The Incitec Pivot Ltd (ASX: IPL) share price is taking a beating on Wednesday.
In morning trade, the ASX 200 chemicals company's shares crashed 10% to $2.88.
Why is this ASX 200 share crashing?
Investors have been selling down this ASX 200 share today after the release of a disappointing half-year update. The company reported:
- Statutory net profit after tax down 8% to $354 million
- Earnings per share down 6% to 18.6 cents
- Interim dividend flat at 10 cents per share (60% franked)
What happened during the half?
Incitec Pivot had a mixed half, with one side of the business performing positively and the other acting as a major drag on its profits.
The positive performer was its Dyno Nobel segment. In the Americas, its EBIT was up almost 43% to US$260 million thanks to improved operating performance at the Waggaman ammonia plant. In the Asia Pacific, its EBIT was flat after unusually wet weather and the Gibson Island closure offset growth in technology sales and an excellent performance from the international businesses.
The negative performer was the Fertiliser segment, which reported a 58% decline in EBIT to $108 million. This reflects lower commodity prices and the temporary increase in the cost of gas at Phosphate Hill.
How does this compare to expectations?
Analysts at Goldman Sachs were not impressed with how the company performed during the half. It commented:
1H23 Adj NPAT of A$353m was -8% lower yoy and -22% vs GSe and -23% vs Visible Alpha Consensus Data. Adj EBIT was A$552m -3% yoy, -17% vs GSe and -19% vs Visible Alpha consensus. The miss was broad based with all business segments lower vs GSe and consensus.
This goes some way to explaining why this ASX 200 share is being hammered during today's session.
