IPL, INCITEC PIVOT LIMITED

[early birds]

The pandemic has severely hit Dyno Nobel Americas’ ammonium nitrate volumes with the impact most pronounced in coal/metals markets.

Base and precious metals volumes were impacted by mine closures in Canada while iron ore production was cut due to reduced US steel demand. US coal markets were impacted by the significant drop in gas prices.

Incitec Pivot highlights base and precious metals volumes are recovering along with the recent increase in the US gas price hinting a recovery in coal volumes.

The broker notes Incitec’s earnings are sensitive to changes in the global fertiliser prices. These prices have increased by circa 20% and 15% and the company has a positive outlook underpinned by better global agricultural conditions and trade flow redirection.

UBS retains its Buy rating with a target price of $2.40.

Sector: Materials.

Target price is $2.40.Current Price is $2.25. Difference: $0.15 – (brackets indicate current price is over target). If IPL meets the UBS target it will return approximately 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).
=======

from our own sharecafe----- good defensive stock i reckon.

[mullokintyre]

IPL still going up, now near the post covid highs.
Still a long way to go to pre covid 52 week high, which is a little surprising since the big increases in mining activity should keep the explosives side going going, and the really good Autumn and spring breaks should boost the fertiliser side of things.
Mick

[mullokintyre]

In Reply To: mullokintyre's post @ Sep 21 2020, 11:52 AM

Kinda surprised that the results for IPL were not received more favourably.
EBIT up 23% YOY.
Operating cash flows up 31% YOY.
NPAT up 19%.
On a day when banks , Telstra and Invocare are all up it went down.
One can only assume that the market expected a greater increase.
Sometimes the market is just hard to please.

Mick

[mullokintyre]

Added some more IPL today.
The fertiliser side of the business should do pretty well this year, and the explosives side seems to be quietly ticking long.
The only worry is that the recent interest in Ammonia as a feedstock for Hydrogen production might have an impact on prices, although according to ICIS, Ammonia went into oversupply during the last quarter of 2019. The recent slowdown in world trade has also dampened demand for Ammonia.
If the feedstock prices do increase, I at least have shares in WES which owns one of only two plants that produces Ammonia in WA.
Mick

[mullokintyre]

Ya gotta love those experts. Pick almost any stock and you can find people at either end of the spectrum.
CITI released a statement that cut the forecast price for IPL from2.43 to 2.40. Big deal, it changes more than that intraday.
Within a couple of days, Morgan Stanley released its statement where it upgraded the price of IPL from 2.00 to 2.25.
They must take it inturns to load up on a stock then spruik the price to fleece the sheep.
Mick

[early birds]

https://www.sharecafe.com.au/2020/08/05/inc...the-challenges/

The company did not provide formal guidance but has outlined a new cost reduction plan in response to the pandemic, with savings of -$60m to be delivered incrementally over FY20-22. Yet details are limited on specific sources of benefit and, as end markets remain difficult, Morgan Stanley is one broker that remains to be convinced whether this will impact the bottom line.

=============

cost saving of 60mil ---it is good for biz but what about safety??

[nipper]

In Reply To: early birds's post @ Aug 5 2020, 10:42 AM

Some overview on IPL here:

https://www.sharecafe.com.au/2020/08/05/inc...the-challenges/

[early birds]

In Reply To: mullokintyre's post @ Aug 5 2020, 10:34 AM

been watch this stock from time to time, think it has some kinda "defensive" nature.

haven't torch it yet, as my hands are tight atm.

hope you can dig it out more thing to feed us!! thanks!

[mullokintyre]

expecting a good result from IPL.
Been some keen buying last week or so, so somebody must be in the know.
Mick

[blacksheep]

Revised Guidance and Strategic Review announced today - SP down 1.4% @ $2.78/share

Revised FY19 Earnings Guidance
2 September 2019
This release provides an update on Incitec Pivot Limited’s (ASX:IPL) FY19 earnings
guidance.

IPL’s FY19 guidance, as issued in May 2019, was $370 million to $415 million Earnings
Before Interest and Tax (EBIT), based on disclosed forward commodity price and foreign
exchange assumptions at that time. EBIT sensitivities to those factors were also provided.
Applying the publicly available actual pricing and foreign exchange rates lowers the FY19
EBIT range to between $321 million and $366 million.1

Following a reassessment of earnings estimates at the end of August, it is currently
estimated that the actual FY19 EBIT will be below this range, mainly due to lower than
forecast ammonia production at Waggaman and lower Fertilisers earnings mainly as a result
of continued drought impacts in New South Wales and Queensland and increased gas costs
at Gibson Island.

As a result of the foregoing, the revised EBIT range for FY19 is estimated to be
approximately $285 million to $295 million.2

This range excludes approximately $20 million

of one-off items (potential insurance proceeds in respect of the rail outage at Phosphate Hill
and a sale of surplus land in the U.S.), which, if they materialise, could fall into either the
FY19 or FY20 year.

Previous interest expense guidance of $145 million remains unchanged, while the effective
tax rate is likely to be lower at approximately 5%, as a result of the financial impact of the
adverse events during the year.

Further details will be provided in IPL’s FY19 Full Year Results in November 2019.

Total short positions as at 26th August, 2019 = 0.59%
https://www.shortman.com.au/stock?q=ipl

Attached thumbnail(s)