Incitec pivots on its guidance
Stock
Incitec Pivot (IPL) $3.11 as at 02/09/2019
Event
Explosives, fertilizers and chemicals distributor Incitec Pivot saw its shares whacked early in the session on a downgrade with shares trading as low as $2.74, 14.6% below Friday’s close. As the session has rolled on, IPL has recovered much of the fall to trade at $3.11
The company downgraded its EBIT guidance for FY19 by around 26% to the midpoint of the $285m to $295m range for the September year end. About a third of the downgrade stemmed from commodity pricing and exchange rate impacts, while the remainder was focused to the fertilizer business which the company is now reviewing.
The US ammonia plan at Waggamana has been under performing in the second half of the year while fertilizer revenue has been hit by drought and rising gas prices in the Queensland production facility. UBS has been called in to look at Incitec in an effort to assess how best to extract value from the three components of the company.
Incitec Pivot (IPL) Chart
Market Matters Take/Outlook
