Fertiliser and chemical companies report record earnings

High prices and strong demand have led to record earnings for listed fertiliser and chemical companies despite ‘disrupted markets’.

High prices and strong demand have led to record earnings for listed fertiliser and chemical companies Incitec Pivot and Nufarm.

Incitec Pivot’s fertiliser business, Fertilisers Asia Pacific, last week reported net profit after tax of $1.09 billion on revenue of $2.6 billion, up from net profit of $650 million in the 2021 financial year.

The record income was influenced by a higher realised urea price of $710 a tonne, almost double the $373/tonne in FY21, despite a lower total volume sold — 336,000 tonnes, compared to 364,000 tonnes in FY21.

Ammonium phosphate sales were also down — 747,000 tonnes sold compared to 949,000 tonnes in FY21. The decrease in sales was offset by a higher realised price of $851 a tonne, compared to $524 a tonne in FY21.

Managing director and chief executive Jeanne Johns said in a statement the company’s fertiliser and explosives businesses both “performed well in high demand but disrupted markets”.

Incitec Pivot Fertilisers has reported report profits of more than $1 billion in FY22. Picture: Liam Kidston

“Our Incitec Pivot Fertilisers business has an unrivalled distribution platform and manufacturing footprint providing customers security of supply,” she said.

The company had expanded its bio-fertiliser and liquid fertiliser offerings this year, which had set the business up well for distribution earnings growth, she said.

Incitec announced a total f $524 million of fully franked dividends and an on-market share buyback of up to $400m.

Chemical company Nufarm Ltd last week also announced a big increase in full-year earnings to September 30.

The company reported underlying earnings before interest, tax, depreciation, amortisation and material items of $447 million, an increase of 24 per cent on FY21. Net profit after tax was $107.4 million, up 65 per cent, and underlying net profit after tax was $133 million, more than double the FY21 result.

Nufarm managing director and chief executive Greg Hunt said the result came off the back of “favourable seasonal conditions and attractive soft commodity prices”.

Increased sale prices and strong demand for crop protection products drove earnings growth.

Nufarm declared an unfranked final dividend of six cents per share, taking the total for the year to 10 cents per share.

The company this year signed a 10-year offtake agreement with BP to sell Nuseed Carinata oil, a feedstock for sustainable aviation fuel.

Nufarm has forecast continued earnings growth in FY23.