Dyno Nobel has reported a sharp fall in underlying annual profit after selling its final fertiliser business, while maintaining that demand from mining, energy transition, artificial intelligence infrastructure and defence will support future growth.
The Australian commercial explosives maker recorded net profit excluding material items of $331 million for the year to September 30, down almost 22 per cent on the previous year.
After remediation costs linked to the $1 sale of Phosphate Hill in north-west Queensland, statutory profit was $66 million, compared with a loss of $53 million a year earlier.
Total earnings before interest and tax reached $485 million. Dyno Nobel is targeting earnings of $600 million by the 2028 financial year as it seeks to benefit from stronger demand across its markets.
Chief financial officer Nitesh Naidoo said the energy transition was increasing demand for critical minerals, with the amount of copper moved expected to rise by about 50 per cent between 2021 and 2031.
He also pointed to projected investment of more than $1 trillion in artificial intelligence-related infrastructure over the next three to five years, saying it would support demand for commodities, materials and energy.
However, Dyno Nobel shares fell 8.1 per cent to $3.51 in morning trading as investors reacted to a sell-off in technology stocks, concerns over rising debt among technology companies and uncertainty following the US midterm elections.
Mr Naidoo said it was too early to assess whether a new US Congress would alter the company’s longer-term market outlook.
“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.
He added that indications before the elections suggested defence energetics and artificial intelligence investment were bipartisan areas of support.
Dyno Nobel targets stronger earnings
Chief executive Mauro Neves de Moraes said the company was now positioned as a focused explosives business after years of asset write-downs and an ongoing transformation programme.
“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 in the Asia-Pacific division rose 10 per cent to $281 million despite the impact of wet weather. Earnings from the United States increased almost 19 per cent to $224 million, helped by transformation initiatives and favourable conditions in copper, gold and iron ore.
Dyno Nobel is the sole dynamite manufacturer in the US, producing the product at its facility in Carthage, Missouri, and supplying it alongside other explosives companies.
The company continues to make nitroglycerine-based dynamite for extreme conditions and specialised blasting, although modern mining largely uses alternatives such as ammonium nitrate and emulsion explosives.
Earnings from Dyno Nobel’s Europe, Africa and Latin America division dropped 40 per cent to $18 million, with shipping routes affected by conflict in the Middle East and wider economic pressures weighing on Europe.
