IPL gas issues

About the author:

Author name:

By Belinda Moore

Job title:

Senior Analyst

Date posted:

08 July 2015, 9:52 AM

Sectors Covered:

Agriculture, Food & Beverage, Travel and Chemicals

Just when Incitec Pivot (IPL) was overcoming all its manufacturing issues, this morning it has announced a gas supply issue to the Moranbah plant will reduce its production.

Arrow has said that the supply reduction will extend into 2016 and be in the order of 10-20%.

IPL said that if there were to be a sustained and consistent 20% reduction in gas supply over a 12 month period, it estimates that the impact on NPAT would be in the order of A$22m.

The impact on IPL's FY15 NPAT is up to A$6m.

Downgrade

We will need to downgrade our forecasts accordingly. While this is Arrow's fault, it is likely to cause weakness in IPL's share price today. FY15 was the year that Moranbah was suppose to hit its capacity targets.

More information

Clients can view more detailed analysis on the Incitec Pivot by logging in. Alternatively, please contact your nearest Morgans office for more information. 

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents ("Morgans") do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.