Incitec Pivot Ltd. (IPL), Southbank, Victoria, on April 19 said production at its 800,000 mt/y Waggaman, La., ammonia plant had successfully restarted following a rupture in a section of pipe announced on Feb. 18, and the facility is now operating at nameplate capacity.
The rupture resulted in a release of hydrogen, but following extensive investigations, the company said it found only minor damage to surrounding equipment (GM Feb. 18, p. 1).
IPL estimates the impact to earnings associated with the downtime at Waggaman to be approximately US$128 million (A$173 million) on an earnings before interest and tax (EBIT) basis and US$92 million (A$124 million) on a net profit after tax (NPAT) basis. Both of these latest estimates are higher than the initial estimates of US$95-$125 million (EBIT) and US$68-$90 million (NPAT) (GM Feb. 25, p. 35).
The company said approximately 75 percent of the impact on earnings will be in its first-half financial results.
IPL continues to work with its insurers to progress a claim under its comprehensive property insurance policy. But it said the first-half results will not include any adjustments for potential insurance recoveries.
The company experienced major problems at the relatively new Waggaman plant during its last fiscal year ended Sept. 30, 2021 (GM Nov. 19, 2021), including an extended turnaround and unplanned outages. The facility produced 437,200 mt of ammonia in FY2021, 40 percent less than FY2020’s 729,000 mt, while sales of ammonia from the plant were 23 percent lower year-over-year at 563,000 mt (FY2020: 730,000 mt).
IPL will release its first-half FY22 financial results on May 23.