1H25 Results: Transformation on track with Fertilisers sales agreed
May 12, 2025
1H25 performance
· Zero Harm: Total Recordable Injury Frequency Rate (TRIFR) for the rolling twelve-month period ended 31 March 2025 was 1.03, down from 1.10[1] at 31 March 2024
· Statutory Net Profit After Tax and IMIs[2]: $7m (1H24: $148m loss)
· NPAT ex IMIs: $88m (1H24: $164m)
· EBIT ex IMIs : $174m (1H24: $249m) / EBITDA ex IMIs: $323m (1H24: $425m)
· Earnings Per Share ex IMIs: 4.7 cents per share (1H24: 8.4 cps)
· Return on Invested Capital including goodwill (ROIC): 6.1% (1H24: 5.5%)
· Interim dividend of 2.4 cents per share (unfranked) representing a 51% payout ratio
· Capital management: $900m on-market share buyback program expected to resume on Tuesday 13 May 2025, with $237m completed to date[3]
· Decarbonisation: Installation of LOMO tertiary nitrous oxide abatement completed and is expected to reduce the Group’s global operational GHG emissions by 19%[4]
1H25 highlights
Dyno Nobel (ASX:DNL) has successfully delivered on key milestones in its separation strategy announced in September 2024, with entering into agreements for the sale of the Fertilisers Distribution business, and a conditional contract of sale for the Gibson Island land[5].
Dyno Nobel has delivered strong underlying earnings growth[6] across its explosives businesses with net transformation benefits of $25m in 1H25. This reflects the continued delivery of the transformation program, largely driven by strong re-contracting outcomes, new customer wins and a range of procurement, supply chain and manufacturing initiatives delivered across the business to reduce costs and improve efficiencies.
Statutory Net Profit After Tax including individually material items (IMIs) is $7m (1H24: $148m loss). IMIs totalling $80m (after tax) primarily relate to costs associated with the announced closure of the Geelong manufacturing plant and a non-cash impairment of the Fertilisers manufacturing facility at St Helens. The principal driver of the reduced comparative earnings was the sale of the Waggaman, Louisiana facility in 1H24 and plant turnarounds completed at Moranbah, Queensland and Louisiana, Missouri (LOMO) in 1H25.
Dyno Nobel Asia Pacific: EBIT of $81m (1H24: $98m) with transformation program benefits of $19m offset by the $31m earnings impact from the scheduled eight-week major turnaround at the Moranbah plant.
Dyno Nobel Americas: EBIT of $84m (1H24: $148m) included transformation benefits of $8m, with the reduction in earnings largely due to sales of the Waggaman facility and land at Cheyenne, Wyoming in 1H24, and the impact of the LOMO turnaround completed during 1H25. The St Helens Fertilisers manufacturing facility is expected to close in 1H CY26.
Dyno Nobel EMEA & LATAM: EBIT of $11m (1H24: $14m) with higher earnings from the Titanobel business offset by costs incurred to establish the new business unit. DNEL has established key capabilities in Africa and is participating in trials and tenders across targeted accounts in LATAM.
Fertilisers: EBIT of $18m (1H24: $10m) with improved earnings driven by a higher DAP price and favourable FX movements, lower depreciation expense and improved manufacturing reliability, offset in part by weather impacts to sales timing and elevated gas costs at Phosphate Hill.
Fertilisers separation
Significant progress has been made in 1H25 on the separation of the Fertilisers business from the core explosives business, as follows:
· Distribution: Executed agreement to sell the Distribution business to Ridley Corporation for gross proceeds of $375m plus an additional $121m of working capital release.
· Perdaman Offtake Agreement: Executed agreement to sell the Company’s offtake agreement with Perdaman Chemicals and Fertilisers to Macquarie Group’s Commodities and Global Markets business for gross proceeds of up to $145m.
· Gibson Island: Entry into a conditional contract of sale for the Gibson Island land to a subsidiary of an ASX-listed property developer for gross proceeds of $194m.
These transactions are expected to deliver gross proceeds of up to $835m[7] and accelerate Dyno Nobel’s transformation into a focused global explosives business. Completion for the Distribution and Perdaman Offtake Agreement transactions is expected in Q3 CY25, with the Gibson Island land sale completion expected before the end of September 2025[8]. A separation process designed to minimise cost and disruption to normal operations has commenced.
Significant work continues to be undertaken as part of the Phosphate Hill strategic review and Dyno Nobel remains committed to a decision by no later than September 2025.
Capital management initiatives
During the half-year, the Group bought back shares valued at $88m as part of the planned $900m on-market share buyback program. The Group has now bought back a total of $237m worth of shares since the program commenced in July 2024.
In January 2025, the buyback was suspended following progress made on the Fertilisers separation. The Group remains committed to executing the remainder of the program with the buyback expected to recommence on 13 May 2025.
