Southbank, Victoria-based Incitec Pivot Ltd. (IPL) on Feb. 15 confirmed that its overall group financial performance remains broadly in line with the FY2024 outlook that was previously provided at its 2023 AGM on Dec. 20, 2023.
The company said expectations have been supported by stronger DAP prices recently and solid performance from the global explosives business, but it flagged lower-than-guided production at Phosphate Hill in FY2024 due to the impact of Cyclone Kirrily and maintenance activities during the first fiscal half.
Following Cyclone Kirrily and associated flooding in parts of northwest Queensland, there have been interruptions to the rail transport service between Cloncurry and Julia Creek on the Mount Isa to Townsville rail line. IPL said no employees or contractors were injured and no damage was sustained to IPL’s assets, but the interruption to rail service has impacted the sulfuric acid supply chain, resulting in reduced production levels at the Phosphate Hill plant.
Phosphate Hill has been able to continue operating at reduced levels despite the rail disruption by utilizing temporary storage and road transport for finished fertilizer, IPL said. It expects normal rail service to resume late this month. As a result, IPL said it expects Phosphate Hill production levels to be lower in the first fiscal half, with full-year production levels in FY2024 now expected at 730,000-770,000 mt versus the previous guidance of 780,000-820,000 mt.
The company currently estimates that the financial impact of the lower production on earnings before interest and tax (EBIT) in FY2024 for the fertilizer business would be approximately A$8.5 million for every 10,000 mt of production lost, including associated costs incurred. IPL said it will provide a further update with its first-half FY2024 results announcement on May 16.