and cost about $25 million to rectify.
Incitec Pivot's chief executive James Fazzino said the root cause was traced to issues stemming from the 2010 turnaround for Phosphate Hill and Mount Isa operations; the company is finalising a manufacturing review with a specific focus on maintenance programs.
In the year to September 2012 Incitec Pivot earned a net profit of $405 million. Analysts were forecasting about a $320 million net profit for the current financial year because of weaker fertiliser prices and lower resources demand — forecasts that were published before the additional earnings hit disclosed on Tuesday.
Management is finalising a review of the group's manufacturing operations with a particular focus on maintenance programs, according to CEO James Fazzino, to help prevent further unplanned outages.
Investors should watch company updates on production volumes and guidance, results of the manufacturing and maintenance review, and any further announcements on costs or earnings impacts — as well as broader factors noted in the article like fertiliser price trends and resources sector demand.
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