Incitec Pivot hit by end of BHP contract

Incitec Pivot has warned that its 2020 and 2021 full-year profits will be hit by the end of a contract to supply ammonium nitrate prill to mining giant BHP.

Prashant Mehra

06 December 2017

SYDNEY - [AAP] Incitec Pivot (ASX: IPL) has warned that its 2020 and 2021 full-year profits will be hit by the end of a contract to supply ammonium nitrate prill to mining giant BHP Billiton (ASX: BHP).

Incitec shares dropped 3.3 per cent on the news, falling to $3.85 in the first 10 minutes of trade on Wednesday.

Incitec said there will be no financial impact in this financial year or the next, with the contract ending in November 2019.

However, the fertiliser and explosives maker will incur a hit of $10 million on its net profit in FY20 and $25 million in FY21 because of contractual commitments to a third-party supplier in WA.

Ammonium nitrate prill is used as a blasting agent in iron ore mining.

Incitec Pivot in November reported its full-year profit had more than doubled on the back of rising fertiliser prices and launched a $300 million share buyback.

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Prashant Mehra
is a freelance journalist.

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