Incitec Pivot Share Price Plummets 6.67%

Incitec Pivot Limited [ASX:IPL] dropped 6.67% when the ASX opened this morning. It has recovered slightly, and is down 6.27% for the day, at time of writing.

Incitec Pivot Limited (IPL) manufactures and distributes industrial explosives, chemicals and fertilisers. Owning and operating facilities in Australia, the US, Canada, Turkey, Mexico, Chile and Indonesia. With joint ventures in South Africa, Malaysia and China.

Why did Incitec Pivot shares fall today?

According to IPL’s managing director and CEO, Jeanne Johns, there’s been ‘excellent manufacturing performance’ from the Waggaman and Moranbah regions.

However, half year results have been ‘impacted by turnarounds and unplanned outages at Cheyenne, St Helens and Gibson Island.’ A $3 million net impact in the Asia Pacific, to be precise.

However, the drop could’ve also been because of IPL’s fertiliser earnings taking a hit. Probably due to current dry weather conditions in eastern Australia.

This, according to IPL’s CFO Frank Micallef, could also be behind the $25.5 million and $3.1 million fertiliser impact costs in the Australian fertilisers business and the Americas agricultural and industrial chemicals business, respectively. 

What’s next then?

The challenge for Incitec Pivot from here will be to overcome the issues that caused this unexpected poor half-year performance. That will determine if today’s falls represent a buying opportunity, or the starting of a sustained downtrend for the stock.

Regards,

Harje Ronngard,
Editor, Money Morning

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