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UPDATE 1-Incitec Pivot says 2020, 2021 profits to be hurt by loss of BHP contract
December 5, 2017 / 11:39 PM / 7 days ago

UPDATE 1-Incitec Pivot says 2020, 2021 profits to be hurt by loss of BHP contract

(Recasts, adds financial impact of cessation in 2020, 2021)

Dec 6 (Reuters) - Australian explosives maker Incitec Pivot Ltd said on Wednesday it has lost a major contract to supply miner BHP Billiton, denting its profits in fiscal 2020 and 2021.

The world’s second-largest maker of commercial explosives said it would cease to be BHP Iron Ore’s contracted supplier of ammonium nitrate prill, an explosives raw material, after the expiry of its current contract in November 2019.

The company forecast a one-off impact of about A$10 million ($7.6 million) on its fiscal 2020 profit and A$25 million the year after. Beyond that the impact would be minimal, it said.

Analysts had expected Incitec Pivot to post a net profit of A$443 million in fiscal 2020, according to Reuters Estimates.

Incitec Pivot shares were trading down 3.4 percent following the announcement, compared with a 0.3 percent drop in the Australian benchmark.

The company said the cessation of the contract would have no effect on its financial statements for fiscal 2018 and 2019. ($1 = 1.3146 Australian dollars) (Reporting by Ambar Warrick in Bengaluru; editing by Richard Pullin)

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