Source : Perth Now news
An Australian dynamite maker has taken a profit hit after selling its last fertiliser business, but says the outlook is strong despite jitters around the artificial intelligence infrastructure build-outs.
Dyno Nobel, which makes and sells commercial explosives for industries like mining, made a full-year net profit of $331 million, excluding material items, down almost 22 per cent from a year earlier.
After including remediation costs following the $1 sale of Phosphate Hill in northwest Queensland, the bottom-line profit for the 12 months to September 30 was $66 million, swinging from a $53 million loss.
Total earnings before interest and tax came to $485 million, which the company wants to grow to $600 million by fiscal 2028 as it builds on market tailwinds including the global energy transition, AI and defence spending.
“Electrification and the energy transition are driving critical minerals demand, with copper material moved expected to grow by around 50 per cent from 2021 to 2031,” chief financial officer Nitesh Naidoo told a results briefing on Monday.
“At the same time, more than $1 trillion of AI-related infrastructure investment is projected over the next three to five years, supporting demand for commodities, materials, and energy.”
However, after the US mid-terms and concerns about spiralling tech company debts sparked a sell-off in tech stocks last week, investors seemed less optimistic about Dyno Nobel’s outlook, with its shares tumbling 8.1 per cent to $3.51 in morning trade.
Mr Naidoo downplayed any major impact of a new-look US Congress on market tailwinds.
“It’s probably too recent to tell, but we haven’t seen any sign of change on the megatrends or any indication that the fundamentals that were driving them would change,” he said.
“Whether it’s in the defence energetics, AI investments, all indications – even pre-elections – suggested those things were, in a way, bipartisan.”
After years of costly asset write-downs and an ongoing transformation, Dyno Nobel is on track for better earnings and tighter margins, chief executive Mauro Neves de Moraes said.
“These results show why we have confidence in Dyno Nobel’s future – we are now a focused pure-play explosives business,” he said.
“We have resilient growth, strong contractual protections, and leading positions in attractive markets.”
Underlying earnings at its Asia Pacific business grew 10 per cent to $281 million despite wet weather impacts, while earnings from its US business grew almost 19 per cent to $224 million, driven by transformation initiatives and favourable market conditions for copper, gold and iron ore.
Dyno Nobel is currently the sole manufacturer of dynamite in the United States, which it produces at a facility in Carthage, Missouri, and supplies alongside other explosives companies.
While modern mining mostly relies on safer, bulk alternatives like ammonium nitrate and emulsion explosives, Dyno Nobel continues to produce nitroglycerine-based dynamite for extreme conditions and specialised blasting.
Earnings from its Europe, Africa and Latin America arm fell 40 per cent to $18 million as the Middle East conflict impacted shipping routes, and Europe faced other economic headwinds.
