Rising Debt and Fertilisers Exit Pose Challenges for Dyno Nobel’s Next Chapter

Financial Performance and Strategic Divestments

Dyno Nobel Limited closed the 2025 financial year with a revenue of A$5.345 billion, a slight decline of 0.4% compared to the previous year. Despite this, the company delivered a 5.6% increase in net profit after tax excluding individually material items (IMIs), reaching A$423.4 million. This reflects operational resilience amid ongoing portfolio reshaping and market headwinds.

Significant milestones included the completion of the sale of the Incitec Pivot Fertilisers (IPF) Distribution business to Ridley Corporation and the divestment of the Gibson Island land to Goodman Group. These moves mark important steps in Dyno Nobel’s strategic separation of its explosives and fertilisers businesses, positioning it as a focused global leader in industrial explosives.

Operational Highlights and Transformation Progress

The company’s earnings before interest and tax (EBIT) excluding IMIs rose 23.2% to A$714.1 million, bolstered by favourable commodity prices, foreign exchange tailwinds, and ongoing benefits from its transformation program. Dyno Nobel successfully completed major manufacturing turnarounds at Moranbah, Cheyenne, and LOMO, enhancing operational reliability and resilience.

Safety performance remained a priority, with a 19% improvement in the Total Recordable Injury Frequency Rate and no significant environmental incidents reported during the year. The company’s commitment to sustainability is reflected in its ambition to achieve net zero operational emissions by 2050, supported by ongoing investments in emissions abatement projects.

Balance Sheet and Capital Management

Dyno Nobel’s balance sheet showed an increase in net debt to A$1.18 billion, primarily due to scheduled tax payments related to the Waggaman sale and shareholder returns including dividends and share buybacks. The company remains within its target leverage ratio of 1.4 times net debt to EBITDA, supported by a strong liquidity position with A$800 million in undrawn committed facilities.

The on-market share buyback program is progressing well, with A$430.6 million of the planned A$900 million repurchased to date. The Board declared a final unfranked dividend of 9.5 cents per share, reflecting a payout ratio aligned with company policy and signaling confidence in future cash flows.

Outlook and Risks

Looking ahead, Dyno Nobel expects FY26 capital expenditure to range between A$280 million and A$330 million, reflecting ongoing investments in sustaining and growth initiatives. The company continues to focus on the sale or orderly closure of the Phosphate Hill fertilisers manufacturing facility, with a decision expected by March 2026.

Risks remain around environmental compliance, gas supply costs, and market conditions, particularly in fertilisers. However, Dyno Nobel’s investment-grade credit ratings and disciplined capital management provide a solid foundation to navigate these challenges while pursuing sustainable growth.

Executive Remuneration and Governance

Executive remuneration outcomes for FY25 reflected strong alignment with company performance and strategic progress. The CEO & Managing Director achieved 76.3% of maximum short-term incentive opportunity, with long-term incentive vesting at 47.7% for the 2021–24 plan. The Board has reintroduced Return on Invested Capital (ROIC) as a performance measure for FY26, emphasizing capital efficiency in the company’s focused explosives strategy.