Shares in this explosives firm have hit a 12-month high after it reported solid underlying profits

A strong trading outlook has this explosives player's shares performing strongly.

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Key points
  • Dyno Nobel shares have hit a record high.
  • This followed the company reporting a slight increase in underlying earnings.
  • The company is forecasting more underlying earnings growth this year.

Shares in Dyno Nobel Ltd (ASX: DNL) hit a 12-month high on Monday after the company reported an increase in full-year underlying net profits and a boost in the final dividend payout.

The explosives company said on Monday that net profit excluding significant items came in at $423 million, up from $401 million the previous year.

The statutory result, including significant items, was a loss of $53 million, compared with a loss the previous year of $311 million.

This year's result included significant items worth $477 million after tax, "primarily relating to the sale of the fertilisers business and non-cash impairments", the company said.

Man with rocket wings which have flames coming out of them.

Image source: Getty Images

Strong operating result

The company said in its statement to the ASX on Monday that it continued to perform well while also making headway on cost reductions.

Strong underlying earnings growth was delivered across the explosives business, with EBIT up 16% to $434 million, driven by margin expansion and cost efficiencies, with $60 million of net transformation benefits achieved during the year. The transformation program has continued to deliver in line with expectations and remains on track, with $134 million in total net transformation benefits generated since FY24.

Managing director Mauro Neeves said FY25 had been a year of significant progress for the company.

As he said:

We are nearing completion of our separation activities, with defined milestones in place for Phosphate Hill, and we continue to prioritise the sale of the asset to a qualified buyer by March 2026. Looking forward, Dyno Nobel's strong partnerships, network of assets and infrastructure continues to be an important part of our growth strategy globally.

Mr Neeves said the company had struck a deal to build a TNT plant in Kentucky with the US government, which would fund the project and which would ensure continuity of supply for North American customers.

The company said its buyback was continuing, with $430 million of a possible $900 million of shares bought back to date, with the buyback to recommence from November 11 following a blackout period.

Earnings to grow

On the outlook for FY26, the company said it expected EBIT for the explosives business to be in the range of $460 million to $500 million.

Dyno Nobel shares hit a 12-month high of $3.43 in early trade on Monday before settling back to be 4% higher at $3.34.

The company was valued at $5.76 billion at the close of trade on Friday.

Dyno Nobel will pay an unfranked dividend of 9.5 cents per share, up from 6.3 cents for the same period last year.

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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