Commentary from Dyno Nobel’s CEO & Managing Director
CEO & Managing Director, Mauro Neves, said:
“In September last year we outlined our strategy to separate the Fertilisers business and become the leading global explosives business. I’m very pleased to announce that we are delivering on this ambition, with sale agreements for Distribution and the Perdaman Offtake Agreement, and a conditional contract of sale for the Gibson Island land.
“Ridley is a major agribusiness in Australia with an extensive and complementary footprint. This is the start of an exciting new chapter for Incitec Pivot Fertilisers and its valued customers and employees.
“In terms of our operational performance during the half, underlying earnings growth in our explosives business continues to be strong and we have seen reductions in our TRIFR, injury severity and lost work days.
“Our transformation program remains on track to achieve the 40-50% EBIT exit run rate expected for FY25, in line with our ambition to double earnings and deliver ROIC above WACC[9]. Despite weather related challenges experienced during the half, the net transformation earnings benefit of $25m builds on the strong FY24 result delivered by the program, and we continue to expect further upside as we move through FY25.
“During the half we also announced changes to our segment reporting with the introduction of the Dyno Nobel EMEA & LATAM growth business unit. This reflects our strategy to expand in Latin America, Europe and Africa through a capital-light approach, leveraging Dyno Nobel’s globally recognised brand, unique technology and strong customer relationships.
“Despite weather challenges presenting themselves across our businesses during the half, our underlying results have been robust, and we expect a stronger second half with the majority of turnaround impacts behind us. The impact from tariffs is expected to be minor with mitigation[10] and we will continue to monitor global developments.
“I continue to be impressed by the dedication and focus shown by our teams across our global operations and look forward to providing further updates as we transition to a focused global explosives business.”
Investor briefing
DNL will hold an investor webcast at 10.00am today, Monday 12 May 2025 AEST.
The link to register for the webcast is: https://webcast.openbriefing.com/dnl-hyr-2025/
For more information:
Investors
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This document has been authorised for release by Richa Puri, Company Secretary
This announcement contains certain forward-looking statements, including statements in relation to expectations, intentions, estimates, targets, and indications of, and guidance on, future outcomes, earnings, future financial position and performance and the implementation of DNL’s Fertilisers separation. The words “expect”, “would”, “could”, “potential”, “may”, “intend”, “will”, “believe”, “estimate”, “aim”, “target” and “forecast” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, the impact of Dyno Nobel’s separation strategy and associated agreements, and guidance on FY25 performance are also forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of DNL, its officers and employees. There can be no assurance that actual outcomes will not differ materially from these statements. There can be differences between forecast and actual results because events and actual circumstances frequently do not occur as forecast and their differences may be material. Undue reliance should not be placed on forward-looking statements. DNL, nor any other person, does not give any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statement will occur. DNL disclaims any responsibility to update or revise any forward-looking statement to reflect any change in DNL’s financial condition, status or affairs or any change in the events, conditions or circumstances on which a statement is based, except to the extent required by law. Additionally, to the maximum extent permitted by law, DNL and its affiliates, directors, officers, partners, employees, agents and advisers disclaim any responsibility for the accuracy or completeness of any forward-looking statements whether as a result of new information, future events or results or otherwise.
[1] 1H24 TRIFR has been restated due to the reclassification of 3 injuries.
[2] Statutory Net Profit After Tax attributable to members of DNL includes IMIs of $80m (loss) after tax (1H24: $312m loss).
[3] DNL’s current intention is to recommence buyback activity on 13 May 2025. Refer to Incitec Pivot’s FY24 results release dated 11 November 2024 and 2024 Notice of AGM dated 18 November 2024 for details of the on-market buyback program. Although it is DNL’s current intention to complete the buybacks, any purchases under the program remain at the discretion of the Company.
[4] Reduction percentage of the Group’s global operational greenhouse gas (GHG) emissions against the 2020 baselines. 2020 baselines have been adjusted for the sale of the Waggaman, Louisiana ammonia plant.
[5] See the 2025 Half Year Financial Results presentation for further details.
[6] Underlying earnings growth excludes the impact of the prior year earnings from the Waggaman facility (sold in 1H24), plant turnarounds, Cheyenne land sale (sold in 1H24), commodity prices and foreign exchange rates.
[7] See the 2025 Half Year Results Presentation for further details regarding value components of the transactions and expected net cash proceeds.
[8] Completion is subject to a number of conditions precedent. For further details of terms and conditions, see the 2025 Half Year Financial Results presentation.
[9] Ambition to double Dyno Nobel EBIT compared to actual FY23 Dyno Nobel EBIT of ~A$300m (excluding WALA and AG&IC) over 3 to 4 years. Subject to market and operating conditions including changes to exchange rates.
[10] Based on the current US tariff environment (10% global and 145% with China). As the DNA business purchases raw materials from Europe, Asia and Africa, this impact is subject to change if there are further changes to US tariff policies.