Incitec Pivot shares are on a tear

A tractor spreads fertiliser in New Zealand. Sandra Mu/Getty Images

Shares in Incitec Pivot jumped sharply higher after the explosives and fertiliser company posted a fall in half-year profits but maintained dividends.

A short time ago, the shares were up 9.7% to $3.14.

Profit was down 78.5% to $31.5 million after a $105.6 million non-cash impairment to the asset value of its Gibson Island fertiliser plant in Queensland.

Underlying profit, excluding the impairments, was $137.1 million, a fall of 6.4%.

A fully franked dividend of 4.1 cents a share, maintaining a payout ratio of 50% of profit before impairments, was declared.

The company says the decision to write down the asset value of Gibson Island reflects the challenge of high gas costs to energy-intensive manufacturing in Australia.

CEO James Fazzino says the results underscore the resilience of the business, given the resources sector downturn and a decline in global fertiliser prices.

“Our performance validates decisions taken over the past several years to position the company to respond to market conditions,” he says.

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