Dyno Nobel Limited reported a $25 million EBIT uplift in its 2025 half-year results, driven by its ongoing transformation program and strategic moves to separate its Fertilisers business. Despite weather-related challenges, the company is progressing key asset sales and preparing for a share buyback resumption.
- 1H25 net profit after tax (ex IMIs) of $88 million, down from $164 million in 1H24
- Transformation program delivers $25 million EBIT benefit, on track for 40%-50% exit run rate in FY25
- Fertilisers separation progressing with $835 million gross proceeds expected from asset sales
- Major turnarounds at Moranbah and LOMO completed safely, supporting operational reliability
- Share buyback program set to resume on 13 May 2025 following Fertilisers separation
Half-Year Financial Performance
Dyno Nobel Limited, formerly known as Incitec Pivot Limited until March 2025, released its half-year financial results for 2025, revealing a net profit after tax excluding individually material items (IMIs) of $88 million. This represents a decline from $164 million in the same period last year, reflecting the impact of scheduled plant turnarounds and adverse weather conditions across Australia. EBITDA and EBIT also fell to $323 million and $174 million respectively, down from $425 million and $249 million in 1H24.
Despite these headwinds, the company’s transformation program delivered a $25 million EBIT benefit in the first half, maintaining momentum towards its goal of a 40%-50% exit run rate benefit by the end of FY25. This program encompasses operational improvements, procurement efficiencies, and customer recontracting initiatives that are reshaping Dyno Nobel’s explosives business.
Strategic Fertilisers Separation Progress
Dyno Nobel is actively advancing the separation of its Fertilisers business to focus on becoming a pure-play explosives company. The company has signed sale agreements for its Distribution business with Ridley Corporation and for the Perdaman Offtake Agreement with Macquarie Commodities and Global Markets, collectively expected to generate gross proceeds of up to $641 million. Additionally, the conditional sale of the Gibson Island land is projected to bring in approximately $194 million gross proceeds.
After accounting for remediation, transaction costs, and working capital adjustments, net proceeds from these transactions are anticipated to reach up to $606 million. Completion of these sales is targeted for the third quarter of calendar year 2025, with the strategic review of the Phosphate Hill manufacturing facility expected to conclude by September 2025. Closure plans for the Geelong manufacturing plant are progressing, with cessation scheduled for the first half of calendar 2026.
Operational Highlights and Technology Innovation
Operationally, Dyno Nobel completed major turnarounds at Moranbah and LOMO safely, on time, and within budget, which contributed to a combined earnings impact of $42 million. The company also established a new business unit focused on growth through a capital-light approach, particularly targeting expansion in EMEA and LATAM markets.
Technology remains a cornerstone of Dyno Nobel’s strategy, with innovations such as the CyberDet I Wireless Initiation system deployed across multiple mine sites, and the launch of the DYNOBULK® Electric Mobile Processing Unit with Fortescue, advancing sustainable blasting solutions. The company is also leveraging artificial intelligence to enhance its Nobel Fire blasting models, improving efficiency and safety in operations.
Financial Position and Shareholder Returns
Dyno Nobel’s net debt to EBITDA ratio increased to 1.6x from 0.5x in 1H24, reflecting portfolio restructuring and capital return activities. The company’s capital return program has returned approximately $737 million to shareholders, with $663 million remaining. Importantly, the on-market share buyback program is set to recommence on 13 May 2025, signaling confidence in the company’s outlook and capital management discipline.
Looking ahead, Dyno Nobel anticipates a stronger second half of FY25, supported by continued transformation benefits, recovery of deferred fertiliser sales volumes, and manageable turnaround impacts. The company remains focused on delivering superior shareholder returns while advancing its ambition to double earnings and increase return on invested capital above its weighted average cost of capital.
Bottom Line?
Dyno Nobel’s transformation and strategic divestments set the stage for renewed growth, but execution risks and market conditions will be critical to watch.
Questions in the middle?
- How will Dyno Nobel manage gas supply cost volatility impacting Fertilisers manufacturing?
- What are the potential impacts of the Fertilisers separation on Dyno Nobel’s long-term earnings stability?
- Can the transformation program sustain momentum to achieve the targeted doubling of EBIT within 3-4 years?