Sydney, Feb 25, 2008 (ABN Newswire) - Shares in Dyno Nobel (DXL) rose by as much as 5.48% in morning trade after the company announced a 20.4% rise in full-year profit, helped by acquisitions and new business in Asia.
The world's number two explosives maker also said it expected to see continued underlying earnings growth in 2008, despite economic challenges.
Profit after tax and before significant items for the year ending December 31 was US$101.9 million.
"The strength of Dyno Nobel's business model and strong growth in the Asia Pacific region and U.S. fertiliser market will help to offset exposure to U.S. housing demand and potential slowdown in economic growth," said Chief Executive Peter Richards.
The company said it had completed nine acquisitions and joint ventures in 2007, including expansions in China.
Dyno's annual net profit after tax for 2007 was $46.27 million, down 48.6% on the prior year's result.
This figure included a writedown of $56.78 million after tax in relation to the group's ammonium nitrate project in Moranbah, Queensland.
In December, Dyno halted a highly publicised Australian ammonium nitrate project at Moranbah after a cost blow-out, raising worries about future earnings growth and its exposure to shifting prices.
"There is no doubt 2008 will be another challenging but exciting year for Dyno Nobel," said Mr Richards.
"However, the strength of Dyno Nobel's business model and strong growth in the Asia-Pacific region and US fertiliser market will help to offset exposure to US housing demand and potential slowdown in economic growth."
Dyno Nobel said it continued to evaluate the future of Moranbah, but said in the event that the project was not restarted it was confident of meeting its customer obligations at an acceptable cost.
A sharp fall in Dyno's share price following December's announcement on Moranbah sparked fresh market speculation that its major shareholder, fertiliser company Incitec Pivot was poised to launch a bid.
Incitec Pivot bought a 13% stake in Dyno Nobel in August, prompting Dyno to appoint Credit Suisse and Macquarie Bank as defence advisers.
The company, which has 36 manufacturing facilities in Australia, Canada, the United States, Mexico, Papua New Guinea and Indonesia, said a cost savings programme was ahead of schedule and it was confident of delivering the budgeted $20 million in earnings improvements in 2008.
Nevertheless, the market was impressed with the full-year profit, with shares in Dyno rising by 3.65% today to close up at $2.27.
AIR publishes a weekly magazine. Subscriptions are free at http://www.aireview.com.au
The world's number two explosives maker also said it expected to see continued underlying earnings growth in 2008, despite economic challenges.
Profit after tax and before significant items for the year ending December 31 was US$101.9 million.
"The strength of Dyno Nobel's business model and strong growth in the Asia Pacific region and U.S. fertiliser market will help to offset exposure to U.S. housing demand and potential slowdown in economic growth," said Chief Executive Peter Richards.
The company said it had completed nine acquisitions and joint ventures in 2007, including expansions in China.
Dyno's annual net profit after tax for 2007 was $46.27 million, down 48.6% on the prior year's result.
This figure included a writedown of $56.78 million after tax in relation to the group's ammonium nitrate project in Moranbah, Queensland.
In December, Dyno halted a highly publicised Australian ammonium nitrate project at Moranbah after a cost blow-out, raising worries about future earnings growth and its exposure to shifting prices.
"There is no doubt 2008 will be another challenging but exciting year for Dyno Nobel," said Mr Richards.
"However, the strength of Dyno Nobel's business model and strong growth in the Asia-Pacific region and US fertiliser market will help to offset exposure to US housing demand and potential slowdown in economic growth."
Dyno Nobel said it continued to evaluate the future of Moranbah, but said in the event that the project was not restarted it was confident of meeting its customer obligations at an acceptable cost.
A sharp fall in Dyno's share price following December's announcement on Moranbah sparked fresh market speculation that its major shareholder, fertiliser company Incitec Pivot was poised to launch a bid.
Incitec Pivot bought a 13% stake in Dyno Nobel in August, prompting Dyno to appoint Credit Suisse and Macquarie Bank as defence advisers.
The company, which has 36 manufacturing facilities in Australia, Canada, the United States, Mexico, Papua New Guinea and Indonesia, said a cost savings programme was ahead of schedule and it was confident of delivering the budgeted $20 million in earnings improvements in 2008.
Nevertheless, the market was impressed with the full-year profit, with shares in Dyno rising by 3.65% today to close up at $2.27.
AIR publishes a weekly magazine. Subscriptions are free at http://www.aireview.com.au
About Australasian Investment Review
Australasian Investment Review (AIR) is a free daily news service with a weekly online magazine covering global financial markets with a focus on Australia, New Zealand and Asia.
Each morning (Sydney time) AIR's team of experienced journalists present you with a concise digest of expert opinions and analysis on trends and backgrounds that matter in these markets. AIR is available free of charge.
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